Why A Building's Data Is A Missed Opportunity Without A Digital Strategy

A modern commercial building is loaded with sensors that continuously collect data related to energy use, occupancy, air quality and more. 

And yet, despite commercial real estate spending billions on Internet of Things tools, how easily can building operators make use of all this collected data to maximize tenant engagement or identify underperforming assets?

The answer in many cases: Not very.

This data can significantly influence an office or multifamily property’s net operating income, yet most building operators don't have ready or reliable access to key performance indicators generated by sensors or systems, said Bill Douglas, CEO of OpticWise, a CRE building intelligence services provider.

“People don’t realize that their buildings are talking to them,” Douglas said. “They’re not able to hear it because they lack an intentional digital infrastructure strategy.” 

Building owners or operators often work with multiple proptech and system vendors, each collecting and storing its data separately. These data silos make it difficult for building management to connect the dots and spot trends that need to be addressed, he said.

CRE is an outlier among major business sectors when it comes to data management, said Douglas, an engineer, entrepreneur and transformation architect who has worked in several industries. 

“This is the first industry I've seen that didn't seem to mind vendors owning their digital infrastructure — essentially, owning something inside of their own business — and that also didn't care where the data went,” he said. “I was honestly appalled. Can you imagine Amazon, FedEx or the owner of a hospital network not having control of their own data?”

Douglas said the fragmentation and inaccessibility of important data mean many commercial building owners lack sufficient information to make meaningful decisions about their three major cost drivers: insurance, occupancy and utilities.

“Digital is an asset that should generate income for your property and not an expense on the P&L,” he said. “If it is not generating income, then it should be fixed.”

It's Your Data, So Act Like It

OpticWise helps clients answer two important questions about their digital infrastructure: Who controls their building's digital architecture, and where or how can its data be accessed?

“Imagine what a building owner could do if they had full control of both of those,” Douglas said. “When we tell clients we can help them collect and analyze all the data, their eyes get big.”

The goal is to help clients attain “peak property performance” through a proprietary audit process that Douglas said is designed to “turn complexity into clarity in four weeks or less.” The PPP audit begins with OpticWise gathering input from existing proptech vendors, network diagrams, system contracts and tenant experience data.

OpticWise then maps the building’s digital infrastructure, analyzes data flow and benchmarks the property. Finally, it presents an action plan to the client.

“The owner walks away with a strategic road map to optimize their infrastructure, reduce friction and activate asset intelligence,” Douglas said. “Buildings have the means to get more efficient, driving expenses down and revenues up, and it all starts with a digital strategy.”

Douglas said OpticWise isn't pointing fingers, as a lot of proptech products do exactly what they are designed to do. However, the data they generate doesn’t easily sync with other vendors’ software, meaning a building can be left operating in the dark.

“We help owners move from scattered, vendor-controlled systems to a unified, owner-operated digital core, starting with connectivity and extending through every operational layer,” he said. “This is about building a digital-first organization to become a real estate champion in a digital age.”

They Wrote The Book On It

OpticWise developed a trademarked “5C methodology” to help property owners take advantage of the full potential of their digital infrastructure. It is described in detail in a new book that Douglas and OpticWise founder Drew Hall co-wrote called Peak Property Performance: Game-Changing AI and Digital Strategies for Commercial Real Estate.

The 5C approach calls on building operators to clarify, connect, collect, coordinate and control their data.

“You can’t optimize what you don’t control, and digital and data are where NOI growth and long-term value live,” Douglas said.

One of the dozens of case studies described in Peak Property Performance concerns a large multifamily complex. An audit revealed fragmented systems, a lack of infrastructure control and missed opportunities to improve the tenant experience, leverage data and better manage costs.

As a result of steps OpticWise helped the client implement, management gained full visibility into the property’s operating KPIs, and the tenant experience improved. The complex generated additional net operating income of $930 per unit while reducing initial capital expenditures by more than $800 per unit.

“These results were transformational, not hypothetical,” Douglas said. “They were the result of executing a structured, phased approach, starting with the PPP audit and then rolling out each of the five C's. That’s the difference between adding gadgets and driving real building performance.”

Douglas said it is time more buildings took control of their data. Until they do, he warned, they will continue to miss NOI-boosting opportunities that might exist in overlooked corners of their properties.

An office or apartment complex’s parking deck is a simple example: Is the building using dynamic pricing when a nearby stadium or concert venue attracts crowds of visitors to the neighborhood?

“Why are you still charging people $10 to park in your underused garage when there's an event down the street and you could be charging $15 or $20?” he said. “Owning your digital infrastructure and all its data is about building a system that works for you, not against you.” 

This article was produced in collaboration between OpticWise and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.