Page 54 - RC21 EDGE Summer Issue

Intelligent Buildings
THE COMING PARADIGM SHIFT FOR SMART, CONNECTED BUILDINGS
JOSEPH AAMIDOR
Managing Director Aamidor Consulting
DEPENDING ON WHOM YOU ASK, 2020 will either be among the most unforgettable years or the easiest to move on from. It also has impacted commercial buildings more directly than past crises. Some could argue that, even with an end in sight to the pandemic, there’s uncertainty ahead for many commercial buildings.
We believe 2020 will be viewed as a clear inflection point for real estate and smart building adoption more specifically. One change may be in how we use buildings, which may then change how we value them. There already have been
a number of pandemic-induced changes, and we don’t
know how permanent, or temporary, they might be: offices are empty, warehouses are in high demand and indirectly capturing customers that previously visited retail spaces; restaurants can function without prime real estate or foot traffic, and homes have replaced a range of retail, restaurant and service locations. Does everything snap back? Or does a new paradigm in the built environment await us?
We believe that technology will play a bigger role than ever in buildings. The fact that “negative pressure room” and “touchless elevator” are now being discussed openly in mainstream media outlets is a win for the
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industry. Building owners and operators that had made investments in PropTech before the pandemic were able to quickly adopt new solutions in rapid response
to COVID. Those who didn’t make investments quickly have a catalyzing event to catch up. And, society has an increased awareness of what a healthy building entails, which should act as a tailwind to drive adoption. In this article, rather than making predictions, we instead are highlighting some of the big ideas and trends that our firm is watching.
Balancing reduced occupancy (and revenue)
with demands to upgrade spaces
In a number of major metros, office vacancy rates are unusually high. San Francisco, as of early February 2021, had a 17.8 percent vacancy rate, which is a 16-year high. In New York, the story is the same, with a vacancy rate of 15.1 percent at the end of 2020, the highest since 1989. At the same time, many companies are expanding their footprints to new locations which foreshadows a more distributed workforce that may not return to where it was previously located. There has been some speculation of this trend since mid-2020, when many big city residents began to move to lower cost of living locations. Facebook has expanded its footprint in New York while also planning on hubs in Denver, Atlanta and Dallas. Amazon has identified six new hubs outside of Seattle (this is in addition to
HQ2 in the DC area). It’s not only technology firms;