Who Said You Need IoT to Make Your Buildings Smarter and Your Tenants Happier
The First Step is Using Your Data Better
The Commercial Real Estate sector is a slow adopter when it comes to Big Data and Artificial Intelligence technologies. With advanced machine learning applications disrupting almost every other industry, including the residential real estate sector, CRE organizations are still hesitant in fully implementing artificial intelligence in their daily operations, due partly to fear of getting into significant investments in infrastructure. But there lies the problem.
A common misconception in Commercial Real Estate today is that you need more and more sensors and IoT technology to make your buildings smarter, and thus your tenants happier. But this concept is misleading, for a simple reason:
The problem in commercial real estate today is not the lack of data, but the lack of ability to aggregate, combine and analyze the already existing huge amounts of data for smarter decision-making.
The numbers tell the story best
We know today that 90% of all data in organizations today was created during the last two years alone. That’s a lot of data to go around, but in the CRE industry, it seems this wealth of data doesn’t translate into smarter decision making: most institutions and CRE organizations today manage nearly $24 trillion in assets using disconnected systems and printed spreadsheets. In other words, there’s plenty of data to go around, but not the right technology to harness it in order to create real business value.
The competitive advantage AI provides the entire CRE ecosystem is unprecedented, and already in play
The profit margins are proving to be unprecedented in nearly every link in the value chain:
- In tenant satisfaction, AI algorithms leverage data on work order response times, time to completion, and recurring complaints, in order to assess service quality and improve customer retention rates.
- To help sustain financial stability, AI gathers data on tenants’ trending stock price or paying habits to predict their likelihood to renew their lease.
- In market research, AI identifies trends around property prices, growth in demand, retail openings or population patterns to enable smarter investments.
The aggregation of your existing data from multiple disconnected systems and organization of Big Data sets in such capacities around crucial measurable metrics, are possible today only thanks to machine learning algorithms. Identifying trends in Big Data sets in real-time to prevent issues, predict future trends and understand previously hidden pitfalls in your business not only reduces risks, but boosts operational efficiency and increases your returns across the entire CRE ecosystem.
So before leaping into a significant infrastructure investment, better first consider available applications of artificial intelligence that transform the way you leverage your data – today. To quote Rutherford D. Rogers’s famous words, “we’re drowning in information and starving for knowledge,” and so, in this AI and IoT chicken and egg dance, AI is definitely the first step.