Commercial real estate has long depended on incremental advances in interior and exterior design, construction methods and energy savings to keep pace with the evolving needs of owners and occupants. These improvements have accelerated over the past several years, with flexible workspace designs expanding employee collaboration, digital tools enhancing the construction process and energy intelligence bringing new visibility into building efficiency.
Yet not much has changed in the way individuals and infrastructure interact. Communication between buildings and their occupants seldom extends beyond the occasional press of a button to call an elevator or flip of a switch to illuminate a room. A step change is on the horizon, however, with a focus on user-centric features that evolve the ways in which occupants benefit from their surroundings. A set of buildings are starting to bring these benefits to light, serving as test cases for the future of infrastructure technology.
For example, one recently constructed building in Amsterdam looks like many modern offices at first glance. Open floor plans with adjustable desks, multipurpose common spaces and vibrant lounges surround a light-filled atrium and create a flexible and inviting workspace. But embedded within the facility is an array of intelligence to closely connect the infrastructure and occupants. Nearly 30,000 sensors cover the floor space, collecting granular, area-by-area data on occupancy, temperature, humidity, light levels and even coffee-machine and towel-dispenser use.
The data are aggregated in real time, with analytics parsing the information into actionable intelligence to improve the occupant experience. Office and conference-room temperature adjusts to match occupancy levels and user preferences, for instance and overhead lights brighten and dim according to the amount of sunlight present. Employees engage with this intelligent infrastructure through a smartphone interface, providing location awareness and wayfinding, real-time occupancy of meeting rooms and collaboration areas, workspace vacancies and assignments and dynamic control over lighting and environmental settings.
This building is not an isolated example; rather, it is one of many new structures that have come online over the past three years across major cities, including London, Madrid, New York, Toronto, and Zurich, with similar technology built in. These facilities are using data to provide tangible new benefits to occupants and operators and this connectivity-driven disruption is poised to unlock significant value for infrastructure suppliers across heating, ventilation and air conditioning (HVAC), lighting, IT, security and safety (Exhibit 1).
Can the industry translate these early proof points into greater momentum or will interest in these changes subside? We believe that there is enough value waiting to be unlocked for this trend to continue and in fact intensify over the next few years. Our research suggests that six tenets will ring true in this future landscape. First, the focus of building connectivity will migrate from energy savings to occupant experience, unlocking the next wave of value creation for building-infrastructure players. Security and privacy will present headwinds and companies must build confidence across owners, tenants and occupants to accelerate uptake. And adoption will hinge on an effective combination of use cases, rather than a single “killer app.”
Furthermore, this future state will require infrastructure players to depart from the status quo by transcending traditional approaches to market and reevaluating their technology, product offering, and partnerships to lay a foundation for long-term success. Winning players will pursue end-to-end solutions and stake a defensible, sustainable position amid a complex landscape of choices. And different business models will be needed to capture new value in software and digital services.
A step change in user experience will unlock the next wave of value creation
Building automation has been propelled by a necessity to reduce the cost of energy and operation over the past decade. Motion sensors were introduced to switch off lighting in unoccupied spaces. Window treatments were automated to lower the impact of direct sunlight on air-conditioning load. And intrusion detection expanded from passive alarms to corporate-wide access controls that minimized manual security work. In each case, cost reduction was the main driver, with a straightforward calculation for return on investment (RoI). Although room for further cost improvement remains, user experience is rapidly emerging as the next focus.
Looking forward, businesses are increasingly recognizing the link between the working environment and human capital and ascribing value to a positive employee experience. Talent recruitment, performance and retention are all affected by the building environment, which has the power to engender either positive or negative reactions. Although more difficult to quantify, the impact of employee surroundings on business performance is receiving increased attention. New use cases will leverage connectivity to improve the occupant experience, enabling the personalization of space, bio-adaptability of the environment and predictive awareness of individual needs.
Buildings that emphasize the user experience will provide occupants with greater personal control over their surroundings. Lighting systems will identify occupants and adjust the intensity and color temperature to suit individual preferences; they will also adjust to the time of day. Climate systems will respond to individuals as well, automatically adjusting the temperature in conference rooms to the ideal average between attendees.
Bio-adaptability will help to improve occupant productivity, creativity, and potentially even health. Lighting fixtures will adjust their color spectrum throughout the day to more closely mimic sunlight and support the circadian rhythm. And HVAC systems will monitor and adjust for ideal air quality, removing the “sleep-inducing” effects of a poor climate.
Predictive awareness will enable more effective and efficient mobility throughout a building, as well as use of space. Elevators will steer occupants according to the next meeting in their calendar, pre-positioning cars to minimize waiting. Conference-room availability will be tracked in real time, eliminating “phantom” bookings and making spaces available again if attendees do not show up. Flexible workspace assignments will take a range of variables into consideration when identifying an employee “home base” for the day, including personal location preferences, meeting locations and anticipated occupancy levels. And indoor positioning will enable employees to locate and rapidly route to shared spaces and assets.
Experience improvements will not be limited to occupants, however. Operators and facility managers will also benefit, with building infrastructure requiring less manual oversight. Climate control will predictively adapt to weather changes and occupancy levels. Lighting fixtures will brighten and darken alongside ambient sunlight, dynamically maximizing energy savings. And as buildings shift from energy “consumers” to energy “prosumers” with the introduction of distributed solar and energy storage, the focus of power management will change from demand reduction to dynamic source optimization, incorporating building-to-building communication and smart-grid tie-in.
Other segments of commercial real estate benefit from additional use cases. For instance, retail spaces are beginning to install wayfinding capabilities that help shoppers to identify the location of items they are searching for and to suggest promotions along the way. Hotels are implementing connected-home-like applications, with personalized lighting, climate and entertainment control as well as occupancy awareness. And hospitals are leveraging asset tracking to identify the location of portable equipment in real time.
Underpinning all of these use cases is a true step change in technological infrastructure. Successful development and deployment will require merging elements of connectivity, big data, machine learning and mobile applications with traditional building hardware and effectively connecting this infrastructure together in a reliable, secure and extensible manner.