Intelligent Buildings from the Executive's Point of View

At the recent Realcomm Conference in San Diego there were a number of break-out sessions on the whole topic of "Intelligent Buildings". This is an important emerging trend that involves more than just energy management and enhanced security. This is conceptualizing , designing and then constructing buildings that incorporate technology and processes to enhance the work space.

Any discussion of this topic can move quickly to new and often expensive technologies but it also can focus on meeting the needs of tenants and users and creating better workspace -- which are healthier, safer, with enhanced communications, design, and other features. Resulting potentially in a strong branded building with real estate differentiation.

Here is a quick list of some of the areas getting discussed in this whole area of Intelligent Buildings.

1. Power



2. Communications



3. Computing



4. Security



5. Control



6. Digital Signage



7. Much More
   

It is really clear that to develop these Intelligent Buildings you have to work early on to bring a team together to create a "common vision". What do you want to accomplish? What should performance standards be? How much will it cost? How much will it save? Can we calculate a "pay back period"? What features should our building have? Also you should probably develop a checklist to talk about the perceived benefits of:

• Special HVAC Systems, and their controls?



• Security and Access control to the building and to parking?



• Security Camera Systems? Swipe Cards or BioMetric Access.



• Incorporating and Integrating Security System to Time Cards, to turning on or off lights, computers, and etc.



• Digital Signage and Digital Media. inside, in lobby's in elevators and potentially on the external skin of the building?



• What kind of Cabling for Computer and Communications?



• Wireless and WIFI and Cellular Rebroadcast Enhancement?



• Emergency Power?



• Redundant Air?



• Dry Fire Protection?



• Racks and Cages for multiple tenants.



• Integrating these items into a centralized(web based) control room.
  

We know , you think this all costs money, and it does... but you do this because it saves you money and creates enhanced net operating income and long term value. You do this because you can differentiate you product offering, and increase operating performance, save energy, provide better and fuller services to tenants and users, increase health and safety at the building, increase rents, and reduce costs. You do good and you do well as a result. These are the right things to do and they make financial sense.

The CEO of a building and the CEO of the tenant should focus on a few high level questions.

1. What is the value proposition to the tenant?



2. What is the value creation to the owner?



3. Branding and differentiation for owners and users?
   

As we listened to these presentations and participated in the full discussions of these matters it becomes apparent that these are the right things to do -- but in the real estate industry there is a lot more talk about it -- and planning for it -- than actual success stories. That is changing though.

One of the panels was; "Intelligent Buildings from a Real Estate Executives Point of View" ; and it included leaders within this industry , including Tom Shircliff of a firm known as Intelligent Buildings, as well as representatives of GE Asset Management, Tridel Corporation, and Colonial Properties Trust.

Tom LaDow, and executive with this REIT Colonial Properties described a mixed use project with a 170,000 square foot office building which they developed in the "progressive green capitol" of Birmingham Alabama. Here is a list of their amenities:

Attached to Mall anchored by Macy's, Belk & many others
Concierge Service
Covered Parking
Dual power feeds from two separate power substations
First LEED Gold certified multi-tenant building in Alabama
Highly efficient floor plates
Locker Rooms with Showers
Multiple On-Site Restaurants
On-Site Maintenance
Wireless capabilities

And here is a picture of this building that was finished in 2007. It is 100% occupied.

As Tom explained the development and the marketing process it made great sense. But the financial performance really caught our attention. The Building is 100% occupied, and was totally leased up within months of completion. They got a 36% rent premium to the market! Their rents are about $8 per foot higher than market. Their utility costs are 6% less than other buildings. The tenants loved a focus on the "21st Century" features and design. They are proud that they are occupants at such a high quality --environmentally responsible business location.

The other part of the story was how they marketed the property. They created a story and deliverables about the benefits of the building. ( WIFI, Enhanced Cell Phones, Safety and Security,a Webport for the Building and it's tenants, LCD Screens with Digital Signage, Data Recovery, Back-up power, Web based work order system for tenants, etc etc..) They made their presentation based upon benefits and attributes not just to the Real Estate and Facilities decision makers but they also targeted and pitched to the CFO and the Chief Information Officer(s). They shared information that resonated with the IT and financial folks as well. This is a real case example of it working.

I asked Tom, if they were thinking of selling the property and making a quick gain based upon the NOI. He said to me " Why no it is doing just great we are working on developing and building our next one."

Here is a link to Colonial Properties Birmingham Alabama property offering. http://colonialprop.com/property-info/?cid=1326

If we can help you with strategies about an Intelligent Building and the related elements of ; vision, innovation, collaboration, sustainability, and consideration of utilizing technology and targeted marketing please give us a call. For questions about this post or to discuss please contact Jim Gray or Nahz Anvary at (916) 617-4255 or (916) 617-4257

Realcomm --10th Annual Conference San Diego --Some Observations

Realcomm is a name that everybody interested in the juncture between Technology and Real Estate needs to know. This week in San Diego, Nahz, Collette Kyro, and I --as well as Mark Bollozos and Jason Berry, colleagues from our Bay Area offices --attended the 10th Annual Realcomm Conference. The 5 of us were among a crowd of close to a thousand who attended.



It was our third consecutive Realcomm Conference and we want to congratulate Jim Young, the founder and CEO of Realcomm and his colleagues and sponsors for another great event. We left there full of ideas, stories to share, re-connection with old friends, and with the promise of new clients and services.



Sponsors this year included such firms as Cisco, Intuit,Yardi, Argus, REapplications, Johnson Controls, Panduit, Microsoft, Oracle, SAP, real foundations, Siemens, Tridium, just to name the first levels of sponsors. From the real estate industry side the conference was produced in partnership with AIA, the Appraisal Institute, BOMA, CCIM, SIOR, IREM and the like.



The theme for the conference this year was:

• INvestigate-- discover new technology solutions that will benefit you, your company and your clients.


• INititate-- get direction and insights from leaders in the fields or technology and real estate innovation.


• INnovate -- stop thinking about it and take action-- go beyond the "status quo".

The first general assembly topic was a keynote address by 10 different presenters entitled " The Big Ideas" in which they shared ideas and concepts from around the globe that are leading to major changes in the way you design, build, lease, operate, manage, and transact space. The presenters were preceded by an old fashioned marching band who brought the audience to their feet and brought smiles to every one's face. The presenters drove home how global real estate and real estate capital is becoming, and reminded us that a number of innovations as well as busts( dotcom and subprime collapse) have emerged in the past decade. Google Earth, LoopNet, Intelligent Buildings, IP addressed controls to every light and switch, Web Based property Management Orders, tracking and controls, and the boom in smart buildings in Asia, the Middle East, as well as Europe and USA to a lesser extent.

Throughout the conference there was an active and packed Exhibit Hall, with a number of vendors offering their products and services, that enabled attendees to see first hand the next generation of offerings and to discuss the applicability to their particular project, business, or building.

There were four tracks that offered a number of break-out sessions, with industry leaders acting as round tables making presentations and answering questions. The four tracks included:

1. Align-- A focus on Business and Management


2. Automate-- Streamlining Business Processes


3. Connect --A forum and Presentations on Intelligent Buildings


4. Lights Out-- $mart Energy Makes Smart Cents

We took lots of notes, grabbed lots of hand-outs and business cards, and were amazed by the future is now -- time to change quickly in a pretty stodgy and lagging industry. The need for transformation is apparent and the value proposition is becoming clear.

We are going to be preparing some reports and follow-ups on behalf of some clients -- particularly in the areas of marketing and enhancing the value propositions in LEED's buildings and in the areas of adding value by acquiring and retrofitting Existing properties and making them best of class.

Here is a link to Realcomm... Subscribe to their free enewsletter. Get to know these folks and their offerings. http://www.realcomm.com/

If you have questions or comments about this post or if we can be of service to you please call us. Jim Gray or Nahz Anvary at (916) 617-4255 or (916) 617-4257