The Real Deal New York

Beacons pick up where GPS stops: mining data inside buildings 

Companies like WeWork are adopting the technology to help design more efficient spaces
By Konrad Putzier | February 27, 2018 05:00PM

Illustration by Daniel Nyari

“Location, location, location” isn’t just the real estate industry’s mantra. Google Maps and Uber don’t work unless they know where users are.

GPS “is a critical element of digital services in our lives outside of work,” said Chris Kelly, co-founder of the tech-focused office services firm Convene. “There’s just one problem with GPS: It can’t see inside buildings.”

But beacons — tiny devices that can be placed almost anywhere in a room — can. And they are slowly starting to reconfigure the use of commercial real estate.

By sending out Bluetooth signals that get picked up by nearby smartphones, the technology can track who is in the room. The devices have been common in the retail business for several years — at the very least since Apple showcased its iBeacon protocol in 2013.

Retailers can use beacons to send advertisements to customers’ phones when they walk into a store. In 2015, Business Insider estimated that beacons would be responsible for $44 billion in retail sales in 2016 alone.

More recently, the technology has emerged as a key component in the smart building revolution underway in the office, hotel and residential markets. WeWork, which is now backed by more than $6 billion in venture funding, is using beacons to design its buildings more efficiently by tracking its users’ movements. The push to use beacon technology is part of WeWork’s broader strategy to turn its offices into smart buildings. The company has long employed an in-house tech team headed by David Fano and last year hired Apple veteran Shiva Rajaraman to oversee its digital products.

Beacon technology can also help office users find their way around a building, much like GPS does outside. And it allows a building manager to anticipate repair needs by tracking the use of elevators or restrooms.

With beacons, Kelly said, “everything in a building is moving from defense to offense.”

John Gilbert, Rudin Management’s chief technology officer, echoed that point.

“If you are not gathering and mining data within your buildings, then you’re really not doing your job,” he said.

But there are obvious privacy concerns. Tenants may balk at having their every movement tracked and recorded — a Big Brother situation that’s recently haunted Facebook.

In mid-2015, the Federal Trade Commission reached a settlement with beacon technology firm Nomi Technologies following allegations that the company misled retail shoppers about their ability to opt out of its tracking system.

In a report published at the time, FTC chief technologist Ashkan Soltani said beacons create privacy issues that “are further exacerbated by the fact that most consumers are not aware that their device information may be captured as they walk by a store or visit an airport.”

Check out the complete version of this cover story in the February 2018 issue