As Internet-enabled devices become part of new construction and renovations, are property owners getting the most from their investments?
“Alexa, how can I get the most from my building’s smart technology?”
As mass-market digital assistants like Alexa and the Nest family of smart-home products become household staples, even more specialized property digital management tools are helping commercial developers get the most out of IoT for their properties. By 2021, some 25 billion smart devices will be connected to the Internet (known commonly as the “Internet of things,” or IoT), according to research firm Gartner.1
New real estate developments are built enabled with smart technology, and developers retrofit existing buildings with new smart features. But to truly get “smart” with your properties’ technology and reap their savings and efficiency potential, you need to make sure your property managers understand their capabilities.
Consider these five tips for ensuring returns.
1. Use real-time notifications to spot problems.
When a building is equipped with Internet-connected devices, they can provide alerts the moment an error occurs, so you can get ahead of the problem and avoid any further damage. This kind of responsiveness on repairs also builds goodwill with your tenants. Ensure that your property manager has alerts set up for all smart systems on-site and there are procedures in place for investigating alerts as they arise.2
2. Automate your heating and cooling systems.
HVAC systems account for more than 39 percent of the energy used in a typical building.3 Using smart technology to set temperatures can chip away at those costs. Smart controls use various sensors to monitor a building’s energy use, so you can be more strategic about how you use electricity. For instance, motion sensors might indicate some rooms are used infrequently and automatically adjust the temperature and lighting in those rooms accordingly. Many programs also track data over time and can suggest improved operating schedules. You can use this data to adjust future planning and budgeting to be as efficient (and profitable) as possible.3
3. Prioritize outdated areas to retrofit according to which ones will provide the biggest impact.
You can modify existing building systems for IoT compatibility. According to experts, electrical systems are the easiest systems to update, followed by water.4 In Chicago, for example, Commonwealth Edison (ComEd) has started a retrofit that will result in a total conversion to smart electric meters. The utility expects a 20% usage reduction through the program.5
4. Provide ongoing training for your property-management teams.
Instructing your property managers and employees on the basic principles of smart technology when systems are first implemented is the bare minimum. Most teams will require ongoing training, especially if multiple systems are involved.4
For example, if a property manager receives an alert about a water leak, they may think the smart technology automatically alerts building maintenance. Depending on the system, however, the manager may need to gather additional information and bring in a plumber.
And when there are new technology enhancements available, ensure that the property teams are aware of the capabilities and how to use them.
Create and share best practices for your team to guide their use of Internet-enabled technology—particularly if your building is just becoming “smart.”4
5. Educate your tenants—and offer them options.
Smart technology can save your tenants money and make their lives more convenient—but only if they know how to use it. For instance, some buildings may give residents a discount on energy during off-peak hours.5 Likewise, if a tenant knows they can save money by doing laundry early in the morning, that might be an added value for them, as well as for you.
Whether you’re managing new fully IoT–enabled properties or gradually retrofitting existing buildings to be more efficient, keeping these practices in mind can ensure that you maximize the returns on your investment. Before you know it, you’ll be asking Alexa how to reinvest those savings into more smart technology.
Talk with your M&T Relationship Manager, M&T Realty Capital Corporation loan officer, or M&T Insurance Specialist to learn more about how you can finance or protect a smart-building project. For equipment finance solutions, call the M&T Commercial Service Team at 1-800-724-2240. For real estate financing, call M&T Realty Capital Corporation at 1-800-737-2344. For risk management solutions, call the M&T Insurance Team at 1-800-716-8314.
1 Gartner Identifies Top 10 Strategic IoT Technologies and Trends. Gartner, November, 2018.
4 How the IoT is Changing the Landscape in Commercial Real Estate. ID Plans, November, 2018.
5 Smart Grid for a Smart Chicago. City of Chicago, February 2016.
This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.