IoT is More Prevalent in Real Estate Than You May Think
IoT or “Internet of Things” is the practice of connecting individual wireless devices such as intelligent products and sensors with one another to create a system that does more than the sum of its parts.
A good example of a single device is the Nest Smart Thermostat you may have in your home that you can use to control the temperature remotely. You may also have a device that allows you to remotely shut off the water in your home in the event of a leak. These devices separately are great features but work even better together.
You may be wondering why that is. While easy to do, it’s a great system because the Nest Thermostat knows if the temperature in your house is near freezing during your absence (due to a power outage or other event) and is “smart” enough to do that Turn off the water before it’s too late. This system enables proactive maintenance without human intervention.
Why now? Why real estate?
Believe it or not, the term IoT was coined in 1999 by British technologist Kevin Ashton. Some industries adopted the technology faster than others, and real estate has generally been slower. However, certain trends have accelerated in recent years. The implementation time is now.
An important source for a successful introduction is the further development of machine learning and artificial intelligence (AI). Developments are critical here as it is one thing to deploy a fleet of interconnected devices like smart thermostats and another when the back end can synthesize data, make decisions, and take action – the role of AI.
There are two other main reasons why we are moving towards greater adoption and application of IoT:
- The spread of 5G will further increase the overall bandwidth of the systems, allowing more devices and greater acceptance.
- The continuous improvement of security in IoT systems will enable more people and organizations to trust these systems in the future. However, much remains to be done in this area, partly responsible for the delay in adoption.
Ultimately, IoT is about connecting large numbers of interconnected devices to the physical world to make the real estate industry the perfect candidate for this technology. We see two ways the real estate industry works with IoT capabilities.
Utilities and energy efficiency
This is becoming an increasingly relevant issue in real estate as we get caught in a perfect storm of factors driving the adoption of technologies that increase energy and energy efficiency. Some of these factors include:
- Climate change is a priority on the political agenda.
- Homeowners pay a heavy price for failing to comply with some recent regulations, including in New York City.
- Regardless of regulatory pressures, property owners and operators see the ROI benefits of investing in energy-saving tools.
With a large portfolio of commercial and / or residential real estate, cost savings from energy efficient practices can have a dramatic impact on operating income (NOI). Landlords use IoT tools for this.
One company that helps landlords to track energy consumption, among other things, is Enertiv. Their platform uses on-site sensor data from elevators, chillers, pumps, exhaust fans, boilers, water meters, HVAC systems, lighting, etc. to track energy usage, plan maintenance, track air quality, measure occupancy and mitigate damage of possible leaks. These systems are all integrated with work order ticketing, the building management system, accounting systems, and energy management tools.
Other companies offering similar solutions are 75f, WegoWise, and Embue. Everyone has a different impact on how they deliver that type of value, but they are all working to reduce energy and energy costs, streamline regulatory compliance requirements, and provide proactive maintenance managers with sensor data.
The most obvious uses for IoT in real estate are use cases for smart home and smart building. Many of you likely have an Alexa at home, use a smart lock on your door, and / or have some sort of remote monitoring system at home. These types of tools work together, among other things, to streamline property management processes for property owners and managers.
The pandemic has accelerated many innovations and adoption in these areas. Building entry points, door handles, staircase doors and elevators have been identified as the main risk factors for COVID transmission. Property owners use touch-free solutions for these “bottlenecks” to reduce the risk of spread. This has opened the door to streamlining property management.
One company that helps buildings do this is Latch. Latch’s core product is an intelligent lock for apartment buildings that residents can use to open the door with their smartphone and grant guests remote access. The company also uses intercoms and will be launching cameras shortly.
The company also calls it “Latch Manager,” which allows remote access for maintenance, demonstration and other purposes to be managed while recording who opened a door and when. Other companies that provide landlords with touchless and remote access include ButterflyMX, Zerv, and IOTAS.
A key advantage of these intelligent building solutions is the ability to offer “touchless demonstrations” that allow a potential resident to see a unit without a leasing agent, which is particularly relevant during the pandemic. To this end, virtual demonstrations are another growing trend as a result of the pandemic. VirtualAPT is a company that uses autonomous robots to help with this. The robots use cameras and sensors to create beautiful virtual collateral for property managers.
The bottom line of Millionacres
IoT offers property owners added value – from energy savings to a smoother property management process. External forces from the regulatory environment and the pandemic have and will continue to accelerate adoption. Similarly, tenants of rental properties are learning to expect these kinds of tools as conveniences, powered in many ways by Alexa and other DIY smart home technologies.
The term “Internet of Things” was coined over 20 years ago, but is more relevant today than ever. It will be fun and valuable to see what other tools are being developed and used to keep residents safe and happy, and to allow landlords to maximize the value of their property.