What's wrong with commercial real estate?
So what are the factors holding the real estate industry back? In our opinion there are still a number of factors that need to change in this market before we will regularly see any major changes in technology in buildings. These include:
1. Traditional Design Methodology – The same old-school traditional techniques of non-integrated and unmonitored building systems still tends to be the norm when buildings are designed. As Albert Einstein pointed out, "The definition of insanity is doing the same thing over and over again and expecting different results." Why aren’t owners requiring building designers to install full metering and monitoring capability in all new buildings?
2. Old-School Building Management – Building management is still in the hands of an "old guard" of facility managers who are not yet comfortable with the concept of data transparency and visibility, let alone the "anytime, anywhere, any device" attitude of younger employees.
3. Building Complexity – Today, especially with the introduction of more complex renewable energy and environmental engineering systems, buildings are becoming so complex that they have outstripped the capabilities of any one individual to comprehend how all these systems connect together without the use of an integrated operations dashboard and full access to detailed system data.
4. Limited Liability – Currently, in most commercial buildings, architects, engineers and contractors are not actually required to have buildings perform beyond a one-year warranty period. Once past that first year, owners and managers are typically on their own, often with no idea (or record) as to how the building actually operates, how the systems talk to each other or how performance is measured. Think about it: if your iPhone doesn’t work, you don’t have to reverse engineer and delve into the source code to fix it – you just take it to the Apple store. By contrast, if your building doesn’t work, you have to figure out all the control sequences, physically inspect the equipment, and often call in the design engineer or controls contractor to diagnose and then fix things.
5. Limited Resources – All too often, owners have a short-term view of longer-term maintenance requirements. Many are unwilling to pay for engineers to stay connected with the building after the first year and adopt a “We’ll fix it when it breaks” mentality. Few have yet to embrace the need for continual commissioning as a basic requirement of building ownership. Contrast this to the way most modern cars are sold and maintained. Even after hundreds of millions of dollars have been spent on research and development and with fabrication to the most exacting of standards, most car manufacturers insist on regular, periodical inspections to maintain warranty. Why does this not happen in real estate? It’s perplexing and even embarrassing considering the value of these assets.