Page 8 - RC19 RealcommEDGE 2019 Fall Issue

Intelligent Buildings

THE BUZZ ON ARTIFICIAL INTELLIGENCE

IN INTELLIGENT BUILDINGS

LOOKING BACK OVER the last ten years, technology more sophisticated. These platforms now allow for
hasn’t replaced CRE functions, but the way in which we benchmarking and visibility into cost trends and
do them has changed quite dramatically. Looking ahead opportunities across a portfolio.
to what’s coming in the next ten, we’re already seeing the
shift towards new innovative solutions leveraging artificial While the Internet of Things (IoT) already has the ability to
intelligence and machine learning to next-level tackle connect much of our building operations into a smarter,
another CRE need—how to make buildings smarter, safer more accessible network, we expect the future of intelli-
and more efficient. gent buildings to lean on IoT connectivity, sensors, and
other inputs informing aspects of artificial intelligence
Second only to MRO spend, the next highest expense (AI) such as machine learning, deep learning, and neu-
category at 20-30% of controllable spend is utilities, ral networks. But what do those terms really mean?
positioning facility and energy management as a very Sometimes they are just buzzwords used interchangeably
good place to leverage technology to lower costs, and the hype far exceeds the substance.
increase efficiency and enhance tenant comfort. In a
typical 500,000-square-foot building in Manhattan, MRO It won’t be that way for long as AI gains traction in
accounts for $1.5 million in annual spend, with utilities the business world, but there’s still room for caution.
close behind at $1 million. Investments in PropTech increased from $30 million in
2012 to $7 billion in 2018 and, in general, businesses that
With tremendous amounts of promise in the label themselves as an AI startup attract 15-50% more
Commercial Real Estate space, we expect the years in funding rounds than non-AI startups. But of 2,830
ahead to mark dramatic advances in facility and energy startups in Europe claiming to be AI, only 1,580 accurately
spend management. This evolution, already under reflect that description.
way, goes beyond the basics of automating utility bill
processing to extracting data from utility bills coupled In today’s computing environment, the concepts of AI
with near real-time demand data within a building. While can be somewhat esoteric so it’s important to define what
these services and technologies are already available, makes up AI:
it is the software platforms that have become much

6