A city that sports more icons and iconoclasts per square mile, than any other tract of real estate on the planet, is more than just an ‘urban center’. Throw in F Scott Fitzgerald, Saul Bellow, Woody Allen, Martin Scorsese, Billy Joel, The Beastie Boys and Nas – a fraction of the list of those who have set their art to its backdrop – and New York’s status as a globally unparalleled metropolis is only reinforced further. Far more than five boroughs and the Hudson snaking its way into the Atlantic, the Big Apple is, first and foremost, the most prime commercial real estate location in the world.
As much as its famed architecture befits its legend already, New York is upping the ante on that score some more. The square footage added in Manhattan alone, in recent years, and the additional space in the pipeline, boggle the mind. An astronomical 24.52 million square feet were added to Manhattan’s commercial real estate over the last decade, and an additional 20.40 million square feet is set to become available between 2020-24(1).
That assets coming to market include projects such as One Vanderbilt – 1.6 million square feet – and Hudson Yards – 25.8 million square feet – feature state of the art facilities and services, means many commercial real estate owners in New York are under pressure to find ways to remain relevant. Matters are being complicated further by the fact that the NYC commercial market is showing a distinct preference for leases over purchases, which requires building owners to constantly innovate and stand apart. Although, rent concessions and tenant allowances are being tried as an option by some, this is largely a strategy with diminishing returns that only represents a slightly slower descent into irrelevance.
Rethinking the means to be competitive
WeWork’s current troubles notwithstanding, coworking has certainly introduced a new perspective to creating value in commercial real estate. One of the ways it underscored accessible profitability was amplifying the productivity of a resource, by changing the way users interact with it. Maor Cohen, CEO of the global coworking directory Pickspace, was recently quoted as noting that “75% of working spaces are not profitable because of overhead costs”. While the fundamental truth of that statement may be incontestable, the Sharing Economy isn’t the only path to operating cost nirvana.
According to Facilio, a startup headquartered in New York that enables IoT and AI driven, real-time and portfolio-wide operation optimization for buildings; the future of commercial real estate rests on data that it already possesses, but isn’t leveraging. Automation in built spaces is constantly generating information that can be used to optimize efficiency, but this data typically lies unused in siloed systems. Unlocking this potential was a bridge too far in the past, but emerging technologies are making far more interconnected and agile commercial real estate business models possible.
Operational data as a resource
Collating data to optimize operational efficiencies has already revolutionized several industrial sectors. However, real estate was often thought of as being a much more complex proposition for this model. The average building has infrastructure and devices sourced from multiple manufacturers, and vendor specific protocols have always seemed like the ultimate hurdle for true system wide integration. Facilio resolves this problem by creating an enterprise-wide platform that collates data from all building automation, subjects it to AI based analysis, and delivers actionable insights in real time. What makes the solution a must-have, and the ultimate enabler for commercial real estate, is that it is completely agnostic to the automation that the data is sourced from. For the first time, building owners have the opportunity to monitor, optimize and integrate the assets and resources, across their entire portfolio.
A solution such as this has eluded real estate in the past for many reasons, but collating the sheer torrents of data a building produces, on a constant basis, has probably been the single biggest impediment. For building owners to be able to own their data, and have a single platform on which they can leverage it, is a capability that changes everything about their operational efficiencies.
So what will such a data-driven model enable?
The impact of a software enabled data-driven approach, both immediate and over the longer term, is striking. Being a software based solution, one of the most obvious advantages is that such an approach to optimizing operations is a fraction of the cost of a hardware upgrade. Not only do businesses not have to discard existing assets and automation, they can utilize them far more effectively than they could in the past. In addition, acquiring operational data is itself a time and resource consuming activity for real-estate asset managers, in the legacy model. Considering this is an activity that is periodically repeated, the effect of such limitations adds up considerably, over time.
The ability to collate data on one centralized platform, across siloed systems such as automation, equipment, utilities, workforces and more, as well as across an entire portfolio, empowers commercial real estate businesses in numerous ways. Such data can be used for efficient audits and compliance, effective sustainability management and empowering enterprise solutions such ERP, finance, HR and integrated workplace management systems. Gaining insights about equipment performance from current and historic data to enable predictive maintenance is yet another major positive that a central repository of data enables.
One of the major emerging challenges to commercial real estate business models is increasingly stringent environmental regulations. Data- driven models deliver optimal energy and resource utilization, resulting in unprecedented sustainability profiles. Building owners can create truly delightful experiences for their tenants needs, driving higher occupancy rates and perceived property value. Workforces can also be utilized to their optimal potential, adding yet another avenue for cost savings and value addition.
The Smart City concept has already generated a consensus around the advantages of intelligent infrastructure. Enterprise-wide software platforms are the shortest and most effective path for commercial real estate businesses to achieve the full spectrum of these advantages, today.
Know how Facilio, the world’s only real-time facilities optimization platform is transforming the way people interact with buildings.