Today, technology is the badge of vision and financial commitment that showcases the value of real estate. The impact of Internet of Things (IoT) and evolution of advisory services are directing a tipping point across the market. Building owners and managers who step aside from this wave of technology risk increased volatility in the valuation of their buildings and even their businesses. Dynamics in the commercial office sector showcase just how important a clear strategy around technology is to future-proofing well-established businesses.
Occupants Have Power, but Their Demands Are Fragmented
According to a Brookfield Property Partners chairman, “Tenants have seemed to shift from focusing on cutting costs and being cost efficient to attracting, retaining and motivating their employees. Tenants are partnering with landlords so they can solve their people goals.” For the last several years, it has been near impossible to have a discussion on technology investment and the commercial office sector without hearing about the impact of the millennial workforce. Millennials demand flexibility and collaboration, and the result is a dramatic shift to open offices, non-traditional schedules, and customization.
These expectations have upended the asset planning strategies for many building owners. Multiyear plans for capital assets and space planning are no longer sufficient to maintain best-in-class distinction. The challenge persists because although building owners have invested in the demands of millennials, new expectations are arising for the next generation. Generation Z, born after 1995, totals almost 2 billion people worldwide. Often referred to as digitally native, this future workforce is expected to shatter expectations for employers and workspaces. Real estate owners have scrambled to support the collaboration and flexibility demands of millennials, and early research suggests Generation Z may flip things once again. According to Cushman & Wakefield’s The Occupier Edge, Sixth Edition, 53% prefer in-person communications over email or instant messaging and 91% report “technological sophistication” affects employment decision-making.
Three Steps to Hedging the Risk of Rapid Workforce Evolution
- Cost-effective equipment to digitize the office: Sensors, gateways, and controllers are becoming affordable commodity purchases to refine the data profile of large buildings or even create a new infrastructure in smaller buildings. These digital components are the foundation to the digital transformation of a facility into an intelligent building and a critical investment to support the flexible space planning and real estate management strategies that will hedge the risk of uncertain and shifting worker expectations.
- Analytics to translate data into insight: Software investment is table stakes for managing the modern office space. Occupants expect tailored conditions that meet their lighting, heating, and cooling preferences and even advanced applications to support productivity. While these metrics are much harder to quantify than traditional ROI metrics around energy efficiency, the benefits are clear. These analytical tools are also critical behind the scenes for operational strategies to meet the high demands of today’s and tomorrow’s workers.
- Services to act on insight: A cohesive interplay between operational and informational technologies is required for successful intelligent building solution deployment. There is a human capital gap in many organizations, as their IT departments are excluded from facilities decisions or their facilities teams lack IT understanding to drive the best investment. Both these functional departments are often short-staffed and operating with tight budgets, so expanding their responsibility set can also be challenging. Furthermore, the real benefits of deploying an intelligent building solution roll up to the C-suite with insights that speak to both the top and bottom line. These dynamics open the door to greater advisory and even partnership opportunities that can support the transition and ensure the owners and management realize the full benefits of the investment.
Check out Navigant Research’s Intelligent Buildings Market Overview report for more on how technology can transform facilities into business assets that meet ever shifting occupant expectations.
Tags: Building Innovations, Digitization, Intelligent Buildings, Workforce Evolution
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