The Smart Building Technology & Its Merits

Owners and Investors can gain up to 25x increased property value for OpEx reductions, adding quick and affordable differentiated building amenities that attract and retain tenants and help stage for sale. Plus, their building feature performance-optimized equipment, with lower TCA and TCO. A&E and Developers, whether in new build or renovation, smart building systems offer opportunities for reduced equipment (due to efficiency), minimal wiring (wireless communications) greater environmental design control. Asset Managers managing physical property assets can get a lot smarter, with data visualization on lowered expenses and high value per square, across the portfolio. Brokers benefit from attractive and differentiated smart properties which improve marketability, showing well, offering energy savings, engaging prospective tenants and facilitating speedy sales. Property Managers gain cross-portfolio monitoring and management (RMM) capabilities, down to the building, floor, zone and individual equipment performance level. Facility Managers get RMM, the ability to coordinate repairs, minimize emergency truck rolls, and deliver smarter service and maintenance based upon insights. Mechanical Services can deliver quicker installation and configuration, without programming or on involving controls specialists, staying competitive and in control. Tenant Executives & HR Professionals offer great places to work, in addition to energy savings, comfortable workspace, reduced absences and turnover, healthy and productive employees, and a stronger employment brand. Tenant Occupants get comfortable, healthy environments catered to their preferences, plus smart tools to control temperature and lighting right from their mobile phone.

EQUIPMENT SAVINGS (CapEx)

The total cost of acquisition (TCA) can be significantly reduced with an energy efficient and easily installed IoT based building automation solution. Building management systems are historically expensive and overbuilt, prohibiting adoption by the 85% of buildings that don’t have them in place. Though, newer BAS alternatives with low-cost sensors, no specialized programming, and quick/easy setup can reduce the cost and time to implement. Lower-cost Systems: Affordable sensors and wireless devices are making IoT-based BAS a cost-effective solution for commercial buildings of all sizes, at a fraction of traditional system costs. Reduce Installation and Controls Costs: The speed and ease of installation for wireless and intuitive BAS systems can be 80% lower than traditional systems, making for quick retrofits with minimal occupant disruption. Require Less HVAC Capacity and Equipment: A building automation system’s overall efficiency can also reduce the number and size of HVAC equipment (such as RTUs) required to meet demands, reducing capital expenditures when new HVAC equipment is needed. Extend the Life of Equipment: And a smart building automation system can add years to the lifecycle before needing to upgrade HVAC equipment, stretching your CapEx dollar even further. Lower IT Compute Costs: A cloud based system eliminates the need to buy dedicated servers or workstations and the related maintenance of physical IT compute and forced upgrades over time.

EQUIPMENT SERVICE SAVINGS (OpEx)

Utility and repair/maintenance expenses remain two largest operating expense categories for commercial buildings. An intelligent building automation system can start saving in ongoing operational expenses (OpEx) that make up the Total Cost of Ownership (TCO) for a building automation system. The O&M Best Practices Guide⁷ from the U.S. Department of Energy (DOE) outlines significant savings opportunities:

• Reduce maintenance costs up to 30%
• Replace parts only when actual performance degradation requires it, vs. a calendar schedule
• Eliminate 70% to 75% of equipment breakdowns
• Reduce equipment downtime 35% to 45%
• Remote monitoring also minimizes the need for expensive truck rolls to start diagnostics, which can run from hundreds to thousands of dollars, depending on facility and service provider.

It is also useful to consider that, according to the DOE, operations and predictive maintenance can realize the same benefits (energy savings) as equipment retrofits costing approximately 20x more.

INCREASING VALUE DRIVE NET OPERATING REVENUE

Smart Buildings attract and retain tenants. This helps to reduce vacancy and increase lease revenue. And, it can help you boost your lease cost per square foot. Together, these factors can start adding value to your property assets, in addition to the multiple capital and operational cost savings identified. [blockquote author="" pull="pullright"]11.8% Rental Values[/blockquote]Fill Vacancy: Vacancies are a double-edged sword, cutting into operating costs to maintain, while spending to market listings to prospective tenants – all without a revenue stream. A smart building can help attract and convert tenants to reduce vacancies. Increase Lease Value per Square Foot A smart building is a more attractive building. In addition to the energy savings and sustainability benefits, a connected building can yield higher rates per square foot – conservatively adding $.10/ per. Studies have indicated that high-performance buildings can increase the rental values as much as 11.8% for commercial buildings⁹. Smart LEED Buildings Increase Lease-Up Rates and Property Values In addition to financial incentives, LEED buildings have faster lease-up rate and retain higher property values Sustainable Buildings Support Corporate Values More businesses recognize green business is good business, and their values and corporate citizenship efforts are integral to their brand. A smart and sustainable building adds value for management, while also delivering financial benefits.

CREATING THE IDEAL OCCUPANT EXPERIENCE

Employee Empowerment & Personalization Employees increasingly seek workplace environments that cater to them. Deloitte’s “The Edge” in Amsterdam, hailed as the most connected and greenest building, attracts and serves employees with mobile apps to guide to the best parking spots and building areas to support their working style, requirements and preferences. You can even empower occupants with mobile apps to control temperatures and lighting in their own zones. Advanced BAS solutions can capture occupant feedback and deliver employee controls, environments and experiences that significantly affect comfort, productivity, health and overall satisfaction. Health & Wellness - Well Building vs. Sick Building Occupant health and wellness are paramount concerns for everyone involved in commercial environments. “Sick building syndrome” threatens the health of occupants can cause absenteeism; it can result from a host of contributors, including building materials, high concentrations of chemicals or machinery, presence of asbestos or radon, old carpet, dirty air ducts, or a poorly designed or inefficient HVAC system. Smart buildings can sense and manage many of these factors to assure a healthy environment for all occupants. Indoor Air Quality Indoor air quality is likely to be 2-5x worse than outdoor air quality. Given that most of us spend 90% of our time indoors, your building’s indoor air quality can significantly affect employee and customer health, comfort and productivity. Better air quality means employees take 30% fewer short-term leaves. Cognitive Ability Improved indoor air quality can also boost employee productivity up to 8% in your facility, and can improve cognitive functioning by 61%. The healthy Buildings program at the Harvard T.H. Chan School of Public Health has conducted the COGfx study has quantified and confirmed the negative effects of poor indoor air quality – namely high CO2 and VOC levels – on human cognitive abilities. Comfort & Productivity Smart buildings can sense and proactively manage the environments for key factors in employee comfort and productivity: Thermal Comfort | Air Quality | Lighting | Sound ROI A 1-3 YEAR ENERGY PAYBACK IS JUST THE START You can use the simple payback formula, as long as you have your current average utility payment per period and a quote for the estimated energy savings your building will achieve with the retrofit. P = Vi / S (P = payback period Vi = initial value of investment S = estimated annual savings) These numbers can also help you calculate net present value (NPV), internal rate of return (IRR) and the impact on your net operating income (NOI). Energy savings free up additional investable dollars for other building improvement or tenant improvement projects.

OPEX REDUCTIONS HAVE MULTIPLIER EFFECT ON ASSET VALUE

Property investors can recognize asset valuation increases of up to 25x for operational expense reductions, assuming a 4% capital rate.

FASTER PAYBACK THAN LED LIGHTING PLUS MORE EFFICIENT LIGHTING

In recent years, LED Lighting retrofits have been a popular approach to reduce energy demand at the fixture level. However, smart HVAC solutions can offer even higher efficiency and ROI compared to LED. Consider that the typical payback period on relamping is about six years, whereas the typical payback period on a smart HVAC system upgrade is about three years. And, a smart lighting controls solution can take your LED lighting savings even further, with calendar scheduling combined sensors for light-level and occupancy to use lighting only when needed, and dimming capabilities. Smart Building systems can seamlessly integrate controls of both HVAC and lighting, in a single-pane-of-glass user interface.