The contemporary commercial real estate industry (CRE) is a highly complex ecosystem of stakeholders, technologies and assets, which must address a wide range of desirable outcomes to an increasingly exacting standard. Not only is this a highly competitive market, which demands innovative strategies to maximize profitability, it is also under the purview of ever more stringent regulations – especially, but not only, sustainability standards. Throw in the reassessment forced on today’s world due to the COVID-19 pandemic, and it is obvious why the CRE industry is more proactively looking for solutions that enhance resilience and future-readiness.

Fortunately, emerging digital technologies are making it possible for building owners and facility managers to centralize control and exercise targeted real-time management like never before, and decision makers in the industry are enthusiastically adopting this new tech-empowered model. In the ‘Global Corporate Survey 2019: Smart Building Technology Budgets, Priorities & Preferences’, 31 percent of respondents expect their FM software budget to increase by at least 5 percent. Of those surveyed, 28 percent identified occupant experiences as their foremost objective, 26 percent said their primary focus was minimizing business risk, and 16 percent were prioritizing reduced operating costs.

While, superficially, these areas of focus may seem disparate, they are not mutually exclusive. The only business model that can feasibly navigate the challenges CRE businesses are likely to face in the post COVID-19 future is one that concurrently addresses all these concerns. By broad consensus, the industry is backing centralized digital command and control, in conjunction with strategic clarity as well as a mutually complementary ecosystem of workforces, physical assets and business processes, as the next step in its evolution.

A next-gen approach to FM

What strategic imperatives does this new tech-enabled model address, and how will it deliver qualitatively better results than the models it replaces? The 2020 State of CRE Operations 3.0 report asked industry leaders from multiple global markets about their reasons for adopting a data-driven and digital technology enabled approach. The report found that CRE businesses anticipate at least 20 percent savings, by combining predictive analysis with automated resolution. Seventy-seven percent of the CRE developers queried identified creating” experiential spaces with impressive uptime of facilities” as the strategy driving their budget allocations. Perhaps the starkest metric in the report was that data-driven operations in CRE reduced the time taken to identify and resolve issues to one-third of the current duration.

The consistent big-picture takeaways that emerge across the cited reports show a CRE business banking on technology to pursue the strategic aggregation of process and asset efficiencies into portfolio-wide optimization. Given the new normal likely to come into being in the post-COVID-19 world, these trends will only be further reinforced. The conjunction of strategies and solutions, which building portfolio owners and FMs must address to extract maximal value from their operations, include:

  • Portfolio-scale integration: Optimizing a CRE business model is all about aggregated efficiencies. Real-time BAS integration, using centralized software platforms that monitor processes and automation while enabling data-driven control, are the key to unlocking unprecedented value. Gaining granular transparency into, and real-time control over, their complex operations will help CRE businesses be far better prepared to respond to the limitations that are likely to become the norm in the post-pandemic economy.

  • Harnessing existing automation data: Modern buildings are embedded with an array of automation, which has traditionally operated in silos, isolated from each other due to vendor specific protocols. Such a model made any attempt at system scale optimization a pipedream. IoT makes it possible to collate data from all these assets and processes using centralized platforms, which can then dispense actionable insights using AI and Machine Learning derived insights, in real time. The resulting data-driven decision making was already a compelling argument in favor but given the consistency in outcomes a post-pandemic world will prefer, this operational model may emerge as the default industry standard.

  • Insight-empowered workforces: Despite the highly mechanized and automated nature of modern CRE portfolios, one of the most mission critical aspects of any such operation is its workforces. Easy and mobile access to real-time insights is one of the most empowering capabilities these teams can have, particularly when trying to operate in the smaller teams that social distancing guideline mandate, while continuing to generate the most optimal possible outcomes.

  • Predictive and responsive operations that enhance customer experiences: One of the most crucial advantages unlocked by emerging digital models that leverage cognitive technologies and real-time data collation is the ability to identify anomalies, monitor processes and anticipate possible sources of disruption. Comparing real-time metrics to historical data and customer preferences allows a CRE business to tweak its operations to customize outcomes to occupant preferences. These tech-enabled capabilities are a significant advantage for early adopters during the ongoing pandemic, allowing them to allocate resources sequentially to achieve optimal results.

  • Unprecedented sustainability through granular and targeted process optimization: Climate change has focused the world’s attention on lowering an organization’s carbon footprint. With buildings exceeding transportation in the carbon emissions stakes, attention has turned to ensuring that these assets can be made sustainable – so they are part of the solution, not the problem. From the increasingly stringent regulatory standards set around the world, to enlightened tenants who favor greener alternatives, the CRE industry has a lot of reasons to adopt more sustainable operations. Portfolio scale and real-time transparency into all assets and processes is the ultimate enabler of more sustainable building portfolios, based on which a CRE business can achieve its best possible resource and energy utilization profile.

The evolution from saving on operating costs, to proactively adding value

The new model of data-driven and digital technology enabled facilities O&M essentially poses the question, “what does optimal mean to you?”. In a true departure from the past, efficiency in operations is no longer about passive cohesion between various functional aspects of the business, with maximum output derived from each individual element. A new generation of cognitive technology and software-based solutions has dramatically broadened the scope of what is possible when it comes to optimizing CRE business models.

This tech-enabled model had already promised to deliver ideal outcomes for the entire spectrum of stakeholders involved – from building owners and FM teams, to tenants. Given the exacting new standards that facilities will need to adhere to in the post-COVID-19 world, the need for integrated and data-driven CRE operations may just have graduated from an optimal business model to one that is also the most resilient to unprecedented and unforeseeable disruptions.