Smart Building Metrics: Measuring the Opaque, Misunderstood and Poorly Defined – Greentech Media

Like several answer sale, good constructing distributors usually create detailed enterprise instances to persuade constructing homeowners and operators to make a purchase order. In the previous, these enterprise instances had been primarily based totally on power financial savings. Over the previous few years, there was some push to quantify different backside line financial savings alternatives, resembling diminished upkeep prices and prevented tools alternative.

At the similar time, some research shows that inexperienced buildings (which share some options with good buildings) drive high line advantages resembling larger rents and property worth. Normally, the high line advantages are extra compelling to an enterprise, however the could also be much less understood or “plausible," on condition that the exhausting information is analysis-primarily based and is probably not as tangible to particular person constructing homeowners.

Power Star and different sustainability protocols like GRESB present some standardization for inexperienced constructing efficiency, which is a part of the good constructing worth proposition. These requirements might assist make a few of these high line advantages extra compelling. However the power financial savings is more likely to be just a fraction of the total value of smart building technologies. A sensible constructing enterprise case primarily based solely on power financial savings will go away cash on the desk.

The truth is, there are numerous ways in which good constructing expertise can add worth to buildings and much more methods to measure this worth. However simply as the marketplace for the options is fragmented and opaque, so are the metrics to know the worth proposition of those applied sciences. Some distributors try and outline their very own good constructing metrics. Along with being self-serving, this simply provides to the confusion.

The usual monetary metrics utilized in actual property might not directly assist to quantify good constructing applied sciences. Nevertheless, metrics resembling rents, asset worth, and occupancy price (and the modifications to those metrics after good constructing applied sciences have been put in) are more likely to be oblique and lagging. Moreover, components like location have a major impression on actual property monetary metrics.

Evaluating the worth of good constructing applied sciences in New York vs. Nashville will likely be troublesome, since the property values themselves are so divergent. Moreover, every metropolis has totally different key industries, and a few of these industries might worth good constructing applied sciences greater than others. For instance, excessive tech firms on the West Coast might place extra worth on good constructing applied sciences.

As well as, relying on the kind of constructing, there are going to be totally different metrics that matter. For instance, a marquee workplace constructing downtown might use good constructing applied sciences for aggressive differentiation. Or, an anchor tenant might request particular options. Smaller buildings, resembling eating places and retail, might take a look at the operational efficiencies which are enabled with trendy constructing operations expertise.

Two issues are wanted. First, analysis on the worth of good constructing applied sciences, very similar to the analysis on inexperienced buildings. Second, requirements on what applied sciences are thought-about good would add readability to the market and assist patrons procure applied sciences with out as a lot friction. However these developments are years away. Till that point, right here is a few steering on the 4 classes of metrics that ought to be thought-about by constructing homeowners and operators.


These are the conventional actual property metrics like lease per sq. foot and occupancy price. Smart constructing expertise, especially space utilization solutions, will assist constructing homeowners higher make the most of their area (driving up lease per sq. foot) and establish underutilized areas that may very well be repurposed for larger lease.

Whereas the conventional monetary metrics could also be lagging indicators of the impression of good constructing applied sciences, in the future there could also be a clearer high-line monetary profit as extra tenants are capable of lease smaller however excessive functioning workplaces. For the time being, potential patrons ought to ask distributors about how they've improved the monetary metrics of buildings which have applied their expertise.

Operational effectivity

This encompasses a broad class of metrics. Relying on the stage of instrumentation and particular methods in every constructing, the key operational metrics will differ. In the previous few years, distributors have targeted on non-power operational metrics to show out the worth of their choices. This features a discount in scorching/chilly calls, which saves workers time.

Different examples embrace a discount in defective tools or prolonged tools life. There may be nice worth to options targeted on operational effectivity, although most often there's a providers part of the providing that constructing homeowners should buy with their software program licenses. This could improve the price considerably.

Alternatively, constructing homeowners should dedicate their very own workers time to handle the operational points which are recognized by the good constructing options. Right now the related operational metrics deal with facility and power prices per sq. foot, variety of work orders and common time to shut them. In the future, predictive analytics might assist keep away from points completely (a metric resembling “prevented work orders” might turn out to be related). Right now, facility managers contemplating good constructing expertise ought to perceive which metrics every vendor makes use of to construct its enterprise case and examine them to the metrics that the group itself tracks.


That is an rising space of curiosity as a result of the occupant-targeted features of a wise constructing answer have high-line advantages. Enabling elevated productiveness and larger occupant desirability will drive up rents and make tenants need to keep in an area for extra years.

Traditionally, occupant primarily based metrics included website location (entry to transportation, eating places and different sights) and the present facilities in the facility (resembling a gymnasium, dry cleaner, cafes and eating places). Now constructing homeowners are how expertise might help them higher make the most of their area and the way it can inform modifications to particular makes use of inside buildings.

For instance, whereas most convention rooms are designed for a number of folks (four, 6 and even eight occupants), many conferences have simply two members. With actual information on convention room use, a constructing might convert bigger convention rooms into extra small 2-individual rooms. It will improve the utilization of the area and improve satisfaction as a result of there will likely be extra provide of convention rooms. Essentially the most thrilling future developments in good buildings will likely be how they enhance the occupant expertise. It will immediately enhance the monetary efficiency of the constructing.

For now, solely a subset of distributors discuss how their merchandise impression occupants, however it's price discussing with any potential distributors.

Security and safety

Fireplace security inside buildings is extremely regulated. Safety methods are present in any trendy workplace area. Some workplace buildings might have very superior safety methods to draw particular clientele. Smart constructing options do enhance the hearth and safety methods inside buildings in a number of methods.

First, monitoring occupants inside an area can be utilized by the hearth division in the occasion of an emergency. And, the similar information can be utilized to reinforce safety: as a substitute of monitoring entrances and exits into an area, precise places of occupants will be tracked too. The worth proposition to most potential tenants will focus on threat mitigation and/or model worth. In some instances, particular hearth and security measures will allow buildings to draw particular tenants that will pay extra per sq. foot, however provided that there may be demand for this type of area in the first place.

Placing all of them collectively

An absence of widespread requirements and metrics to quantify the worth of good buildings does make it harder for these applied sciences to scale. It additionally provides to purchaser confusion throughout procurement cycles. However, given the nascent nature of many of those applied sciences and the distributors delivering them, some market maturation must happen earlier than the business can agree on standardization.

For now, constructing homeowners and operators can do their very own due diligence by asking potential distributors detailed questions on how their options impression property values, operations, occupants and constructing security/safety. Many distributors ought to be capable to cite comparable buildings which have applied good constructing applied sciences. These examples ought to present some enchancment in these 4 classes of metrics.

Particularly, constructing homeowners ought to contemplate the backside line enhancements primarily based on operational effectivity and the high line advantages from occupant-centric options and capabilities. It will assist set up a extra sturdy enterprise case for good constructing investments.


Joseph Aamidor is a senior product administration guide targeted on good buildings, IOT and power. He helps startups and established business gamers perceive the good buildings market, develop aggressive technique and forge partnerships. He beforehand served in senior product administration roles at Lucid and Johnson Controls.  

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Smart Building Metrics: Measuring the Opaque, Misunderstood and Poorly Defined - Greentech Media