Smart buildings seem to come up over and over again when I look at the future of CRE. The experts love to talk about the benefits of AI-driven elevators, lights connected to room booking systems, GPS locators for employees, and advanced mobile-based wayfinding. All of this sounds fine but there is a resounding “so what” from the average tenant.
The inimitable Duke Long has opined a bit recently on the concept of the tenant as a value generator. The future is all about services-as-a-service (let’s be honest, that’s the true end state of it all). As a building owner or space provider, what incentive are you giving your tenants to stay beyond their lease term? Software companies lock companies in by offering a killer feature that can’t be copied by the competitors. Most landlords have decided to compete based on least common denominator: price.
There are some buildings that think differently but the real sign of a gap in the market is the rise of WeWork. If you think they are succeeding only because of the coworking angle, you’ve missed the boat on their value proposition. Their real value is in providing flexible space that just works. You get what you need to be successful and once you are in, it’s hard to give up the amenities and extras.
Smart buildings to tenant driven sites are about more than just cost savings, it’s about getting the lease renewal and then the next. It’s about earning additional revenue from additional value-added opportunities.