What is it about certain commercial buildings command higher rent and attract high-end companies as tenants? In today’s long overdue age of digitization, commercial real estate owners and property managers are finding that investing in smart building technology is critical to meet the new and increasing demands of tenants for financial upside. And it is one of the easiest strategic implementations to complete. Let’s explore why certain commercial buildings can command higher rent, what is so enticing about these spaces, and how they are investing in technology to upgrade their commercial buildings to generate revenue.
Commercial real estate needs to be digital right now. Not tomorrow, but yesterday. This is because digital is all around us. How many devices do you use each day? Between mobile phones, laptops, voice activated home devices, car infotainment, and smart watches, options abound.
But which can’t everyone live without? The mobile phone. People check their phones an average of 58 times per day for everything from communication and entertainment to planning and paying. It’s expected that by 2024, we’ll be on our phones around 4 hours and 39 minutes daily. That’s why smart commercial real estate leaders and property managers are embracing smart building digital solutions to stay relevant and meet the demands of people and their communication styles of choice. These smart building products help improve human satisfaction, automate, and streamline operational tasks.
Simplified access, experience, and space operations workflows across assets, whether they’re downtown or in the suburbs, enable people to seamlessly manage and move between spaces in their own workplace and across buildings. Enabling users with self-service work orders, visitor registration, and more enhances security, improves comfort, increases efficiency, communicates better, and personalizes the human experience. This level of speed, convenience and seamlessness delivers for tenants, and gets a space occupied faster. Not to mention these digital spaces command 37% higher rents.
Demanding experiences with lasting impressions.
The most in demand spaces are utilizing smart building technology that allows commercial real estate owners to operate their spaces more efficiently for people through digital management tools. Automation elevates back-office operations from mundane to monetizable. Employee productivity is improved, energy usage is more efficient, spaces are utilized better, and HVAC and lighting systems run as needed, all contributing to notable cost savings. And because of the automation, there’s staff savings to reinvent tried and true roles from front desk to concierge for a heightened digital-first experience. As part of Cohesion’s Smart Maintenance solution, our customers saw 56% decrease in staff operating (by sq. ft.) their buildings and 42% reduction in operational staff to people in the office. While this might sound harsh, it’s reinforcing the value of elevated person to person interaction. A PwC study found that U.S. consumers did not believe once technology becomes advanced, we won’t need people for great experiences. We’re now operating in a world that demands more value from each interaction, digital or human.
The money spaces.
Smart building digital management tools are the secret weapon to assist in the experiential transformation. With quantifiable data and actionable insights, property managers and owners can be more proactive in addressing peoples’ needs, improving the quality and speed of decision-making in building operations and space utilization. While most are relying on delayed system reports to look back and make a call, artificial intelligence (AI) is proving essential in planning ahead, predicting occupancy and designing spaces. In fact, more designers are doing away with loss leader amenities like game rooms in favor of wellness pods. And the savviest buildings know that future-forward insights are more valuable than historical data.
Visibility and prediction mean the difference between an unoccupied space and a revenue generating one. In addition to an improved tenant experience, investing in technology also delivers enhanced revenue opportunities for owners. By connecting systems, physical access weaves through each touch point into a seamless, integrated, and reliable digital experience. Smart buildings command more rent, upwards of an additional $2.00 per square foot. Combine that with other aspects of the building experience that can be integrated into one linked system, like parking or optimized air quality, revenue-generating opportunities grow.
The glow up means less. Not more.
While the knee-jerk reaction is to add more to make the building attractive, we believe the opposite is ideal. By streamlining, integrating, and connecting building systems into a single pane of glass for management and insights, you’re not adding more. You’re finding ways to save and invest where it means most for tenants and occupiers, and deliver on a one-stop, elevated experience that wins in the digital workplace. And provides insights and comfort to owners, operators, and occupiers.