Digital sensing devices can help FMs improve space utilization and lower operating expenses — read about their uses and challenges

by Brianna Crandall — January 16, 2019 — Beacons and sensors — digital sensing devices that make use of radio-frequency identification (RFID) tags, Wi-Fi and smartphones — are making it easier than ever for business owners to efficiently track inventory, improve space utilization, lower operating expeses, enhance customers’ experiences and tighten security.

A new research brief published by commercial real estate (CRE) think tank the NAIOP Research Foundation offers insight into some of the ways that simple, tiny, affordable and ubiquitous sensors are being used in CRE settings, as well as identifying the broader challenges associated with using networked digital data-collection systems.

The study explains that beacons typically “push” information to a mobile device within a certain geographic area (e.g., a notification appears on your smartphone that the store you are passing is having a sale), while sensors “pull” information from the environment (e.g., room temperature, motion, lighting levels).

While these technologies are not new to commercial real estate, beacons and sensors are no longer used only for single purposes, such as motion sensors turning lights on in a conference room — they can now share and store data.

Today, as their usage grows, these technologies are increasingly linked through internet-based networks that become virtual ecosystems; that is, they communicate over a network and compile location-based data that can be collected and analyzed. This integration with the “Internet of Things” (IoT) will connect an estimated 20.4 billion “smart” technologies by 2020, according to Gartner, Inc., and can provide comprehensive information about a business or property, such as real-time information on temperature, people counts, goods movement and energy consumption.

The research brief identifies real-world examples of how these technologies are used in commercial real estate settings, including:

  • RFID tags attached to hardhats or badges at construction sites to track the workforce as it comes and goes during the day, and to categorize information such as the number of workers on-site, the identities of individuals who have specialized training or key certifications, and employee demographics.
  • JLL’s PinPoint, a tool to monitor shoppers within a geofence (defined as a virtual geographic boundary line, typically using GPS, cellular data or Wi-Fi, that surrounds a specified area, such as a single building or an entire city) at shopping centers the company manages or leases. The data collected by the geofence interface provides an exact count of foot traffic, as well as accurate and quantifiable examples of consumer behavior that can assist mall owners in attracting new customers by creating new leasing strategies tailored to shopper preferences.
  • WeWork’s use of beacons to track the movement of people through its shared office facilities, including a smartphone push notice when a WeWork member enters a conference room notifying them if the room has been reserved by someone else and, if so, which other rooms are free.

The research brief also includes two case studies on integrated, multiple-technology systems: Seattle’s Amazon Go storefront, and the usage of location-based systems in an office building.

Privacy concerns

Although collecting and analyzing digitized consumer or employee data can reap valuable rewards for businesses, the practice comes with privacy concerns primarily related to data privacy and security, the research brief points out. If building owners and operators choose to collect identifying data, they should clearly explain why they are collecting the data and make certain it will directly benefit the customer or tenant experience, not just the building owner.

NAIOP says commercial real estate companies can protect their data by:

  • Installing new, secure systems designed for IoT rather than retrofitting existing systems;
  • Instituting data governance guidelines; and
  • Creating device ecosystems that ensure damage to one device does not lead to widespread system failure.

Marc Selvitelli, CAE, executive director of the NAIOP Research Foundation, remarked:

This research brief is helpful to building owners understanding how they can use sensor data to make evidence-based decisions, rather than relying on intuition or educated guesses, to help shape and predict how people use space, as well as provide existing and prospective tenants with unique information about a facility. The use of sophisticated devices to monitor and assess environments, despite the challenges, will continue to bring about transformation in commercial real estate.”

Download the full Beacons and Sensors in Commercial Real Estate report at no cost from the NAIOP website.