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PropTech Trends and the Triple Ps: People, Planet and Prosperity

Scott Alan

Technology is everywhere and advancing at a blistering pace. For those who are not on the leading edge of the social adoption curve, it is hard to know when a new technology is worth the investment and effort.

This is true of both personal technology as well as business applications, perhaps nowhere more so than with real estate focused technology (now known as PropTech or Smart Building). Because buildings and their systems have long life cycles, it stands to reason that the technology we choose to interface with them isn’t just plug-and-play and can’t just change on a whim. While first-generation PropTech was limited in its applications and benefits, new developments in the nexus of the digital world and the built environment are quite promising, offering benefits to asset managers, building managers, tenants, occupants and the planet.

Early building technologies, like building automation systems and energy management systems, tended to operate behind the scenes solely in the domain of the building engineer or facilities manager, with a focus on HVAC control and energy savings. A lot of newer technologies, like Nest thermostats, still have singular purposes—to optimize energy use. While energy savings (and associated carbon emissions reduction) is critical in addressing global issues like climate change, it is not central to financial decision making in real estate for asset managers or tenants. As JLL illustrates with the 3-30-300 rule for total cost of occupancy, utility costs are roughly $3 per square foot per year, but rent costs can be 10 times that amount (around $30 per square foot), and payroll costs are 10 times again, averaging $300. A positive energy savings strategy that cuts usage by 30 percent translates to about $1 per square foot, however a more modest 10 percent optimization in lease space (or a tiny 1 percent increase in productivity) is equal to the entire utility budget.

The good news is that many advances in real estate technology are more comprehensive, and address these shorter term financial drivers and longer term sustainability goals. Improved reliability and compatibility and reduced cost of sensors and smart meters are making advanced systems viable for both new construction and retrofit applications. Some of the most interesting developments are in space utilization, tenant/occupant engagement, and predictive and dynamic controls.

According to CBRE, approximately 40 percent of offices are empty at any given time. At the same time, the demand for office amenities and a variety of work and collaboration spaces have increased. New, low-cost sensor technology can be deployed to collect real-time data on where people are spending their time, including heat maps of space use intensity, counts of how many people are in conference rooms at any given time, and how often individual desks are occupied. This data can inform planning to optimize space utilization and the design of individual and group work spaces to create more efficient and productive work environments.

For building owners looking to attract and retain tenants, and for companies competing for talent, occupant engagement is the name of the game and PropTech has a number of solutions to offer. A prime example is access control. With increased security concerns, access control has been a major concern, but early solutions created inconveniences for building occupants and unwelcoming experiences for visitors. Technology and the ubiquitous use of smartphones now offers opportunities for a seamless user experience for regular occupants, and the ability to preregister a guest (who might be your next major client or star employee) so they can enter a building and be guided to their destination without check-in bottlenecks at the security desk.

Central to meeting people/planet/prosperity solutions are applications that address the most common user experience issues in work environments, which are: hot and cold complaints and access to natural light. Recent studies have shown a strong correlation between thermal comfort and cognitive function, and others have identified daylight and views as the office perk most desired by employees. “Comfy” (recently acquired by Siemens) is one such technology that provides a simple user interface deployed as an app, inviting individuals to register their current comfort condition. Comfy interfaces with building automation and HVAC systems to give users an immediate, automated response, a temporary increase in warm or cold air in the zone where they are working. The system uses machine learning to record the preferences of occupants and the unique thermal needs in each zone, as well as trends in space usage, and it uses predictive controls to optimized patterns of variable thermal setpoints. This improves everyone’s comfort and at the same time reduces energy use, and more importantly, frees building engineers from addressing constant complaints.

Predictive and dynamic controls enabled by the Internet of Things (IoT) can provide benefits for building managers, significantly reducing unplanned outages and maintenance costs by prompting preventive rather than reactive maintenance. This has indirect benefits for occupant experience, avoiding the discomfort associated with equipment failure, but other IoT technologies also offer direct and positive occupant interface. Advanced glazing solutions like View Dynamic Glass allow both automated response to outdoor conditions and user controlled overrides (through a mobile app) to control daylight and glare, eliminating the battle of the blinds (the trade-off between controlling glare and maintaining view), thus increasing productivity and occupant satisfaction while saving energy and improving aesthetic appearance. Advances in this technology might also include integration with electric lighting and the incorporation of visual display capabilities.

The barriers to smart building technology, cost, reliability and compatibility, are coming down and creating new possibilities for efficiency, function and delight in the buildings where we spend so much of our time. The adoption of PropTech offers benefits to all stakeholders in commercial real estate, including employees and the planet. The new data now available from this technology also offers valuable feedback and learning for architects, designers and engineers, helping them create better user-friendly buildings.


Alan Scott, FAIA, LEED Fellow, LEED AP BD+C, O+M, WELL AP, CEM, is an architect with over 30 years of experience in sustainable building design. He is a senior associate with WSP in Portland, Ore. To learn more, visit http://www.wsp.com/en-US/services/built-ecology and follow him on Twitter @alanscott_faia.