Until recently, the smart office was little more than a pipe dream shared by architects and technology evangelists. In this dream, an office building could respond on the fly to the needs of tenants throughout the day to offer a responsive, ultra-productive (and ultra-cost-efficient) working environment.

That dream is quickly becoming a reality.

But turning an office building from a run-of-the-mill corporate cubicle farm into a smart office involves some improvements that represent a significant investment for building owners. It’s not exactly cheap. However, as technology costs continue to drop, the ROI for landlords becomes much more clear.

Here are three ways commercial landlords stand to benefit from “smart” offices.

 

Cost Savings

 

Initial investment in smart technology can be daunting, but the potential savings can be significant. According to the U.S. Department of Energy, 20% of all the energy used in the U.S. goes to power commercial buildings. Lighting alone costs commercial buildings an estimated $38 billion a year. With numbers like that, it’s easy to see how even small improvements in efficiency can add up to big savings.

By utilizing technology, The Edge, a smart building in Amsterdam designed by London-based PLP Architects, substantially reduces its energy costs, uses space more efficiently (just 1,000 workspaces for 2,300 people) and creates management efficiencies from the constant flow and analysis of data.

In fact, it uses 70% less energy than comparable office buildings.

 

Smart Offices | The Edge

The Edge in Amsterdam uses 70% less energy than the typical office building.

 

The cost savings for smart offices don’t stop there: administration costs are also reduced when technology is added to commercial offices. New automation technologies provide administrative services, ranging from workflow automation to financial accounting and human resources. Investing in technology options gives landlords the ability to provide stellar, autonomous quality without adding to their overhead.

Predictive maintenance technologies allow for landlords to be one step ahead of malfunctions and anticipate repairs before they become costly. In their Operations and Maintenance Best Practices Guide, the U.S. Department of Energy highlights some ways in which data like temperature and noise levels can be automatically monitored to anticipate maintenance needs—an electrical connection with a higher than normal temperature may be the result of a loose connection, something that’s easy to fix before it results in a costly system failure.

 

Security

 

Security—both for people and information—is a top concern for any commercial workspace, but it can also be a bit of a chokepoint for workers. Security at large office buildings can often feel as cumbersome as the airport.

With just about everyone in a typical office building possessing some sort of smart phone, new technologies can identify people from their mobile device and allow them to access their designated areas, block them from areas in which they’re not permitted, as well as receive important security updates, like building lock downs or fire alarms. This not only improves the building security, but also removes friction when it comes to tenant’s business productivity.

“Leveraging Internet-connected devices that collect and communicate data and software for data aggregation and analysis, IoT-enabled intelligent building solutions are secure, scalable, and interoperable,” says Christina Jung of Navigant Research in a 2016 report. ‘They support open communications and standards within the building space, assisting with reduced costs and improved integration possibilities.”

However, all those internet-connected devices can also present new vulnerabilities. In 2016, IBM’s security team managed to hack into a smart building and access critical systems like data centers and building controls, all through some basic vulnerabilities.

Still, we’re not likely to see a slow down of connected devices in the office anytime soon. The best defense, according to Intel, is a layered, collaborative approach, which can help identify issues more quickly and isolate threats as they arise.

 

Value for Tenants

 

Perhaps most important of all is the value smart buildings can offer to tenants. And as these technologies become more common, the table stakes get higher and higher.

A leading North American example of the smart office trend is the New York-based “office of the future”—Boston Consulting Group (BCG). Located at 10 Hudson Yards in Manhattan, BCG hosts 500 people over six floors using a variety of flexible workspaces that include standard workstations, convertible offices, huddle rooms, case team rooms, meeting rooms, and quiet rooms. Individuals use a mobile app to choose space that best fits their style, and the entire environment has plug-and-play capabilities and a Bluetooth-enabled entry system.

 

Smart offices | 10 Hudson Yards

10 Hudson Yards in Manhattan

 

What 10 Hudson Yards and The Edge demonstrate is that a smart office can be safer, more flexible, more secure, and more productive than its not-so-smart cousin. But there’s another great reason for creating a smart office environment: People want to work there. And when you have a product or service that people want, it’s much more likely that your investment will pay off.

“Our aim was to make The Edge the best place to work,” said Erik Ubels, director of IT & workplace services at Deloitte Netherlands. “Our meeting areas are filling up because every client and employee wants to experience this building. It’s not too small yet, but the economy is growing and the building is getting crowded. It’s possible we made it too popular.”

 

Investing in the Smart Office Future

 

Smart buildings are the buildings of the future and yield positive returns for both landlords and tenants. “It has been evident that over recent years occupiers are more footloose than ever, and will travel to the best product in the best locations,” said James Nicholson of Knight Frank. “As mobility becomes more accepted and rental differentials across sub-markets reduce, service will become the new differentiator. In response, best-in-class landlords will necessarily build their reputation, brand, and continued success on the back of providing a market leading user experience to their customers.”