New, exciting technology in three areas — real estate transactions, property ownership, and tenant/workplace occupancy — is creating a paradigm shift in workplace design and operations.
By Marc Margulies. Originally published in Building Operating Management.
September 7, 2018 – Commercial real estate has been managed more or less the same way for decades: An office building is constructed; a tenant/user occupies it; the occupant moves if more or less space is required or the lease has expired. New technologies offer opportunities to fundamentally change that paradigm. The new paradigm goes well beyond real estate. For example, we used to watch whatever channels were offered on television. Now we can select from a wide variety of entertainment sources and features (stream content, record programs, fast-forward through commercials, manage subscription costs, etc.). We interact with media and customize it to our liking, and we can do that now with the workplace too. This newfound technological interaction is disrupting every aspect of real estate finance, facility management, and tenant use.
There are three primary categories of disruptive real estate and facility management technologies:
-Real estate transactions
Each technology category provides distinct benefits that facilitate better interaction and more efficient management. Yet the ultimate market driver of them all is tenant/workplace occupancy, because it is tenant users that create demand for real estate in the marketplace. A better understanding for the implications of these disruptive technologies can help building owners and facility managers design, build, and manage more responsive and cost-effective buildings.
According to a recent survey by Herman Miller, 40 percent of workstations are occupied less than half the time, and private offices are on average occupied only 25 percent of the time. Building owners and facility managers are coming to realize what an enormous waste of resources this represents – one that feels increasingly jarring as we move toward a more shared economy. As we become more acculturated to businesses like Uber, Airbnb, Hubway, Getaround, and WeWork, among others, people are becoming more comfortable with the idea of sharing the workspace too. Many companies are shifting their workplace from fully assigned seating to “free address” space allocation for “activity-based work.” For employees who are not devoted to one focused task all day long, the free address concept allows them to choose where they want or need to sit based on their daily or hourly task, who they need to collaborate with, or what other adjacencies are important to their productivity.
In a seminar at Cornell University earlier this year, Christian Bigsby, senior vice president of worldwide real estate and facilities at GSK (GlaxoSmithKline), described how the company made this shift in workplace design. He said that “85 percent of the [office] footprint was dedicated to 35 percent of the work activities. We studied it in time and motion studies, and it is a classic misallocation of resources in a company. You cannot have one third of your activities supported by 85 percent of your resources. It’s a complete squandering of resources.” GSK changed its model to increase the variety of work settings. There are now seven different options, from a telephone booth to a 16-person conference room, to a simple adjustable, four-foot long ergonomic desk for answering emails or making a quick call. “Offering a variety of work settings shrunk our footprint by almost half in the office settings, and it changed how people used the space,” Bigsby said. “Our data shows that 95 percent of employees that use those spaces would never go back to the way they were.”
Managing such a dynamic office environment — one that must be highly flexible and responsive — is only possible through a software support platform that is both simple to use and portable, and those technology systems now exist.
An opportunity to increase productivity through collaboration lies in the ability to schedule gathering spaces appropriate to the size and needs of the team and then use the data to fine-tune facility efficiency. Boston-based technology firm Salsify uses the data from its scheduling system to verify that meeting room ratios function as they were designed and ensure that the quantity of rooms per size are aligned with utilization. “Since the system offers historical data, we can look back and compare what usage used to look like when we first moved in and what it has changed to now,” says Stephanie Peters, who manages culture, employee, and office experience at Salsify. Not only does the company maximize the use of meeting spaces, but by analyzing the database, the facility management team can identify trends and patterns in utilization, which allows them to know how and when they should reconfigure their space to assure maximum responsiveness. As Salsify prepares to move to new headquarters in August 2018, the company knows that the new space will fit their work patterns with precision, eliminating waste and promoting full-throttled collaboration.
The world of the Building IoT (Building Internet of Things) has enabled an increasingly robust interaction between the interior environment and its occupants. Sensors installed in office spaces, light fixtures, workstations, HVAC equipment, hardware, and audiovisual equipment facilitate the ability to gather data on activity, light levels, vacancy, temperature, security, and media interface. With the data comes the ability to understand patterns. The next step is then to use that data to improve outcomes. For example:
-Some systems gather data that allows users to track and understand patterns of interaction. Technologies like Rifiniti and Humanyze are “people analytics programs” that track how and where workers engage each other, with the goal of providing information on how best to plan for the most effective strategic adjacencies.
-We’ve all looked up at office towers at night, seen the lights blazing on empty floors, and wondered why all that energy is being wasted. Often the answer is that they need to be illuminated for the cleaning crew. The more fundamental answer is that the building does not have a sufficiently sophisticated lighting control system to dynamically modify the light fixtures. According to National Grid, 35 to 45 percent of an office building’s energy cost is due to lighting; the potential to save energy and money by turning off unnecessary lights is enormous. Companies are moving beyond just code-mandated occupancy sensors in offices in favor of control systems for open office areas too. As systems become even more refined, applications like Comfy, which was recently acquired by Siemens, allow users to adjust light levels to their individual preference. The Comfy app, which started out as a way to reduce hot and cold complaints, now also allows users to find and book available rooms and desks, and share immediate feedback with workplace teams.
-User comfort has always been of great concern to building managers. One person’s hot is another person’s cold. Not only do new energy management technologies allow for more efficient heating and cooling, but customized area controls are becoming more available. CrowdComfort, for example, allows individuals to use their smartphones to communicate with building management directly, facilitating micro-adjustment of systems to user preference, as well as smooth dialogue with building engineers.
-Security is of ubiquitous concern, for reasons related not only to life and physical property safety but also protection of intellectual property. Immediately post-9/11, reception desk greeters became security guards and front doors became entry gates. Nearly everyone now has a smartphone, which can be readily programmed with owner identification. Mobile access control has the advantage of simplified and centralized credential management, and offers the benefit of full data gathering and analysis. Knowing who enters and leaves a building — and when — can tie directly into a better understanding of how much space is really needed. An increasingly mobile workforce does not operate according to the more traditional 9-5 schedule; thus, the amount and location of required space must be more deeply scrutinized.
-Audiovisual systems have become the mainstay of collaboration. Few meetings in the knowledge economy are conducted without technology support, and screen sharing has become universal. Confirmation that the right AV is available for the meeting size and purpose is one of the functions of companies like TEEM, a software that not only schedules rooms and equipment, but simplifies the sharing and display of information.
Finally, there are applications that interface with services and vendors inside and outside the office building itself. Corporate cafeterias often now support the ability to order food via an app, either for individuals or catered groups, in advance of the rush-hour pickup. Many new dining facilities offer state-of-the-art software capabilities for viewing and ordering customized selections from any of the variety of their culinary options. Other services ready to ride this technology wave may include dry cleaning, health and wellness services, day care scheduling, and access to other amenities.
PTC, a global provider of technology that transforms how companies design, manufacture, operate, and service things in a smart connected world, is re-locating its global headquarters to a new 250,000-square-foot workplace in Boston’s Seaport District. As part of the design of a new physical work environment, PTC recognized the opportunity to meld its role as an innovator in software for product design, IoT, and augmented reality to make its headquarters a global model for excellence in the use of workplace technology. The task? Evaluating the most appropriate workplace management technology in an industry known for lightning-speed evolution.
“At PTC’s transformational and technology-rich new workplace, employees will be able to use Steelcase’s Room Wizard, coupled with Workplace Advisor, to maximize productivity, collaboration, and space utilization,” says John Civello, vice president of corporate real estate and workplace at PTC. “With sensors installed in all workstations and conference rooms, our facility managers will be able to identify areas of heavy utilization, and communicate with users how to change meeting schedules to avoid congestion or modify facilities to meet the need.” Another way to leverage the software is to measure heavy-use patterns in real-time, in order to anticipate pressure on the space before it becomes critical. “Since the workspace is 100 percent free address,” Civello says, “I don’t see how we could have done this without the tools that show us what is and isn’t working. We’d be at a major disadvantage [without them].”
Because PTC partners with a wide variety of building management systems and manufacturers, the company will ultimately use augmented reality modeling to assist with preventive maintenance of HVAC and other building equipment. Real estate and facility management executives will know that their building systems are being well-managed, running efficiently and cost-effectively.
Just as these disruptive technologies are transforming the workplace, augmented reality apps are starting to emerge to help visualize “smart city” activity such as entertainment events, traffic, retailer and restaurant offerings, harbor activity, and commuter options. The use of augmented reality as a real estate technology disruptor is just beginning to be explored, and is at least as exciting as when the cameraphone idea was first introduced. We will soon be able to see in virtual reality greater possibilities for our environment, and those possibilities will be linked to data that will allow us to fully customize what we see and feel around us. Buildings are moving from being simple bricks and mortar to living, breathing machines for human habitation.
Marc Margulies (firstname.lastname@example.org), FAIA, LEED AP, is a principal and senior partner at Margulies Perruzzi, an architectural and interior design firm that designs workplace, health+science, and real estate projects