How bright are smart buildings?

While landlords like Rudin are implementing the tech, only about 20 percent of NYC office properties are built to sustain it

Illustration by Daniel Nyari
Illustration by Daniel Nyari

Every time a tenant enters or exits a Rudin Management-owned property, the building notices. A sensor in a turnstile near the entrance sends a signal to the property’s operating system, dubbed Nantum. The system can sense sudden shifts in occupancy and quickly adjust its heating and air-conditioning depending on the season.

Rudin launched the independent tech startup Prescriptive Data — Nantum’s creator — in June 2016. The Manhattan-based company supplies Rudin’s buildings as well as properties owned by six other landlords with its technology. (A representative for Rudin declined to name the other landlords.)

The startup seems to be at the forefront of the smart building revolution underway in commercial real estate, including rental apartments.

“Property owners are just now realizing that they need to future-proof their buildings,” said John Gilbert, Rudin’s chief technology officer and executive chairman of Prescriptive Data.

Smart building technology can also be useful in the event of a natural disaster or attack, Gilbert said, explaining that Nantum knows exactly where people are in a building as well as general movement patterns. That, he said, can help warn landlords and tenants of an “impending safety concern in real time and can help emergency services identify the specific location of occupants.”

Following Rudin’s lead, Convene is now working on a building operating system that uses beacon technology. The firm, which manages common spaces and amenities as well as co-working spaces, is currently beta-testing its system in two office buildings. One of those is owned by Brookfield Properties and the other by the Blackstone Group, said Chris Kelly, co-founder of the tech-focused office services firm Convene, which has raised $119.2 million in venture funding since 2009. With the help of beacons, the building’s operating system can automatically change a room’s temperature and lighting or even order a cup of coffee depending on who walks in.

The smart buildings of the future, Kelly and other sources said, will be akin to giant computers run by even more advanced operating systems that increasingly rely on machine learning.

Smart building technology is also being enabled by a new wave of home automation products such as Google’s Home and Amazon’s Echo. The voice-recognition gadgets allow consumers to control their music, entertainment and shopping whims from anywhere in their home.

Firms like Nest, which Google acquired for $3.2 billion in 2014, produce smart thermostats, while others like Latch and Teman, which makes, sell smart door technologies: screens that recognize faces and let customers open and close doors from virtually anywhere on their phones, in some cases with the help of Wi-Fi. And the list goes on.

“A building manager goes home and talks to his Alexa and has a really great software experience with five or six different mobile apps during the day,” said Luke Schoenfelder, co-founder of Latch, which has raised $26 million since it launched in 2014 and markets its products to multifamily property owners. “Then they get to their office, and all the systems haven’t changed in 20 years.”

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The proliferation of home automation products has rapidly increased the need for operating systems in large commercial properties, argued Gilbert. Hotels are also waking up to the trend.

For example, Verdigris, which sells technology that monitors a building’s energy usage, counts Hyatt, InterContinental and W Hotels among its clients.

Technologies like Latch produce data, but landlords can’t effectively use that data unless they’re properly wired to a central system.

While costs of these systems vary and are tricky to pin down, Gilbert said Rudin’s Nantum system has saved the development firm about $5.5 million a year in heating, electricity and maintenance expenses.

Smart technology can also help reduce disturbances by tracking elevator usage and estimating when repairs are needed. “I don’t think about it as the future,” said GateGuard creator Ari Teman, speaking about smart buildings generally. “It’s happening right now.”

But while the idea of responsive buildings may sound like a no-brainer for owners, there are obstacles.

Arie Barendrecht, co-founder of WiredScore — which grades buildings’ connectivity and tech infrastructure — said that only about 20 percent of New York office buildings have the high-speed internet wiring needed to sustain smart buildings. In addition, it’s a big upfront financial investment for landlords — especially if they invested heavily in their properties.

“[It’s] never an easy shift,” Barendrecht said. “If you’re a building owner, there’s obvious hesitation to completely cede human intervention.”


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