3 BIG ways IoT impacts the financial management of commercial buildings
This is the third post in a four-part series on how the IoT is impacting buildings.
So far in this series, I’ve looked at how the Internet of Things (IoT) is impacting both building design and construction and building management. Now, I’m going to turn my attention to everyone’s favorite topic: money. More specifically, money as it pertains to facilities and real estate management.
As we’ve discussed, the Internet of Things is providing new sources of data that are changing our understanding of buildings. This is helping real estate owners and managers save money, invest more wisely and even monetize portfolios of assets in new ways. In this post, I’ll share three ways that the Internet of Things can affect the financial management of buildings.
At first glance, when you see lots of people scurrying about an office building, it might seem like the building is at maximum occupancy and practically bursting at the seams. But by combining the data from your facilities management systems with IoT data, you can begin to reveal startling new insights. For example, your building may have a 12-person meeting room that is always booked. But upon closer examination of sensor data, you might discover that it is never occupied by more than 4 people. Wouldn’t it make sense to create several smaller conference rooms, and use the rest of the space to accommodate workstations?
These insights can be useful, not just in smaller, one-off projects, but they can also be extrapolated to identify high-return real estate transactions and to prioritize major capital investments across your entire real estate portfolio. By connecting your data across multiple buildings, you might realize that you can reconfigure and consolidate conference rooms and workstations across multiple buildings, allowing you to co-locate the entire marketing department on the same floor, as well as helping you avoid unnecessary new construction of a satellite office to accommodate headcount growth.
Consolidating the data from all of your real estate assets also offers benefits when it comes to lease management. We’ve already talked about how IoT can improve space utilization in your building. This has implications for how you manage leases as well, because once you’ve identified under-utilized space, you can then, of course, monetize it.
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The ability to connect information from across multiple buildings also adds additional value here. Analysis across multiple buildings can reveal opportunities to optimize lease portfolios or help you make smarter decision about the administration, acquisition or disposal of real estate. Greater insight into how people are using your buildings can also yield new types of leases, such as consumption-based or variable-priced leases, and as new business models emerge, entirely new types of leases can be designed around them.
New revenue models
Emerging companies like AirBnB and WeWork are changing the way we think about paying for access to buildings, and this model can be applied to all types of facilities. A property or even an entire portfolio of properties can be managed remotely. Customers pay online, and the space can be unlocked for a discrete amount of time, using a smartphone. This model is especially appealing for startups, which may need temporary meeting space for a big client meeting. It also provides opportunities for remote employees or self-employed contractors, who may prefer hot-desking in a communal space to working from home so that they can connect with other like-minded professionals.
Some companies, like Breather and Liquid Space, are even taking this a step further. These companies act as digital marketplaces, opening up new ways for real estate owners to creatively rent out spaces that are under-utilized. For example, a corporate training facility might have a classroom that was designed to hold 200 students, but that classroom might only be in use only a few times a month. The space is largely empty, and could be rented out to groups when not in use. Through deep analysis of real estate portfolios with help from IoT data, real estate managers now have the ability to unlock entirely new revenue streams in very creative ways.
These are just a few of the ways that IoT is changing the financial management of buildings. How are you planning on using the Internet of Things to get the most out of your real estate portfolio?
For more ideas on how IoT can make buildings smarter, check out these other posts in the series:
- Part 1: 4 BIG ways that IoT is impacting design and construction
- Part 2: 4 BIG ways that IoT is impacting building management
Or read the white paper ‘The Economy of Things’ to learn how IoT is poised to transform industries and create new, disruptive sources of value for businesses.