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Benefits of loT and its impact on the commercial real estate and facility management

Posted By Velis | 29 March 2018 | Proptech

Nowadays technology has already changed the way we live, learn and work. Not only can new technology allow us to remain in contact with other people but also with the buildings. An interaction between human and buildings is possible in a smart way by means of using various types of sensors for example NFC and RFID tags as well as beacons. Internet of Things (IoT) applied to the buildings makes them smarter, improves their performance and enables them to anticipate needs of premises. A disruptive technology used in the CRE (Commercial Real Estate) redefined this industry and changed the fundamental truth about location. Proximity to both customers and employees as well as suppliers is still crucial, however, information-based technology, specifically the IoT, can add extra value to the CRE.

Are you curious about the benefits of the IoT and how big is its impact on the CRE? Do you know how the IoT is transforming the facility management? Read this article and find out more.

What is IoT?

IoT is the concept that physical objects, devices, vehicles, buildings or any other items are connected to the Internet. Being embedded in electronics, software, and sensors, these devices are able to collect, exchange and transfer data over a cloud-based network. Various devices or objects are represented digitally, consequently, they can be controlled from any place. With reference to the commercial buildings, the principal aim of the IoT implementations is to connect property owners, facility and property managers as well as tenants to have insight into the data which is generated from daily activities within the building. Thanks to the IoT there are many different possible interactions with the building improving management. The IoT technology not only is used in the CRE but also in the industrial real estate (logistic and production).

IoT expansion

The dynamic IoT expansion is undeniable. According to the Gartner’s research, it can be assumed that installed IoT sensors in commercial buildings will grow from 377.3 million in 2015 to over a billion in 2018. What is more, smart commercial buildings will be the biggest users of IoT technology through 2017. Whereas IHS forecasts that the IoT market will grow from an installed base of 15.4 billion devices in 2015 to 30.7 billion devices in 2020 and over 75 billion in 2025.

IoT installed base, global market (in billions)

Source: IHS, IoT Platforms: Enabling the Internet of Things, 2016

Impact and benefits of the IoT

Optimizing revenue and lowering maintenance costs are two main capabilities enabled by the IoT technologies. However, there are far more benefits of implementing the IoT into the CRE (shopping centers and office buildings). First and foremost to improve tenants’ satisfaction but also to reduce energy costs as well as streamline spatial management and building maintenance.

  • Increase Profitability

The IoT technology will have an impact on the building management systems (BMS) providing higher benefits. Smart buildings equipped with the sensors can reduce waste and optimize energy usage, thereby saving costs for owners. IoT solutions adjust heating and cooling system, offer security devices for guests management as well as monitor and provide management of parking spaces by directing employees to a specific space which is available at that time.

  • Space and workplace management

The IoT allows property managers and owners to understand the way of using the building by tenants thanks to people flow tracking technology. Property managers using such building performance data are able to address and predict tenants’ needs more precisely and effectively.

  • Receive information in real time

The IoT technology can be used for both planned and preventive maintenance which allows receiving real-time information as soon as the problem appears in the building. Any bigger or smaller failures such as a small leak can be discovered and rectified promptly thanks to special sensors detecting moisture.

  • Keep assets under control

The IoT enables to monitor, manage and maintain your assets. Hands-on interventions are less required, consequently, a decision-making process is faster. After waving the smartphone over a NFC compatible device you can get access to important data for example to the history of inspections or to some related documents of the NFC-enabled device. Thanks to that technology, managing all of your asset data is possible in a quick and easy way.

  • Give new opportunities for facility managers

A growing grid of sensors connected with each other and placed throughout a facility turn into valuable and useful information for the facility managers. Consequently, the facility managers can be everywhere and at any time. For example, the IoT technology provides communication with subcontractors and helps to understand how tenants use a facility. Using a web-based platform the facility managers can manage a number of properties in one place.

  • Assure security and productivity

Beacons, being considered as a component of the Internet of Things (IoT), are extremely useful for the facility management. These tiny - powered by small batteries - Bluetooth radio transmitters of data, via Bluetooth Low Energy (BLE) are used for both indoor and outside location. Sending a signal, inform smart devices about beacon’s ID number. A Bluetooth-equipped device like a smartphone can recognize a beacon. Once it is in its range, the beacon provides valuable information about the property. Beacons can track in real time both your assets and employees, contractors as well as visitors in the building. For example, beacons can help the facility managers to check whether the guard made a full circuit in the building. Thanks to beacons a facility manager knows when maintenance employees and cleaners work and what is their exact location. Thus, safety and productivity of your premises are improved.

Challenges and cost of the IoT sensors

  • Technological challenges

RFID technology is divided into three categories. IoT devices can be either passive, active or battery assisted passive (BAP) - having a small battery on board. The most common are passive tags which are the ones without a battery. The passive tags wait for a signal from the device, e.g. from a smartphone, releasing information to the cloud system. Whereas, an active tag has an on-board battery and transmits its ID signal at a given time. IoT solutions on a large scale can present a huge challenge due to the extended infrastructure of the IoT system. On the other hand, implementing of the IoT carries a lot of risks, for example, cyberattacks. To guarantee the proper level of security of IoT devices and infrastructure, there must be performed a risk analysis and implemented appropriate safeguards.

  • Falling costs

The average cost of IoT sensors is falling. As you can notice in the graph below, the average cost in 2020 is estimated to be 0,38$. By lowering the cost of RFID tags, the benefits of IoT solutions will be far more available for commercial and industrial real estate and any other businesses. Passive RFID tags are less expensive than active RFID (commonly named as beacons). NFC tag is a cost of few cents to few dollars, whereas the cost of RFID starts from several dozen cents to few dollars. Finally, beacons are expense from few to several dozen dollars for the most developed ones.

The average cost of ToT sensors is falling



The CRE industry is without a doubt a key sector where the IoT can be successfully implemented adding value to the property. Internet-connected sensors are becoming prevailing in the CRE sector. More and more employees and tenants expect modern technology in a workplace and space they lease to automate and improve their work. These days, building management is increasingly complex which results in the necessity of looking for more effective ways of managing properties by facility managers. Therefore, the IoT technology can be a solution. The IoT is a competitive advantage offering countless benefits, so why not to add value to your commercial and industrial investment property and implement information-based technology?

Kacper Troć
Velis Real Estate Tech



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We gather proptech specialists from different parts of the world in order to create a platform for thoughts exchange and sharing a knowledge. Velis Real Estate Tech brings together like-minded professionals in the field of technology in a commercial real estate. Our company creates technology for buildings which transforms the way you operate in them. Velis’ own solutions, provided for property and facility managers as well as owners and tenants, are based on the newest technology, including Internet of Things sensors.