The Buzz on Artificial Intelligence in Intelligent Buildings
Looking back over the last ten years, technology hasn’t replaced CRE functions, but the way in which we do them has changed quite dramatically. Looking ahead to what’s coming in the next ten, we’re already seeing the shift towards new innovative solutions leveraging artificial intelligence and machine learning to next-level tackle another CRE need – how to make buildings smarter, safer and more efficient.
Second only to MRO spend, the next highest expense category at 20-30% of controllable spend is utilities, positioning facility and energy management as a very good place to leverage technology to lower costs, increase efficiency and enhance tenant comfort. In a typical 500,000-square-foot building in Manhattan, MRO accounts for $1.5 million in annual spend, with utilities close behind at $1 million.
With tremendous amounts of promise in the Commercial Real Estate space, we expect the years ahead to mark dramatic advances in facility and energy spend management. This evolution, already under way, goes beyond the basics of automating utility bill processing to extracting data from utility bills coupled with near real-time demand data within a building. While these services and technologies are already available, it is the software platforms that have become much more sophisticated. These platforms now allow for benchmarking and visibility into cost trends and opportunities across a portfolio.
While the Internet of Things (IoT) already has the ability to connect much of our building operations into a smarter, more accessible network, we expect the future of intelligent buildings to lean on IoT connectivity, sensors, and other inputs informing aspects of artificial intelligence (AI) such as machine learning, deep learning, and neural networks. But what do those terms really mean? Sometimes they are just buzzwords used interchangeably and the hype far exceeds the substance.
It won’t be that way for long as AI gains traction in the business world, but there’s still room for caution. Investments in PropTech increased from $30 million in 2012 to $7 billion in 2018 and, in general, businesses that label themselves as an AI startup attract 15-50% more in funding rounds than non-AI startups. But of 2,830 startups in Europe claiming to be AI, only 1,580 accurately reflect that description.
- AI – any technique that enables computers to mimic human intelligence to learn from experience
- Machine Learning – a subset of AI that includes statistical techniques to enable a computer to perform a specific task more effectively as more data is received
- Deep Learning – a subset of machine learning generally based on neural networks capable of learning from data that is unstructured or unlabeled
- Neural Networks – informs deep learning by providing a layered approach to processing information and making decisions
At the heart of it, these solutions still rely on inputs and outputs and companies can make sense of it by looking at a hierarchy of needs, as Hacker Noon shares. So you start with the questions: What are you trying to solve? Is it reducing operational expense, increasing tenant comfort, improving building efficiency or all the above? If so, what are the inputs that impact these objectives? And how can I vary the inputs to get a desired output?
The roadmap to truly leverage AI in building system solutions can bridge that gap between pre-determined inputs and outputs toward true artificial thinking and even autonomous building management. Neural networks will take in specific data points like load, HVAC settings, external factors, financial data and energy sources. Then, through a set of hidden layers of decision-making that is based on a system that can learn without any task specific rules, the output layer would manage both comfort and cost. Imagine the future of building systems that can monitor and interpret weather, account for seasonal changes, understand how cloud cover might impact radiant heat, calculate temperature based on how many employees showed up in the office that day, and more – without any finite, specific inputs from a human source.
Don’t mistake the trend, AI in buildings will not replace human intelligence any time soon – it will just help humans do their jobs better while software does the hard work. For the foreseeable future, platforms leveraging AI may help manage specific decisions, but property managers and engineers will keep ultimate control. It also frees them up to spend more time managing tenant satisfaction and running other building operations.
If the last couple years of the innovation boom is any indication, it’s the path we’re heading towards. But what does this mean for your bottom line today? Until the capital costs for some of these solutions come down, it’s tough to get adoption. So, we recommend keeping an eye on the technology of the future, but focus now on opportunities for leveraging today’s technology to manage your portfolios more efficiently while mitigating risk and increasing asset values. Consider an incremental “crawl, walk, run” approach.
Wherever the trends take technology in the future, the benefits of an energy strategy today are real, and leaders will reap the benefits. The buzzwords are interesting, but you can start answering important questions such as the below that affect your operations without waiting for next generation technologies:
- How do I manage energy consumption more effectively?
- How do I increase my close rate while reducing costs?
- How do I streamline facility management?
Learn more about the latest energy management technology at Yardi.com/Pulse and increasing asset value through better facility management at Yardi.com/Elevate.
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Yardi® develops and supports industry-leading investment, property management and energy management software for all types and sizes of real estate companies. For the energy market, the Yardi Pulse® Suite helps manage costs, consumption and sustainability initiatives. Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.
UPCOMING REALCOMM WEBINARS
CORPORATE REAL ESTATE & Technology – The Importance of Developing a STRATEGY - 10/24/2019
The Corporate Real Estate industry has quickly gone from constantly resizing the corporate real estate portfolio based on the everchanging business needs of the corporation, to having to understand and deal with a myriad of issues relating to technology, automation and innovation. Not only do CRE professionals need to understand things such as IWMS, intelligent buildings, the smart workplace, AI, VR/AR and other emerging technologies, they also need to understand the fundamental shift on how we use space. Technology which is enabling mobility has shifted the landscape. This webinar will feature some of the most innovative professionals discussing the importance of developing a comprehensive Corporate Real Estate portfolio strategy around the concept of Digital Transformation.
Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.
Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company (www.nicenets.com) to directing the IT strategy of a real estate investment management firm to manufacturing and technology-enabled education. Chuck has also been the chair of the Realcomm Investment Management (IM) Advisory Council for the last ten years, managing content selection for the conference educational sessions, IM forums, workshops and webinars.
Emmanuel Daniel is responsible for building and delivering the Digital Transformation strategy for campuses across Microsoft and leads a global multidisciplinary team of architects and experience designers. He builds experiences that merge technology with the built environment, leading to the formation of spaces that respond to the needs of its users. He is also accountable for identifying, building and implementing the next generation of products that will make smarter and sustainable buildings.
Paul Maximuk is the Product Owner as well as a technical SME at Ford Land, leading all BMS and controls integrations globally. He has over 30 years of experience in the industry managing multiple types of energy systems and specializing in strategic smart building implementation and management. Paul’s expertise in the built environment spans real estate assets from large industrial facilities to Class A office buildings.
Ronna Davis has been in the networking and telecommunication industry for 23 years. She has been with CommScope for over 13 years and has held positions in sales, channel and product line management. She is currently on CommScope’s Strategy and Technology Team for Buildings and Campuses. Previous to CommScope she worked in the design and construction of telecommunications networks for eight years and in wholesale distribution for two years. She studied marketing and is a LEED Green Associate.
Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune 1000 technology companies. To-date he has enabled raising more than $30Million in start-up capital for multiple start-ups in silicon-valley. Ron has founded and led three companies to-date with successful exits. His latest venture is IoTium Inc. – a Silicon Valley start-up that provides a secure, cloud-managed, easy-to-deploy software defined network infrastructure for all IoT verticals.
Marc is a pioneer in leading the Intelligent/Smart Buildings and M2M movements pushing the industry forward and has contributed to transforming and changing the Intelligent Buildings and M2M (now IoT) industries. As Chief Marketing and Communications Officer for Lynxspring Marc leads corporate and product marketing, strategy, brand management, public relations and communications that support the company’s strategic and growth initiatives.
Brent Boekestein is the CEO of Vintra, Inc., a leading video analytics company from Silicon Valley that uses artificial intelligence to transform any video surveillance into actionable and tailored intelligence. Forward-thinking enterprises and public safety organizations like Sacramento City, NYC DOI, Sacramento County, and more use Vintra’s solutions to organize, analyze, and derive critical insights from overwhelming amounts of stored and live video.