by Shane Henson — November 13, 2013—Facing pressure to manage costs, risks and energy consumption, commercial building owners and investors are exploring how smart building technologies can help a company’s triple bottom line (people, planet, profits). Five key trends are making smart buildings a “no-brainer” for commercial property owners and investors, according to the latest report from Jones Lang LaSalle, a global financial and professional services firm specializing in real estate.
Trends discussed in the report, The Changing Face of Smart Buildings: The Op-Ex Advantage, are:
- Rapid return on investment (ROI): Smart building technology investments typically pay for themselves within one or two years by delivering energy savings and other operational efficiencies. Also driving the fast payback is the low cost of automated building technology, which has fallen as adaptation has increased. For example, intelligent lighting components that cost $120 four years ago today sell for just $50. Procter & Gamble’s building management pilot program, for example, generated a positive return on investment in just three months.
- Operating-expense (op-ex) advantage: Relative to other energy-related building upgrades, smart building technology requires little upfront capital expenditure (cap-ex), while delivering significantly reduced operational expenditures (op-ex). Using automated systems, smart buildings generally cost less to operate than buildings operating solely on legacy systems, therefore offering a long-term op-ex advantage. By combining smart building systems and data analytics with facilities management, a smart building management system can detect and resolve building issues before equipment failures and capital expenditures ensue. Additionally, operational and energy savings begin shortly after the smart building management system is implemented.
- Marketing mileage: As reported in JLL’s October 2012 Global Property Sustainability Perspective—Energy Retrofit, numerous studies and surveys have demonstrated that tenants and their advisors increasingly expect smart building features such as zoned heating, ventilation and air conditioning (HVAC), sophisticated equipment maintenance alert systems, advanced security systems and “green” buildings. Like a new lobby or elevator bank, an improvement in sustainability makes an office building more desirable to tenants. These benefits can justify collecting higher rent, and can increase competitive advantage and occupancy rates. And when the building is sold, sustainable investments can be recouped in an increased sales price.
- Energy savings: Smart building technology can generate energy savings of 8 to 15 percent annually almost immediately after deployment, with the potential for incremental improvements over time.
- Improved Corporate Social Responsibility (CSR) profile: Redirecting energy spend to building efficiency has allowed some corporate decision-makers to gain the reputational advantages of doing the right thing by the environment while also gaining significant performance and productivity improvements. Another benefit is a smart building system’s ability to measure and report greenhouse gas emissions. Some owners feed building emissions data to multiple benchmarking organizations, such as Greenprint and GRESB, as well as to Ceres and similar third-party reporting organizations, and smart systems can roll up the information from across a portfolio.
