The stakeholders and benefits of a smart building

To best understand the benefits of smart buildings, we need to first understand who the stakeholders are since the benefits vary greatly for each:

• Owners and Financial Communities: Building owners can range from a single individual, a partnership or small group of owners, an owner-occupied company, and commercial real estate companies, to banks, investment funds, and Real Estate Investment Funds (REITs). Their common interest is to generate income, increase the value of their asset(s), lower operations costs, gain access to real-time and historic dashboard information, and leverage special energy and tax advantages many countries offer them.
• Operators of Commercial Real Estate: In some cases, the building owner will also operate the building on a day-to-day basis; however, in most cases, owners will outsource that responsibility to companies that specialize in this area, such as commercial real estate companies or property/building management companies. Their focus is on safety, operations, efficiency, cost controls, leasing, quicker response times, accuracy, monitoring and managing building systems, and customer satisfaction.
• Occupants/Tenants/Visitors: These are residents in an apartment complex, employees of the owner-occupied company, lease tenants and visitors in a commercial office building, medical staff and patients at a hospital, attendees in a place of worship, or teachers and students in a school. Their common interest is safety, security, comfort, information, direct controls, and their overall QoE.
• Suppliers/OEMs/System Integrators: This group includes organizations that contribute or support any of the other stakeholders – Original Equipment Manufacturers (OEMs), system integrators, cleaning crews, maintenance crews, and numerous others. They are interested in improving the efficiency of delivering their products and services while expanding their offerings and revenues.

Figure 1.2 – Smart building stakeholders

• Local Community/Citizens: This group includes the people that may pass by or look at the building, neighboring buildings, and citizens of the community that benefit from the service(s) the buildings provide (that is, jobs, tax revenues, space, and access). Beyond the use purpose of the building (that is, school, office, hospital, hotel, etc.), these smart buildings can give back extra energy to the grid, reduce the carbon footprint, provide information, and contribute to the overall smart city objectives.
• Government: All levels of government, whether it be local, state, or national, are smart building stakeholders. Beyond the similarities to the citizens’ benefits, the various government levels want to achieve energy-grid-give-back, green and sustainable buildings, carbon footprint reductions, and the added tax revenues smart buildings bring. Since the government owns and operates many buildings itself, it will achieve operational, energy efficiency, and performance improvements similar to the owners outlined earlier.

Smart buildings operate on a scale; therefore, some buildings will have just a few sensors while others will have many. Building size will also vary, as will the type of building and its purpose. Regardless of size, smart buildings provide digital data about the building itself and the activities within it. The following areas are overarching benefits regardless of building type.

Safety and security

Making sure your building occupants are safe and secure is one of the most important aspects of providing a smart building. Smart building technology can help manage numerous safety-related aspects of facility operations, for instance, remote monitoring of emergency lighting, remote access control, and smart fire prevention systems. In a post-pandemic world, safety starts with IoT sensors everywhere to keep people moving and in a touch-free environment with door access and visitor registration.

Occupancy sensors and wayfinding sensors can assist with safe distancing. IoT within smart buildings supports the functionality of security cameras and fire and alarm systems. IoT air sensors measure, monitor, and control indoor air quality requirements. HVAC automation and controls ensure an automatic supply of fresh air when carbon dioxide levels exceed acceptable limits. Indoor positioning and asset tags help to manage and secure assets. Public safety officials have access to digital information for the building and a reliable communication system that will assist in digitally locating individuals in the case of an emergency.

Cost reduction

Building owners and operators are continuously looking for ways to reduce costs and fend off rising costs to improve the bottom line. The use of IoT sensors in smart buildings greatly contributes to simplifying or eliminating tasks and automating others to lower costs.

Take the case of a tenant in a non-smart building wishing to have the temperature changed in their office suite. They would call the maintenance department, who would open a ticket, and a building engineer would be deployed to the suite to manually change the temperature. This could take 45 minutes or more. With IoT sensors in smart thermostats coupled with a tenant smartphone app, this could be handled directly by the tenant in under 30 seconds.

Energy costs are the most expensive line item after personnel/staff expenses. Smart buildings make it possible to achieve greater savings while simultaneously enhancing occupants’ comfort. Energy management and HVAC systems typically are the largest benefactors of smart building IoT, seeing cost reductions anywhere from 10% to 35%.

Smart buildings use information and communication technologies to connect building operating systems together, allowing managers to optimize operations. They also provide greater visibility and control around energy usage and consumption. Facility controls and building operations can all be monitored, controlled, and optimized remotely with the use of IoT. Building management systems, HVAC systems, and all other building systems can benefit from smart building automation and optimization using IoT devices. Predictive and preventative maintenance, inspections, and compliance are cost reduced with the use of IoT. Smart lighting systems and occupancy sensors can lower the cost of electricity. IoT also makes potential problems and issues easier to identify, diagnose, and manage.

Revenue generation and increased asset value

Maintaining and improving lease occupancy rates is one of the highest priorities for building owners and operators. Using smart building IoT solutions helps to differentiate the building from others to help attract and retain tenants and to increase the value of the building asset. New tenant amenity service offerings provide opportunities to charge tenants more. Sustainability initiatives increase the building’s value while reducing its carbon footprint.

MIT Center for Real Estate and Real Estate Investment Lab published a pre-pandemic journal article reporting that smart buildings were getting a 37% premium in rent and that their transaction rate went up by 44%. Most companies focused on delivering smart HVAC and energy systems claim reductions from 15% to 40% in energy use and costs.

Improved quality of experience

Often tenants list a comfortable work environment as one of the top criteria for their office. People want to be able to control the airflow around their seating area and the color, tint, and direction of their lighting.

Smart buildings and IoT can greatly improve the occupant’s satisfaction with the building. Providing more information, such as real-time IAQ results, wayfinding information, and digitally broadcast information, is high on occupants’ want lists. A long list of amenities improved by IoT includes direct access to parking, workout facilities, cafeterias, marketplaces, and other location information and scheduling.

Enterprises and companies located in smart buildings can benefit from asset location and tracking, navigation, wayfinding, real-time occupancy, workforce applications, and the analytical data that can be sourced from each of these. Improved efficiencies, healthy workspaces, and cleaner air can increase productivity and reduce sick days.