billion connected devices in 2020, more
than doubling to 75. 4 billion by 2025.
Commercial real estate IoT applications could include building
management systems, security cameras, multi-use sensors and trackers,
customer/occupant recognition, and
smartphone-enabled comfort adjustment, to name a few.
“The internet will be a part of everything
you see, do, and touch,” said Newmark
Grubb Knight Frank executive managing
director Geoffrey Kasselman, SIOR,
LEED AP, of Chicago. “It’s been unleashed, but it’s not even close to hitting
IoT has many benefits for commercial
real estate users, from tracking space
utilization to improving the overall
tenant experience, Pruitt said. But while
embraced by many building owners and
managers, there is still pushback from
others who don’t understand why they
need Io T or should spend the money.
“There needs to be some sort of financial incentive beyond overall efficiency
savings to get them to upgrade their
buildings, and right now, there’s not
a lot available,” he pointed out, noting
government money could help.
On the robotics side, the industry is
already beginning to experience the
effects of driverless cars. While the impact might not be as large for cities with
efficient transit systems, cities built
around automobiles — like Dallas, Los
Angeles, and Atlanta — will see new real
estate opportunities emerge.
“Driverless cars mean you don’t have to
park where you are, so garages become
prime real estate for alternative uses,
Self-driving trucks aren’t far behind,
noted Real Miami Commercial Real
Estate partner Daniel Zelonker, SIOR,
CCIM, of Coral Gables, Fla. Logistics
companies are beginning to invest in
vehicles that allow 24/7 deliveries and
more affordable deliveries. They’ll also
be safer and more fuel efficient, added
RD Strategic principal Richard Delisle,
SIOR, of Mundelein, Ill.
Office buildings will also be disrupted
by such hyper efficiency. Many buildings
are only occupied from 9 a.m. to 5 p.m.,
Kasselman explained, meaning even
though a property could be 100 percent
leased, its real occupancy is only 33
percent because it’s empty two-thirds
of the time. Through the right design
and technology deployment, buildings
can be occupied closer to 24 hours a day
and allow for a mix of uses.
The Changing Building
IoT and robotics are already changing
the physical characteristics of office
and industrial buildings. One of the biggest impacts is the need for high-speed
“If your building doesn’t have a high-speed connection, it will impact your
rents and is often a detriment to a listing,” Delisle said.
And in order to support mushrooming
IoT devices, buildings need infrastructure using two or more power sources,
“For industrial, the move toward robotics requires special building features,
such as additional power and space
to accommodate features like liquid
nitrogen tanks increasingly used in the
machining and fabrication,” Delisle said.
These are additional expenses on top of
needed building retrofits and upgrades.
Additionally, the increasingly automated
delivery process—which will eventually
eliminate the need for humans to off-load, sort, and stock — means the sizes
and utilization of employee restrooms,
lunchrooms, parking lots, office space,
lighting levels, and aisle spacing will
also change, he continued.
“Staying ahead of the technology curve
is critical, especially with the widening
of the Panama Canal,” noted Zelonker.
While only three ports in the U.S. can
handle the newly sized ships (which
require a 50-foot or deeper channel,
machinery that handles container rows
22 wide and adequate transportation),
the number will grow, so industrial
owners need to handle shipments as
expeditiously as possible.
A Look Into the Future
One technology the industry has not
seen—but will come—is automated
construction, Delisle predicted. This will
revolutionize warehouse, residential,
and office construction while mitigating
its laborious, dangerous, and costly
He has spoken to many builders in the
industry who have no exposure to or
appetite for this future trend. But Delisle
warned professionals cannot stick their
heads in the sand, as it’s coming—likely
within the next decade.
"While IoT and robotics aren’t touching everything in commercial real estate, it’s drastically changing efficiency and
optimization for both the landlord and tenant."