Investors and commercial owner-occupiers are increasing the demands they place on buildings. The rise of co-working, the growth of the building wellness movement, the increasing imperative to reduce building operating costs, and the pressure to provide buildings with strong green credentials are driving real estate owners to develop new approaches to the way they run their buildings. Real estate owners are being forced to adopt new strategies as they seek to minimize vacancy rates and grow asset values.
For real estate owners it is both a stressful and exciting time, as they face more pressure than ever to deliver material differences to the working environment, meet sustainability goals, unlock financial gains and cope with changes in their own workforce. In order to meet the growing demands of various stakeholders, real estate owners are looking for ways to optimize the performance of their buildings. Building owners face demands to:
Improve occupant comfort, health and well-being
A growing body of research is demonstrating that creating better environments for building occupants drives productivity and supports wellness and stability in the workforce. When people are an organization’s biggest asset, optimizing a building to enhance health, well-being and performance of staff are increasingly important business drivers for tenants of commercial real estate.
In 2018, 91% of US real estate decision-makers interviewed by Verdantix rated improving building occupant’s comfort and well-being as either a high or a medium priority for their firms:
Building tenants now expect their workplaces to provide healthy, comfortable working environments that support productivity. To promote the wellbeing credentials of buildings, owners have turned to a growing list of certifications. These include GRESB (founded in 2009), the WELL Building Standard (2014), and the Fitwel certification (2011).
Adapt to changing workforce dynamics
Job descriptions for facility managers are almost unrecognizable when compared to those ten years ago. Building owners struggle to secure people with the right skill set. In 2017, the Verdantix global survey of real estate decision-makers found that over half of building owners outsource the maintenance activities of buildings because they don’t have the available resources to properly maintain a dispersed portfolio.
Trim utility costs
Reducing the cost of utility bills is a key objective for most real estate owners (Figure 2)3. For these firms, the replacement of lighting systems with LED lighting delivers one of the most robust and reliable business cases and many have chosen to implement this change. Replacing ageing Heating, Ventilation and Air Conditioning (HVAC) systems can also deliver major energy efficiency gains. Once these asset replacement measures have been completed, finding further savings becomes more challenging. This is forcing facility managers to take a far deeper look into how to optimize the operational performance of their equipment.
Deliver on the digital promise
More and more of the equipment developed to run buildings is being delivered with in-built connectivity, and many buildings have rich data sources in place, from sub-metering to Building Management Systems (BMS) and IoT sensors. There is growing pressure on building owners to utilize this data to deliver business outcomes. The problem is that this data is often siloed in different systems including spreadsheets, handwritten documents and isolated databases. Manually integrating this data, and deriving useful insights from it, presents a major challenge for building owners.
Meet more stringent green credentials
Building owners are challenged to provide tenants with buildings that deliver strong green credentials. Whether it is occupants requesting green certifications to support their company reputation, or building efficiency mandates driving the requirement, there is pressure on building owners to comply with more stringent standards on environmental performance.
What does this mean for building services firms?
To meet the evolving demands of building tenants and investors, building owners will need to look for new solutions. Their traditional solution partners are building services firms. Historically, these firms have established business models built around the hourly rate of engineers or maintenance professionals sent to sites to solve problems. This type of model is too narrow, too reactive and insufficiently sophisticated to deliver the types of solutions which building owners and their stakeholders now require.
Increasingly, to deliver on the expectations that investors and occupants are demanding, building service providers will be expected to move beyond the scheduled and reactive maintenance strategies that often yield poor outcomes for the building and the people who occupy it. Many firms risk falling behind their peers, or being disintermediated by new market entrants, if they have not built the capability to deliver the quality and variety of services clients are starting to demand.
In today's environment, it's no longer enough to meet expectations — building services firms will also face pressure to differentiate and enhance their service offerings, or risk becoming obsolete.
Building Optimization technology advances include a broad range of wired and wireless sensors for broader, faster and more accurate data collection. They also include software applications to consolidate, analyze and report on building performance down to individual pieces of equipment to quickly identify equipment faults and to provide remote teams with the latest information.The solution lies in building optimization — a data-driven approach to building performance management that encompasses technology, people and processes.
Building services providers need to adapt to this changing environment, but are they? We commissioned independent analyst firm Verdantix to research the current state of building optimization technology adoption in the building services sector in North America.