Smart Building Apps Ascend on Corporate Priority Lists
By Rachel Duran
The adaption of smart building technologies in the United States has expanded beyond the office sector, spreading across real estate asset types such as health care systems, hospitals, hotels, colleges and universities, and industrial and manufacturing. These technologies are widely deployed, complete with features and functions that companies can add on to their services.
Corporations and organizations are interested in implementing smart building systems in their facilities for a number of reasons, including the ability to achieve reductions in energy consumption, and the cost savings associated with this. Companies also recognize that their customers, employees and shareholders care about environmental sustainability, and are looking to conduct business with organizations with similar goals.
In addition to assisting companies in meeting their goals for energy and environmental sustainability initiatives in their real estate portfolios, these technologies tie into security systems and fire safety systems. You can also manage conference room schedules, dedicating lighting and HVAC services to that part of the building at specified times.
Solving the Real Estate Challenge
The United States and other countries have been slow to catch on in regard to the benefits of sustainability in real estate portfolios. European countries have been much more progressive with these initiatives. “The largest difference is that in foreign markets, owners do not seem to be trapped by tradition as they are in the United States,” writes Thomas Taylor, co-founder and principal of Vertegy LLC, in an email correspondence. “Other countries are willing to leap frog over the traditional delivery and look for more cutting-edge solutions. In the Middle East, for example, owners are willing to spend the money for alternative energy technologies, and are more willing to accept a ‘custom’ system instead of the ‘old tried and true.’”
Office buildings, institutional facilities, health care facilities — these facilities will be around for a long time. It is estimated that 75 percent to 85 percent of buildings standing today in the United States will still exist in 20 years. The economics of low cost operational improvements has been important to building maintenance for areas search as HVAC and lighting, but actually spending the money to conduct sustainability upgrades can be challenging.
As energy costs continue to go up, the costs of alternatives such as lighting and control alternatives have become more reasonable. What’s more, advances are continuously underway. Take for example the ability to individually control fixtures in response to factors such as natural daylight.
Sustainability measures in real estate also include the deployment of alternative energy resources, particularly in regard to solar energy installations. Lower prices and incentives make these deployments more appealing. Building owners also find that new technologies such as waste energy for certain installations are starting to make sense in their strategies. Advances in smart building technologies are opening up new opportunities for business owners to achieve payback on the systems within ranges from six months to 18 months.
“I tell our people in the building industry you will see more people focused on existing buildings and doing operational things and spending capital on those buildings,” says Dan Probst, chairman, energy and sustainability services for JLL. His global team assists corporate clients in meeting their goals for energy and environmental sustainability as it relates to real estate. One of the group’s functions is to encourage companies to think about their real estate occupancy strategies and workplace standards in order to reduce their environmental footprints, which result from using spaces more efficiently.
For Vertegy, a sustainability consultancy specializing in third-party certifications, projects span the gamut of real estate, ranging from a 5,000-square-foot building for a private foundation, to a 350-acre project and 2.1 million square feet of heavy manufacturing space. Clients range from private owners to large multinational companies. “There has definitely been a growth in the private sector where owners realized that they can make an impactful statement by moving into or building a green building,” Taylor notes. “Operating in a green building tells the public what your company is about before they even ask. A company that operates in a green facility is perceived to care more than a company that is housed in a traditional building. Public image is not the only reason why owners go green. There is the cost pay back or return on investment, lower health care costs and higher productivity.”
Taylor points out although the U.S. Green Building Council states the above benefits can result from building or moving into a green building, due to the soft measurements, with the exception of ROI, it is nearly impossible to measure an increase in productivity. “Unless a company is in the business of making widgets, which provides hard numbers on productivity,” Taylor writes. “If you have more of a white collar business or a service industry, productivity is much harder to measure.”
You Have to Start Somewhere
So, where do you start in regard to implementing sustainability measures in real estate portfolios? “One of the things we talk about is to do the right things in the right order in a portfolio and attack low cost or no cost operational things like making sure you are not leaving the lights on all night or running HVAC systems 24 hours a day … those type of things,” Probst says. JLL’s smart building program is called IntelliCommand, which is a monitoring-based commissioning program that enables companies to optimize building performance in real time. The program is a combination of cloud based, smart building management technology, and facilities management professionals monitoring facilities in real time.
These types of programs give companies “a deep visual in how a building is performing, allowing for adjustments or identifying things that are not working properly, or even identifying equipment failures before they occur,” Probst notes.
In a case study of work JLL has conducted for Procter & Gamble, the firm initially deployed a subset for P&G’s real estate portfolio, and is now rolling out services for a larger portion of the company’s portfolio. P&G is the pilot company for JLL’s IntelliCommand program. The program is deployed across 12 buildings totaling 3.2 million square feet of space, including P&G’s global headquarters campus in Cincinnati. “We are consistently seeing anywhere from 10 percent to 20 percent energy savings on top of doing the right things in the right order,” Probst says.
JLL was also the lead program manager for the energy retrofit work that took place at the Empire State Building, which is delivering a 40 percent savings off of its base line. The renovations are expected to generate $4.4 million in annual energy savings. The Empire State Building consumes as much energy in one day as 40,000 single-family homes. The sustainable retrofits are expected to reduce the building’s greenhouse gas emissions by 105,000 metric tons during a 15 year period.
JLL is not only one of the partners of the sustainability program for the Empire State Building’s renovation, but also plays a role in establishing an economically viable, replicable model for additional green retrofits of this magnitude.
What Does It Cost?
In order to keep these high performing buildings at peak efficiency; attention must be paid to ongoing maintenance. “Even a brand new building that is LEED Platinum — it is well documented that these facilities can get out of calibration quickly,” Probst says. “Sensors are out of calibration or they are not working right, or something has overridden them for some reason, which has a snowball effect where the building is no longer performing at peak efficiency. Or with existing buildings, you do all this retrofit work and the same thing can happen.”
Taylor points out corporations don’t have to break the bank when it comes to going green. In fact, he says it is more of a myth than a fact that costs associated with green construction are higher than traditional building methods. People often ask me: ‘How much more will it cost?’ Taylor notes. “My response is: ‘More than what? What are you comparing? A person should never try to compare a green building to a traditional building — it is very dangerous. Comparing green to traditional cost models is a little like saying a Bentley costs more than a GM.
“If you wish to compare costs, prepare a budget for a traditional building,” Taylor continues. “Do not look at the individual line items – focus on the total. Now go to the market and ask them [companies] to furnish your building – your new green building — for the budget you established. An owner might be surprised how reactive the delivery teams in the marketplace can be. In my experience, a team will rise to the challenge and deliver that owner a green building for the same total costs as was used in the initial cost models.”
Adds Probst, “When we manage facilities, part of our scope is taking responsibility for the utility line item and finding every way possible to reduce energy consumption, and often energy, waste and water consumption. This includes identifying low or no cost operational items, and making retrofit recommendations for certain buildings, as well as using energy audits or other measurement processes to identify cost saving opportunities.”
Corporations will find smart building technology applications are changing and advancing in order to allow for real-time solutions when managing facilities. Additionally, incorporating environmental and sustainable practices into a real estate portfolio not only says your organization cares about the environment, but also reduces your environmental footprint, allowing you to use space more efficiently.
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Illustration by Stuart Miles at Free Digital Photos.net