How IoT, Machine Learning, And Digital Twins Will Transform Real Estate
“Location, location, location” has long been regarded as the most critical factor in determining real estate value. Now, technology is disrupting this essential truth, adding a new dimension to a building’s value determination. Enterprise-level Internet of Things (IoT) applications, coupled with machine learning and building management system (BMS) integration, are enabling dramatic advancements in building efficiency and creating new revenue generation opportunities for commercial real estate companies.
Digital twins, which are virtual representations of real-world assets, are taking this one step further. By creating new virtual and augmented reality opportunities, digital twins can streamline building development and enhance the relationship between owner and tenant.
Beyond motion sensors and smart thermostats: Understanding the full scope of IoT integration for commercial real estate
When most consumers think about “smart buildings,” motion sensors and smart thermostats are two of the first things to come to mind. But smart building technology has progressed far beyond these consumer-friendly touch points. Contemporary buildings have hundreds or even thousands of sensors reporting vast quantities of data. This explosion of sensors has led to an exponential explosion of data that most commercial real estate (CRE) companies struggle to process and analyze.
Every piece of building equipment has a sensor continuously reporting status. While building managers are trying to use these sensors to proactively identify maintenance needs, that’s where most use stops. According to SAP’s Michael Shomberg, most CRE companies are not yet able to maximize overall utilization and realize true cost management benefits. That’s left some CRE executives wondering if the hype around IoT building management systems (BMS) is justified. After all, data without insights is, fundamentally, just a jumble of numbers.
IoT sensors, machine learning, and digital twins: Turning data into actionable insights
Consider a contemporary facility manager, for example. Today’s facility managers must monitor multiple screens at once, checking the building’s security system, equipment system, and lighting system, in addition to monitoring energy usage feedback from the utility company. IoT sensors and machine learning are changing this by centralizing the data, identifying which elements are most important, and turning this critical data into actionable insights.
Technology advancements like digital twinning and augmented reality will also make a difference. “As buildings are getting more and more complex, new systems and new capabilities are getting in there and the facility managers are challenged to keep up,” says Shomberg in the S.M.A.C. Talk Technology Podcast. “So what we’re going to have to do is be able to deliver knowledge about all of these complicated systems at the point of need.”
CRE executives face three challenges: managing sensor data volume, identifying what’s relevant, and using these insights to impact building management outcomes and drive cost savings. That’s where machine learning comes in.
Machine learning is an application of artificial intelligence (AI) that provides systems with the ability to automatically learn and improve from experience without being explicitly programmed. In addition to rapidly analyzing disparate pieces of data, machine learning can automate and improve complex analytical tasks. It can evaluate data in real-time, adjusting behavior with minimal need for supervision, increasing outcome efficiency and accuracy. The result: CRE firms don’t just have data. They have actionable insights they can instantly apply to generate building-wide cost-savings.
Digital twins are key to exploring the impact of these insights and realizing full cost-saving benefits. Thanks to IoT sensors, a digital twin receives continuous, real-time data from the twin’s real-world object or asset. This unique, one-to-one correspondence makes it possible to test future scenarios, including potential performance enhancements, and proactively anticipate maintenance faults. Digital twins also mean that building construction can be monitored remotely. If you’re building a skyscraper in Dubai, for example, you could comfortably sit in your New York office and use the digital twin to check the view from the 55th floor, configure amenities, and even create a price quote– all without ever being on site. Named a “Top 10 strategic trend” by Gartner, digital twins are enabling disruptive IoT solutions for the commercial real estate industry.
Next steps: Why digital transformation matters for commercial real estate
The real estate market is poised for significant growth over the next 30 years. Two out of three people are projected to live in cities by 2050. Currently, buildings account for 40 percent of total energy consumption, yet 90 percent of buildings lack the controls to be able to actually implement energy cost savings, reports Shomberg in the S.M.A.C. Talk Technology Podcast. CREs that invest in next-generation IoT, machine learning, and digital twinning stand to gain a critical first-mover advantage by addressing these unmet needs.
Right now, CRE firms have a unique window of opportunity to differentiate themselves within the real estate market. CRE firms that invest in machine learning and digital twinning will be better positioned to turn data into actionable insights– identifying unmet needs, transforming the customer experience, and realizing significant cost savings.
Hear the full podcast episode here. For more insight on digital leaders, check out the SAP Center for Business Insight report, conducted in collaboration with Oxford Economics, “SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart.”