IoT in Commercial Real Estate: Use Cases and Solutions
To meet the dynamic needs of customers and businesses, the real estate industry is using cutting-edge technologies. The Internet of Things has proven to be an effective solution for property managers, tenants, and building owners. IoT solutions deliver business value, differentiate companies from their competitors, and offer new revenue streams
IoT and commercial real estate defined
Before we start talking about the relationship between the Internet of Things and commercial real estate, we need to explain these two concepts.
The Internet of Things, or IoT, refers to physical devices that connect to the internet and can identify themselves with other devices. Thus, they create a network of smart devices that can communicate with each other.
The goal of IoT is to provide fast communication and maximum automation of various processes. In this way, the Internet of Things helps people and organizations save time and money while reducing overall operating costs.
Commercial property is used solely for business or work purposes and includes all types of business centers, from the smallest thrift stores to the largest shopping malls.
Why use IoT in real estate?
The term “Internet of Things” was invented in 1999 by British technologist Kevin Ashton. In some industries, IoT technology has been adopted faster than in others, and in real estate the adoption has been relatively slow. However, over the past few years, some trends have intensified; it’s time to realize why.
The main driver of successful IoT implementation is the further development of machine learning and artificial intelligence (AI).
Development is key here, because it’s one thing to deploy a fleet of interconnected devices like smart thermostats and quite another to let the back end synthesize data, make decisions, and act — which is the role of AI.
There are two key reasons why we are moving to more widespread adoption and application of Internet of Things technologies:
- The proliferation of 5G will continue to increase the overall capacity of systems, allowing for more devices and wider adoption.
- Continuously improving security in IoT systems will enable more people and organizations to trust these systems in the future. However, much work remains in this area, which is partly the reason for the delay in adoption.
Ultimately, IoT is about connecting a large number of devices to the physical world, making the real estate industry an ideal candidate for this technology. Here are two ways the real estate industry is leveraging the power of the Internet of Things.
IoT trends for real estate applications
According to Statista, from 2015 to 2025, the number of connected devices installed worldwide will grow fivefold.
This is not surprising, since IoT technology can be expected wherever people live and work. Think, for example, of things like the emergence of smart home tech solutions. People are equipping their homes so they can control all their smart devices from their phones.
With IoT devices, people can turn lights on and off without even touching a switch or unlock the front door without a key. In general, this makes life simple not only for ordinary people but for commercial enterprises.
The real estate industry is taking advantage of most of the benefits of the Internet of Things. For example, real estate companies can now use different types of mobile real estate applications to see in real time who is trying to view the properties they’re selling, for instance. By integrating smart locks into applications, you can even open the door of a property if someone wants to see it. Likewise, the rental agency can get locked out when a potential tenant leaves, again via a handy phone app.
Benefits of IoT-based apps for the real estate market
Now that you know what the Internet of Things is, let’s take a closer look at why real estate companies continue to adopt IoT technology.
Companies are moving to the Internet of Things for a variety of reasons. In the case of real estate, these reasons include a desire to automate tasks for real estate agents and to streamline property management, selling, and buying.
If you’re in the B2C real estate business, another reason to start using Internet of Things technologies might be to be seen as a pioneer by potential customers. People are impressed by new and evolving technologies, and this is even more the case when they see that your company has adopted these technologies while others have not.
Here are the top reasons to consider developing an IoT application for your real estate business.
Improve productivity with IoT optimization
If you eliminate the possibility of human error, you reduce the likelihood that something will go wrong with your business.
Improve product and service quality
You will have a better chance of impressing potential clients with high-quality services provided through a real estate app.
Increase the reliability of operations
You can simplify the process of mapping properties to other areas of your business model.
Reduce product costs
You can reduce the cost of renting a property if you can use an app instead of a lodging agent. By streamlining the processes you depend on every day, you free up time for your employees which they can then devote to other areas of your business.
Increase customer satisfaction and engagement
By introducing IoT technology, you will be able to reach more customers faster. You will also get more positive feedback from customers. Having smart solutions to meet market needs will save you money and time but also demonstrate to your customers that you are at the forefront of technology. And all of this will increase your brand awareness.
Real estate challenges and how IoT technology may help
IoT applications help solve a number of problems facing real estate companies today.
Unexpected events such as the current pandemic jeopardize many industries. Real estate is no exception. Social distancing changed the way people interact with physical space, and the coronavirus outbreak has upended the traditional way of doing business in the real estate sector.
To respond to the current COVID-19 threat, real estate companies are implementing cutting-edge technologies, including IoT real estate technologies. IoT applications can help with tracking social distancing and masking compliance in real estate offices. IoT sensors can also monitor and report indoor air quality.
Lack of affordable housing
Another major problem for real estate is affordable housing. According to CNBC, the housing shortage in the United States is the most severe ever recorded. As tens of thousands of people under the age of 40 struggle with debt and rising healthcare costs, even reasonably priced real estate becomes less affordable for them.
With individual energy management, IoT technology enables real estate companies to reduce utility costs. As a result, companies can offer better prices to tenants and thus attract more customers.
Today, more and more real estate agencies are taking unconventional approaches, relying heavily on virtual visits and an active online presence to provide an enhanced home search experience. With IoT real estate apps, companies can engage potential customers by sending them interactive promotional messages that allow them to take virtual walkthroughs.
Moreover, through the know your customer approach, real estate managers and executives gain valuable insights into customer behavior. In addition, IoT real estate applications can provide potential clients with detailed information about properties, allowing them to formulate their inquiries without involving realtors.
The Internet of Things could be a game changer for regions with unstable climates and changing weather conditions. In today’s world, the frequency and severity of hurricanes, tornadoes, and floods has increased significantly, affecting the value of disaster preparedness and resilience.
Dedicated weather sensors that provide real-time monitoring can provide advanced warning of adverse weather events, allowing property managers and clients to better understand potential threats to properties.
Before the coronavirus crisis, the real estate industry was already rapidly digitizing. However, the outbreak of the pandemic pushed it even harder towards digital transformation.
According to McKinsey, the business world progressed five years in terms of digital adoption by consumers and businesses in just eight weeks after the start of the pandemic. As more companies adopt digital-centric products and services, customer expectations and demand for more sophisticated solutions are constantly growing.
The Internet of Things, as the leading innovation of 2020, offers real estate executives a range of opportunities to attract customers and increase sales. From smart homes to indoor IoT-based navigation, IoT offers a wide range of solutions for both private homes and commercial buildings.
IoT predictive monitoring
Everything from bridges to public transport is in dire need of modernization, according to APEX Commercial Group. And the quality of infrastructure plays an important role in property assessments. With health monitoring and predictive analytics, the Internet of Things can determine if a building, its components, or its utilities are in need of repairs or urgent upgrades.
Built-in IoT sensors can track inconsistencies and send alerts to tenants or property managers. With IoT sensors, potential buyers will be more confident in their purchases, knowing that their new homes are equipped with advanced technologies that can identify infrastructure deficiencies.
According to a Johnson Controls survey by the Deloitte Financial Services Construction Performance Group, 70 percent of respondents believe that the ability to predict and diagnose problems and propose solutions is a game-changer.
This year has completely changed the way most businesses operate. For many companies, customers have gone digital, and their employees work completely remote and are becoming very flexible. To improve the efficiency of their workflows, many real estate agencies have implemented analytical and high-tech initiatives.
Companies will invest up to $1.1 trillion in IoT by 2023. IoT real estate technologies offer cutting-edge solutions to meet growing challenges. With the help of the Internet of Things, managers can track employee performance, create custom workspaces, and automate redundant tasks.
Thanks to the ability of IoT systems to analyze huge amounts of information in real time, IoT smart building systems have found their way into the office environment, as they allow customization of workplaces to meet current needs and requirements. For example, an IoT building system can track employees’ locations and movements, determining where employees spend most of their time during the day.
As a result, the system can identify inefficiently used offices and premises that might be rented out. In addition, the Internet of Things can improve productivity by automating repetitive tasks such as swiping access cards, checking real-time conference room occupancy, and tracking assets.
To this end, Softengi has developed an intelligent door unlocking system that makes it easy to open doors by scanning four fingers with a mobile camera. By connecting the fingertip scanning system to hardware installed in a door, users can remotely control door locking and unlocking by placing their fingers next to their app’s camera.
Portfolio risk management
By managing various control processes without manual intervention, IoT in real estate leverages the home infrastructure. At the portfolio level, IoT technology improves tracking and monitoring when combined with portfolio analytics, resulting in more granular valuations, lower asset risk, and enhanced portfolio management capabilities.
IoT portfolio risk management can track the flow of people, allowing commercial property owners to analyze space use patterns and human behavior. Information obtained can help property managers identify excess capacity and improve the efficiency of portfolio management.
The Internet of Things is completely changing the way we approach heating, ventilation, and air conditioning (HVAC). As devices get smarter, they become capable of making decisions on their own. From an HVAC perspective, this means managing the temperature and ventilation for each room rather than integrating the entire system.
This is another well-known benefit of the Internet of Things in commercial real estate. Instead of turning on the lights throughout an entire floor or building, Internet of Things devices can turn on lights only in offices where employees are still working. According to a report, manufacturer Atlas Global Solutions reduced energy costs by 75% using smart LED lighting systems. This is just the tip of the iceberg, but it clearly shows the importance of the Internet of Things in commercial real estate.
From energy savings to more efficient property management, the Internet of Things is driving real estate owners’ profits. External forces, from the regulatory environment to the pandemic, have intensified and will continue to accelerate the implementation of IoT technologies. Likewise, rental property residents are learning to expect convenience thanks in large part to Alexa and other DIY smart home technologies.
The expression “Internet of Things” appeared more than 20 years ago, but today it is more relevant than ever. It will be interesting and rewarding to see what tools continue to be developed and implemented to help residents stay safer and happier and homeowners to maximize the value of their assets.
To meet the dynamic needs of customers and businesses, the real estate industry is actively using cutting-edge applications. The Internet of Things has proven to be an effective solution for everyone involved in real estate — property managers, tenants, and building owners.
IoT technologies deliver business value, differentiate companies from competitors, and offer new revenue streams. IoT energy management, workspace optimization, and IoT risk management are the most effective use cases for IoT that are rapidly spreading in the real estate industry.
If you have any questions about IoT in commercial real estate but don’t know where to start, contact Mobindustry for a free consultation.