Using Technology as a Change Agent in Commercial Real Estate
Commercial real estate is a complicated and diversified market – and commercial real estate firms often own a variety of buildings – from office buildings, data centers, warehouses, retail and more. Office buildings, in particular, are a focus of many current conversations as the concerns about how remote and hybrid work have changed the importance – or potentially even the need of the “office.”
It would be a mistake to say that remote and hybrid working haven’t changed how we view the office. This is true. It is also true that more and more workers are going back into the office every day. In fact, a Gartner study forecasts that by the end of 2023 only 9% of global knowledge workers will be fully remote.[i] This means 91% of global knowledge workers will work in the office either full time or on a hybrid basis.
The question is this: How do you create an office environment that rivals what people can create at home to entice them to want to come to the office? The answer lies in how companies use the combination of advanced technologies, amenities and overall building experience.
This means commercial real estate owners need to leverage technology in their buildings that helps drive outcomes to support their business goals. From meeting the changing demands of workers, and the companies that employ them, as well as a dynamic global economy, success depends on the ability to quickly adapt to changing needs and increasing pressures.
Quick pivots are not new to the industry. What is new is rapid digitalization and adoption of IoT-based technologies over the past several years. Building owners that use technology to help outpace demands – and meet critical business outcomes – will be better positioned for long-term success as they turn challenges into opportunities.
Honeywell Forge for Buildings is a comprehensive approach to building operations and management designed to help building owners achieve outcomes that matter: occupant experience, operational efficiency, sustainability, safety and security, resilience and compliance. We’re not envisioning the buildings of the future; this is what buildings can do today and buildings who utilize the technology available create a true point of differentiation between them and the competition.
Occupant experience: Earn the commute by creating an occupant-first experience
After several years of working from home, transitioning back into the office is an adjustment for many workers even if on a hybrid schedule. Knowledge workers’ expectations have changed. Building owners and their tenants need to prioritize the modernization of the occupant experience to not only earn the commute but also demonstrate the value of working from the office.
[STAT: 93% of surveyed office workers say they have higher expectations for IAQ in their workplace than they did three years ago, according to Honeywell’s 2023 Healthy Buildings Survey]
The digital transformation of buildings is helping to create a more human-focused direction. This means the convergence of the physical occupant experience and the virtual user experience. It’s up to building owners to make the most of that convergence by deploying new technologies that help enhance both comfort and productivity and create premium occupant experiences that help retain tenants – and in turn, help them retain employees.
Imagine a truly customizable occupant experience, one that accommodates individual lighting, temperature and humidity preferences – or one that could adapt to a company’s needs on a specific day by increasing air filtration and ventilation during an all-hands meeting.
A building designed around occupant experience can do this by using technology to create a responsive environment that adapts to its users. This marks the next step in digitalization – adding sensors, automation and advanced artificial intelligence (AI) and machine learning (ML) algorithms could automatically make specific in use zones more comfortable while decreasing energy spent on treating un-used areas all while helping reduce demands on building managers. Frictionless experiences and tools for collaboration and comfort can delight occupants, while integrated solutions like real-time data and predictive maintenance can allow building managers to shift their focus from ‘fixing’ to predicting. Technology that predicts and adjusts all the time allows owners to receive the benefits 24/7.
Putting the occupant experience first can help drive growth potential in a new market segment for commercial real estate: premium office spaces that use technology and data to create more welcoming and supportive workspaces. Making occupants more engaged and productive also may help to command higher rent premiums and reduce vacancies.
Operational efficiency: Identify ways to change how you operate your building
Many commercial building owners, like many businesses, are doing more with less. It’s often because they can’t find enough skilled workers to support their facility management teams. This along with increasing financial pressures, many commercial real estate leaders say that optimizing their operations is a current priority.[ii]
Improving building performance – from a single site to an entire portfolio – can be done with more integrated and better contextual data. One way to do this is to leverage technologies that enable building owners to control complex sets of systems using one unified platform to make more agile, insightful decisions. The ability to view and manage systems holistically can enable more strategic facility management.
With flexible workspaces and hybrid work, it’s essential to understand who’s in the office and why they’re there, as well as how occupant density changes building management strategies. Asset performance is also key with the ability to improve performance with real-time insights to identify trends. The more information the system provides about operations, the better organizations can manage and control the experience. Integration platforms, like the Honeywell Enterprise Building Integrator, can help owners and operators remove operational silos to make buildings smarter and healthier. It also enables tenants to streamline workflows, run their businesses more smoothly and manage costs.
Beyond integration, the right building service partner and contract can help you address multiple challenges – from managing rising energy costs, improving uptime and optimizing your facility team’s time. Honeywell can even help provide remote building management – helping to solve issues remotely without sending out a service team – saving both time and money. A remote building management team may also identify potential disruptions before they occur to reduce downtime. This allows you to focus on your business's core mission.
By integrating software, hardware and services, your building can become a more profitable asset that is more attractive to tenants. It also allows building owners and employers to put the occupant at the center, creating building ecosystems that better foster efficiency, productivity and collaboration.
Sustainability: Incorporate your building into your sustainability plan
Companies face increasing pressure today – from stakeholders, employees as well as regulatory agencies – to curb energy consumption, reduce carbon emissions and create more sustainable, healthier facilities. ESG commitments are also increasing the impetus to make buildings more sustainable.
There's an urgent reason for this: commercial buildings currently account for almost a third of global energy consumption and 37% of global energy-related CO2 emissions. While 28% of those emissions are related to building operations– or the energy used to heat, cool, and power the building – many building owners likely don't have device or asset-level insight into energy consumption or carbon impact.
With roughly 80% of today’s buildings expected to be standing in 2050, the challenge of controlling escalating energy use, particularly in older buildings, to meet carbon emissions reduction targets will only increase. How to make real change happen? The latest generation of ready-now, cloud-based solutions such as Honeywell Forge Sustainability+ for Buildings | Carbon and Energy Management can help building owners and operators meet two pressing, yet often conflicting, objectives: optimizing indoor air quality and reducing the environmental impact of buildings with the aim of improving carbon-reduction goals.
The scalable, system-agnostic application uses advanced controls capabilities use artificial intelligence (AI) and machine learning (ML) algorithms to create a baseline of energy consumption and carbon emissions across building assets and can help monitor, control and optimize those assets. It can decipher how a building uses energy while providing a clear analysis of energy and carbon emissions (scope 1 and 2) at the asset, site and portfolio levels. It uses smart meters, sensors and utility data to segment actual consumption and energy emissions by type of utility. Then, the application analyzes that data alongside factors like weather, occupancy and utility rates to provide insight into building performance. Using the collected data, it optimizes the building systems to reach desired outcomes – without impacting the comfort or productivity of occupants.
Tenants of premium office buildings have their own sustainability commitments and the pressure to meet those commitments is becoming a critical factor as they consider their leased spaces. Honeywell has launched a new digital signage offering that brings to life the on-going savings and reduction of sustainability technologies to tenants and occupants. This helps the tenant to communicate savings to their employees/visitors and for the owner to demonstrate value and justify premiums.
Using tools like this, building owners can make their facilities more sustainable without sacrificing the occupant experience or the bottom line.
Safety and Security: Keep people and places safer
A recent survey showed 90% of business leaders saw a “dramatic increase” in physical security threats from 2021 to 2022.[iii] Technology solutions can help building owners meet critical business outcomes without compromising safety and security. This means building owners need to be ready to handle a variety of incidents, manage threats, have accurate situational awareness and manage the fire and life safety needs of their facilities.
Security issues aren’t always malicious actions. It could be not managing access control to sensitive spaces in a building or relying on human response in a crisis. Using an integrated approach to security and life safety, building owners can achieve multiple outcomes including creating standard operating procedures to enable faster and consistent responses to situation, gaining awareness of the people, assets and property across a building or enterprise, and manage threats with access control, video systems and intrusion detection.
Life safety systems are also critical – not just in an emergency but through the daily operations of a building. Honeywell’s leadership in fire and life safety can provide building owners and operations with advanced protection for people, property and assets including full visibility of a fire system’s performance from a mobile device, including capabilities for digital documentation of system tests and performance.
Security and life safety are critical to the occupant experience. Linking the occupant experience platform to safety systems also makes it easier to manage evacuations and other emergencies, especially where hybrid work models have caused day-to-day fluctuation in the number of on-site workers and how they utilize building spaces.
Resilience: Take a proactive approach to OT cybersecurity
Building owners also need to create a reliable building environment that helps system uptime and enable better incident management. Cybersecurity is critical to resilience
Today, many conversations about cybersecurity focus primarily on information technology (IT) systems rather than OT environments. OT environments that control, monitor and actuate processes, equipment and operational environments are often overlooked, but they are just as important to security. The number of cyberattacks on critical infrastructures, globally, are cause for concern. Given the potentially exploitable nature of OT systems, it is imperative that building owners deploy the right strategies to best protect their systems.
As buildings and their systems become more connected to the cloud, via Internet of Things (IoT), responsible building owners should take the steps necessary to understand their cybersecurity risks and accountability to mitigate them. With increasing cybersecurity risks, tougher regulations and complex interconnected systems, building owners need a simple, centralized way to administer enterprise cybersecurity that encompasses both OT and IT systems.
At a tactical level, this means correcting common vulnerabilities, such as outdated or unpatched software or communication protocols that lack stringent security measures. As threat actors continue to gain critical mass and learn to exploit new vulnerabilities, buildings need products and protocols that can quickly identify exposure and prevent or mitigate breaches.
A layered approach to protection is important as well as using solutions such as the Honeywell Threat Defense Platform (HTDP). HTDP uses autonomous, AI-powered deception tactics to outsmart attackers, as well as high-fidelity threat detection to deter and control attacks. These kinds of technologies confuse and mislead attackers away from critical assets, resulting in higher rates of detection with little to no alert fatigue. HTDP leads threat actors to ‘decoys’ that appear to be valuable OT and IT assets but provides no access to actual enterprise devices. The solution makes real, critical operational devices harder to find, slowing down adversaries and helping security teams capture them faster.
Organizations can no longer treat the buildings they own or occupy as just another tick on the balance sheet. They have to think of them as part of their overall business strategy which means it’s not about adding point solutions to your technology approach but taking an outcome-based approach to solving your biggest challenges.
[i] Gartner, Gartner Forecasts 39% of Global Knowledge Workers Will Work Hybrid by the End of 2023, March 1, 2023 [Accessed July 16, 2023]
[ii] J.P. Morgan, 2023 Business Leaders Outlook: Commercial Real Estate, January 17, 2023 [Accessed July 16, 2023]
[iii] Ontic, The 2022 State of Protective Intelligence Report, [Accessed May 6, 2023]
