Ever changing working styles and requirements, underutilization of space and the increasing need to align corporate real estate with the demands of the business have placed added pressure on organizations. They must create workspaces that are agile, drive productivity and enhance employee experience, while at the same time reduce the cost of occupancy. These pressures have been exacerbated by the economic and operational impact of the COVID-19 pandemic.
In the face of these challenges, the corporate real estate role has both changed and expanded. As a corporate real estate professional, you’re not only expected to add strategic value, but are now also on the forefront of initiatives to improve sustainability and the movement to create a workplace that encourages productivity and employee wellbeing. To do this effectively, you must rely on accurate data.
Today, we have more access to data than we’ve ever had before. More importantly, we also have the technology to dive deeper into that data and uncover insights that help us make smarter strategic decisions. Data insights can inform, guide and validate the strategy and approach you take to maximizing your organization’s real estate portfolio. It can help you make difficult decisions during times of growth and contraction by revealing trends. For example, when analyzed alongside financial data and within the context of your broader portfolio, sensor data on utilization can lead to more informed decisions such as whether to lease vs. buy, consolidate space to cut costs or refurbish a space versus moving to a new one.
Sensor technology has changed our understanding of the real estate portfolio and how it’s utilized. For decades, this was done with spreadsheets and manual entry. Today, sensors collect vast amounts of data. At the same time, the Internet of Things (IoT) has catapulted our ability to capture data on building performance with sensors that gather information on temperature, humidity, air quality and electricity, to name a few.
Maximizing Sensor Data
Sensors have become ubiquitous, but simply installing them won’t allow you to reap the full benefits of your investment. Installing a sensor is only a ticket to walk through the door. The real value of sensors comes from analyzing real-time data to gain insights. With sensor data, you’ll make discoveries that will help you make evidence-based decisions that align with your organization’s broader, more strategic goals.
Without a way to dive deeper into the data, the information sensor collect is nearly useless. Many organizations are maximizing the benefits of sensors by using them in tandem with an Integrated Workplace Management System (IWMS). By viewing sensor data alongside other real estate specific data, such as finance or leases, they can react more quickly to issues, perform comparisons and analyze data in real-time — all on a single platform.
Sensors can detect a wide range of stimuli from minute-by-minute changes in power consumption to ambient temperature and movement of people in a room. The more closely you study a building, the better you can understand and react to its changing needs and the needs of the people occupying it. Today, capturing and analyzing sensor data is helping organizations:
Improve space utilization. It’s a known fact that, on average, office workspace density is between 40 and 60 percent. If we look on the low end of this spectrum, this means that at any given time, most businesses are utilizing less than half of their space. With sensors to capture occupancy data, such as where people are congregating, movement into and out of an area, how long someone sits at a desk and how many people enter or exit a room, you can discover ways to improve space utilization. This data can also help lower costs and reduce your organization’s carbon footprint.
Consider this example: perhaps your business occupies multiple floors of a building and sensor data shows that consistently on Fridays, the number of people working on those floors decreases by half. With this information, you could consider closing down some of those floors on Fridays or allowing employees to work remotely. Not only would this reduce maintenance costs and the need for cleaning, it would also reduce electricity usage and consumption which in turn, will impact your organization’s sustainability goals. Imagine what you could achieve if you applied this across your global portfolio?
Reduce global real estate costs. Take the example above a step further. By looking at data on how space is being utilized alongside financial data across the portfolio, you can discover ways to reduce global real estate costs when you need to scale down, such as in times of contraction, or expand during times of growth. Taking a broad look at space utilization and financial data can help you understand which leases have the highest exposure on financial statements and evaluate the business units occupying them, how densely those spaces are populated and how they’re being utilized.
At the end of the day, real estate is a function of balancing supply and demand. On the demand side is the space your business needs and the supply is the amount of buildings that you either own or lease. From a finance perspective, it’s all about optimizing your real estate portfolio given the amount of liabilities you have leased and the assets you hold. The more efficient you are with your space, the less of an adverse impact it has on your company’s balance sheet.
Consider this example: Through analyzing sensor data you discover a building in your portfolio is consistently underutilized. Exploring that data in the context of financial data, you also know that your organization signed a 10-year lease last year. You know that your organization needs to do something different with that space. Looking across the portfolio, you may have an option to move people from other business units into that building and consolidate other buildings nearby that may be nearing their lease expiration. Or, perhaps you work with the finance team to determine if subleasing that space would make sense. There may be an opportunity to terminate a lease early which could involve a short-term penalty but also result in a long-term gain.
Improve the employee experience. Attracting talent and retaining employees today requires a workplace that is dynamic, engaging and fosters productivity. This goes beyond providing a desk and the supplies a person needs to do their job to considering an employee’s well-being and what you can do to improve their overall workplace experience. The shift toward an increasingly mobile and flexible workforce is also transforming the way people experience the workplace and forcing organizations to rethink how they optimize space.
Consider this example: Flexible workspaces mean a larger number of employees are now sharing desks, rooms and activity-based working areas. The rigid and conservative workspaces of the past can’t foster this way of working and won’t create the kind of stimulating experience that will help attract and retain talent. While these agile spaces can build a strong and happy culture, they require careful planning and smarter space management. Consider moving toward activity-based workspaces. Create a collaborative zone in a colorful environment that encourages creativity and accommodates multiple employees. On the other hand, quiet zones create space for those who need to concentrate on specific tasks such as focused work.
Layering sensor data into an IWMS can help you improve the way you manage occupancy, space allocation, floor plans and changes, and optimize the sharing ratios between assigned and shared spaces or desks. With a more accurate view of your entire portfolio, a site, or even a single floor, you’ll have the information you need to make better decisions about workplace layouts, quickly budget project costs, model move scenarios and measure the impact on your financial forecasts.
Meet sustainability goals. Climate change has become one of the most pressing political issues of our time. As legislation puts pressure on organizations to strive for plans to become carbon-neutral, IoT sensors and smart technologies can be used to help reduce energy usage through automated lighting control, improved building maintenance and cost analyses.
Consider these examples: Connecting energy consuming services, such as lighting and HVAC, to an access control system, can allow you to set a building to an ‘empty state’ and automatically power down lights and non-essential appliances when the last person ‘badges out’ or leaves. Occupancy sensors that control lighting can save energy by up to 30 percent.
Sensors connected to motorized window rollers so the window shading is automatically adjusted throughout the day based on the level of sunlight are another example. This improves the occupant experience and also helps reduce the use of air conditioning. HVAC systems account for 39 percent of the energy used in commercial buildings in the U.S. Sensors also can inform HVAC systems to reduce their level of operation when a building or zone is unoccupied and as a result, lower energy costs.
When connected to sensors, smart meters and other environmental control technologies, an IWMS can be used to monitor and provide a more granular view of energy usage across your portfolio. If a building is consuming and emitting more than others, you can use an IWMS to help analyze the cause of inefficiency and calculate the cost of taking certain actions to reduce the emissions.
This can also assist in conducting accurate cost-benefit analyses to identify where the greatest costs lie and inform new strategies, greenlight projects and measure success. IWMS and sensor users can continuously track and connect space utilization to energy consumption in real time. They also provide long-term visibility and a way to measure savings and the efficacy of energy-efficiency decisions. Using IWMS, sustainability practices can be monitored during the entire building lifecycle with the system drawing on data from every module to provide enhanced benchmarking and analysis.
Don’t downplay an investment in sensor technology by failing to analyze it for insights. It can make a dramatic difference in maximizing space, reducing operating cost, enhancing workforce efficiency and optimizing financial performance across your real estate portfolio.