Why smart companies look for smart office buildings

Real estate developers face the challenge of building the post-pandemic offices of the future, as it’s clear our relationship with work spaces is changing. This requires smart structures: buildings equipped with cutting-edge technology to harness the power of the elements. This creates the superior working conditions and energy efficiency that tenants demand. For investors, it’s a chance to boost the value of their assets for generations to come.

Microsoft CEO Satya Nadella is candid about the biggest shift to how we work in a generation. Google has been trying to redefine the office itself. Harvard Business Review has done the research, and the evidence is piling up: now that the world’s largest corporations are asking their employees to return to the office, it better be good. “The future of work that we thought was 10 years out,” Google’s architect-in-residence Michelle Kaufmann said last year in The New York Times, “Covid brought us to that future now.”

Once-in-a-lifetime

The pandemic has caused a seismic shift in the way we work. Office space tenants, especially the world’s largest and most innovative organizations, increasingly demand excellence. And with such abrupt change in demand, modern-day developers and investors have a once-in-a-lifetime opportunity to design and build truly future-proof office space.

The office building of the future is smart, dynamic and constantly updated—that much everyone agrees on. This is possible by what is called The Internet of Things: a vast network of sensors monitors conditions inside and outside the building. This trove of data makes it possible to manage the building's performance and energy demands. No longer are office buildings designed to keep the elements out: nature is woven into daily office life and natural resources are a source of energy, making buildings truly sustainable. 

Here’s an example of what that means. Let’s say window sensors record a temperature of 15°C outside; the sun is about to rise, and when it does it will gradually heat a 100 square feet office in the southeast corner of the building—where a 10-people meeting starts in 30 minutes. The building management software system crunches the data and starts up the heating ahead of the meeting to bring the room temperature to a comfortable 21 degrees—or whatever temperature users find comfortable.

Design and build

Much like train travel starts with laying down the rails, the planning of this vast network of sensors begins with a building’s design and build phases. The sensors that measure the outside conditions are the foundational infrastructure of the Internet of Things, so it all starts with measuring outside conditions — and utilizing them.

This network can be expanded with indoor sensors measuring metrics like occupancy, noise, light penetration, air quality, creating real-time intelligence about the building. The data is shown in real time through a ‘Digital Twin’— a computer-generated model that looks just like the building. Every parameter of the building becomes manageable automatically, in real time and for a wide range of purposes.

Not very smart

Surprisingly, most ‘smart’ buildings pretend the outside world doesn’t exist. They rely solely on sensors inside the building. But without outdoor data, a ‘smart’ office is just not very smart. The air conditioning could be running on full blast in one office while the sun scorches the next room. The elements outside the building are the most important factors to decide the interior of the building. In the book “Healthy Buildings”, Harvard professors Joseph Allen and John D. Macomber make the case that measuring building performance across parameters such as air quality, noise, thermal health, lighting and views, moisture, and ventilation is paramount.

The natural elements shouldn’t be kept at bay; they should be utilized. A truly smart building should use natural sources for heating, cooling, light, and fresh air. This enables superior energy efficiency, which is crucial if buildings are to follow the guidelines set by the Paris Agreement and building codes.

Energizing

Creating cutting-edge smart buildings is not only about compliance: hardly anyone needs convincing that new buildings need to be sustainable. We all know it intuitively: nature is vital to the well-being of office workers. Hana Bank, one of South Korea’s premier banks, recently decided office life should be energizing, not draining, so they began incorporating nature into their brand new headquarters. Rolling park-like floors connect the office floors, while fresh air is constantly circulated. In the US, Google is even building partially outdoor offices. while at Google headquarters building management software also makes sure only fresh outdoor air circulates. A building shouldn’t be a lifeless set of walls. It should be open and adapt to life outside its glass windows.

What does all this mean for investors? Smart buildings give owners, developers, and investors previously unimaginable insights about their building. Which rooms are most popular and which ones are used the least? Which floors use the most energy, and at what times? This continuous stream of data is fuel for smart decisions by building owners, real estate developers and investors. That one office on the fifth floor that currently has a reduced rent might turn out to be the most popular room in the building. That coffee shop in the lobby might turn out to serve ten times more customers than previously estimated. Building owners can also offer the data to tenants, creating a previously untapped recurring revenue stream.

Any investment is, by definition, built for the future. You allocate capital wisely now, and the returns will follow—sometimes for a lifetime. Investments require vision, planning, and calculating risk and reward. The same is true for office buildings: design and build them well now, and tenants will line up to fill the seats of desk chairs for decades to come. Designing and building the foundations of a smart building starts at the drawing table; its benefits last forever.