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Proptech Radically Changes The Smart Building Industry

Until recently, the promise of smart building technology was only achievable for large real estate companies with budgets of many millions of dollars. The Internet of Things, or IoT (in which a network of physical devices, appliances and software connect and exchange data to support automation), has been prohibitively complex and expensive for most building owners and facility managers to explore.

Technology, used to power the Internet of Things (IoT), began as custom, proprietary systems. Adding greater connectivity meant wiring up buildings and replacing appliances. For this reason, installing sensors to collect data was costly and time-consuming. So, due to these issues in the past, most commercial real estate (CRE) companies still use manual methods to collect and confirm the data they rely on to manage building temperature, layout, and maintenance schedules.
But maybe there is something better, something accessible for all.
Next-generation PropTech may just be that something.
Proptech solutions embedded with smart, wireless sensors are radically changing the smart building industry. Affordable, low-maintenance proptech (also referred to as real estate technology) means real estate companies of all sizes can also experience the benefits of the Internet of Things – cost savings, increased margins, and improved tenant relationships.

“Smart building technology investments typically pay for themselves within one or two years by delivering energy savings and maintenance efficiencies,” according to management at Jones Lang LaSalle, a global commercial real estate company.


RELATED STORIES: See page 11 for proptech industry news.

In addition to cost savings, innovative real estate companies can offer tenants advanced features and services that can command premium prices. In fact, as tenants come to expect a smart experience, buildings without this feature may have difficulty filling space and will eventually need to lower their prices.

Take a closer look at the quantitative and qualitative benefits the new generation of PropTech can provide.


Building maintenance

  • Avoid unplanned and costly repairs
  • Keep inventory stocked
  • Optimize cleaning service


If you knew when critical equipment such as your HVAC system was about to fail, you could reduce unplanned and costly repairs, not to mention the benefit of avoiding downtime that will engender complaints from tenants. Sensors are able to measure and report equipment usage, overheating, or unexpected changes so that you can get ahead of problems before they happen.



The Honeywell Smart Building Score was applied to almost 500 buildings across seven key cities to validate the tool,
and assess building smartness. Key takeaways from the research conducted on this subject are:

  • Safety is perceived as the most critical indicator of a smart building.
  • According to the survey, the top three scoring assets in U.S. buildings are fire-detection systems, efficient appliances and fixtures, and remote access/wired infrastructures.
  • Public buildings score higher than private buildings across all three categories.
  • Airports, government offices and hospitals are the smartest buildings; high-rise residential and private offices are the least smart.
  • Building managers across all verticals give themselves much higher self-reported assessments than their actual
    scores, suggesting that a Smart building planning and construction may already be underway in cities around the United States.

San Francisco’s Water Power and Sewer’s new headquarters, for example, incorporates an integrated, hybrid solar array and wind turbine installation that will generate 227,000 kilowatt-hours per year (or 7% of the building’s annual energy needs). An onsite “Living Machine” that reclaims and treats building wastewater will satisfy 100% of the building’s water demand, while a raised flooring system will reduce the building’s heating, cooling, and  ventilation costs by 51%. Furthermore, a digital arts wall will display real-time data such as current reservoir levels, hydro-electricity and solar energy generation, as well as a wide variety of building diagnostics.


FAST FACT: Americans spend as much as 90% of their lives in buildings—whether in homes, offices, or recreational, retail or public-service facilities. Commercial and industrial buildings are responsible for 39% of all U.S. energy consumption, 68% of electricity use, 38% of carbon dioxide emissions and 12% of water consumption, at a total cost of $400 billion annually.

In addition to behind-the-scenes maintenance improvements, smart buildings are also integrating sensors into services that are customer-facing. For example, sensors in supply rooms can let facilities managers know when inventory needs to be stocked. Sensors in office buildings allow cleaning services to be optimized and confirmed.


Energy management

  • Adjust lighting and temperatures
  • Decrease building operation costs
  • Support sustainability programs

With energy representing 19 percent of the total expenditures for the typical building, proactive, data-driven energy management can make a big impact on the bottom line. Smart sensors decrease building operation costs by automatically adjusting lighting, ventilation and temperatures based on the number of occupants, as well as the building usage patterns. According to Energy Star, even a 10 percent decrease in energy use can lead to a 1.5 percent increase in net operating income, increasing a 200,000-square-foot asset value by $500,000. Simply by varying ventilation levels based on the number of people in a room, occupancy detection sensors can decrease building operation costs by up to 18 percent.

In addition to cost savings, CREs and building managers look to sensor-driven technology to meet increasingly strict energy regulations as part of a comprehensive sustainability program.


Space utilization

  • Configure layout based on occupancy and footpath sensing
  • Plan office moves, remote work and hot desking strategies
  • Book meeting rooms with push buttons

Commercial real estate (CRE) in the U.S. accounts for 12 billion square feet. But only 67 percent is utilized. Changing work patterns are driving many companies to re-evaluate their real estate footprint and adapt to lower demand for physical space.

Smart sensors can detect building occupants’ locations, count, and movements with extreme precision, while maintaining individual privacy. Based on the data, CRE companies can reconfigure building layout or plan for changing demand. They can also help tenants make data-based decisions to adjust office layout, add or subtract meeting rooms, or implement hot desking strategies.

In a retail environment, sensor-based footpath tracking can allow store managers to adjust product placement, plan staff support for peak times, and make inventory adjustments to match customer demand.



  • Keep tenants comfortable and healthy
  • Reduce complaints and tenant turnover
  • Improve workplace productivity

Among CRE customers, keeping tenants comfortable is a top goal. Companies based in smart buildings find that workers are happier, healthier and more productive in the smart building environment. CRE companies also benefit from fewer tenant complaints and less turnover.

Some customers such as CBRE use sensors to track temperature needs based on occupancy, time of day and other variables. CBRE reports dramatic differences in their ability to meet customer expectations with these sensors.

It’s getting easier more quickly

At Disruptive Technologies, they are partnering with innovative real estate companies and PropTech companies to make the promise of smart buildings a reality.

One hundred lightweight, mini-sensors can be installed in just one hour. Wireless technology with low-power and long-range capabilities can be used even in large buildings, without needing to tap into the tenant’s infrastructure. Unprecedented battery life allows tenants to just “set and forget” without requiring ongoing maintenance.

With a streamlined technology stack, you can get the data those sensors collect integrated into building management systems and analytics software easily, so you can turn insight into action right away.

And that’s piece of mind.

-Erik Farevaag, CEO, Disruptive Technologies Research.


FAST FACT: Approximately $6 billion in venture capital has been invested globally in PropTech since 2011, and about 70 percent was in the last two years alone.
Source: CB Insights.


FAST FACT: With the largest commercial real estate market in the world, New York is currently the worldwide PropTech hub. But in Europe, the United Kingdom is leading the way, although eyes are looking beyond these areas for the future of PropTech.
Source: Forbes.