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Indoor space sensing is emerging as one of the most interesting and influential smart building technologies. Some reports indicate that 50 percent of office space is empty and there is significant misalignment between spaces and how they are used, especially in conference rooms. Indoor sensors may be installed initially for a single purpose, such as lighting control or conference room booking, but once they are in a building, they can support a wide variety of use cases.
A previous GTM article summarized the technologies that can be used to monitor occupant presence and movement in commercial buildings. This article highlights the use cases that can turn indoor space data into value.
Moving forward, indoor space sensing will be a key component of buildings and real estate. Instead of looking at buildings as line items and expenses, they will be considered unique assets that can improve productivity, retention and occupant wellness. In a recent white paper, engineering and design firm Stok calculates that in addition to energy savings and asset value increases, high-performing buildings provide significant benefits to occupants.
Stok estimates gains of nearly $4,000 per employee in profit. Moreover, when looking at all the value streams of high-performing buildings, the firm calculates that 84 percent of the value is due to increased employee retention and productivity, while just 9 percent is from utility and maintenance savings. Of course, many of these benefits will require a data-driven view of the space — which is where indoor sensing comes in.
The vendor landscape for indoor space sensor technology is nascent. There are a variety of technologies being employed, and customers may be confused about how they differ. But the market is heating up, and there have been a few notable acquisitions. WeWork just bought Teem, which makes a workplace management software platform that can be supplemented with indoor space sensing data. And Convene, which focuses on conference space but also offers co-working facilities, purchased Beco this year. JLL Spark recently invested in VergeSense, which, like Beco, makes indoor space sensors and a technology platform to use the data.
Stok also describes the changing demands and expectations in offices, and how that changes how they're designed and operated: “With the 21st century’s constantly evolving technological requirements, as well as cultural shifts in office life, workspaces must easily adapt to new physical configurations. [High-performing buildings] provide that flexibility by using modular systems, personal environment controls, and multi-use spaces.“ Adding a point about “technology” would fit right in.
The Urban Land Institute, in its Emerging Trends in Real Estate report for the U.S. and Canada, adds “functional obsolescence is likely to lead to the need for new office space to meet changing tenant demands." But can technology make it easier to know how to repurpose space, obviating the need to build from the ground up?
Between increased customer interest in this technology and the investments and M&A activity, it is important to understand how this technology can positively impact building owners, operators and occupants. Once they collect these streams of data, what can they do with it?
Space utilization
Most offices are too large for their intended purpose or the space has been misallocated. Conference rooms are one battleground, as many office workers can attest. CBRE found that there is a significant misallocation between conference room size and meeting size. While many conference rooms hold six to eight people, about half of all meetings are with two or three participants.
Space utilization offers a few opportunities.
First, offices can determine how they use their space to more accurately estimate how much they need. There may be an opportunity to downsize, which saves money on rent and facility operations. JLL’s 3-30-300 principle shows that the average cost of rent is $30 per square foot per year, but it can be at least $70 in San Francisco and New York. Additionally, data about actual usage of a space can be used to redesign it to be more productive for the occupants.
Before there were sensors to measure these data streams in real time, office managers had to guess or manually observe how an office was being used. Both tend to be inaccurate. Reducing data collection errors requires more staff to spend more time observing space being used. This is costly and doesn’t scale.
HVAC optimization
Even with a modern building automation system, temperature setpoints usually are fairly static. When they aren’t, they change due to weather or energy consumption — and sometimes based on actual occupancy. Moreover, the process to change setpoints and then change them back usually requires some human oversight.
However, if sensors can detect where people are located, they can be changed dynamically based on usage patterns in real time. Space can be heated, cooled and ventilated based on real-time data and historical trends on when spaces typically are occupied. This is more accurate than using calendar data, for example, because many meetings may never occur or end early. Moreover, indoor space data may reduce the cost an effort to commission (and recommission) large office buildings, as the building could learn patterns of use instead of being programmed by a technician based on estimates and averages.
Condition-based facility management
In many cases, managing a facility is a series of schedule-based tasks. Bathrooms are cleaned every day, trash is picked up every other day, and common HVAC procedures, like changing air filters, occur every three to six months. These schedules are based on general historic trends, vendor guidance, and common knowledge within the industry. But they are averages, and they do not always apply to every building.
With indoor space data, these facility management tasks can be condition-based. For example, a bathroom is cleaned when it has been used. In the Edge, a smart building in Amsterdam, janitorial staff is equipped with an app that gives specific data on how spaces were used each day, enabling them to address only the areas that require cleaning. For smaller commercial buildings that may not have on-site facility staff (such as retail and restaurant buildings), indoor space sensing may reduce truck rolls for scheduled maintenance.
Optimized leases
Many commercial building leases run for 10 or more years, which may be too long for a smaller firm that is more focused on the quarters and years ahead. This happens to be why co-working providers first focused on smaller firms. The co-working model has become mainstream because tenants large and small desire more flexibility in their leases.
Subletting may allow for a tenant to move early, but better data about how spaces are used may enable landlords to provide more flexible lease terms. If tracking of space can be automated and connected to a booking system, conference rooms could be “leased” for hours (not years) with low overhead.
Additionally, indoor space data will simplify the leasing process by providing better information to prospective tenants. This will be adopted first in restaurant and retail environments, when a coffee shop can pick a location that has great morning traffic (e.g., the exit on the east side of the building) and a bar can find the spot with better crowds after work (e.g., the exit on the west side of the building). The key will be to identify traffic and use patterns that align with the particular storefront offering.
Fire, safety and security
In the event of an emergency, first responders need to know how many people are in a building and where they are located. Access control solutions typically focus on securing a perimeter, but also could track movement within a space after hours, or in a restricted area.
In a recent report from Georgia Tech on smart building technology, the authors highlight two uses for the school’s real-time space monitoring solution: “During an emergency (fire, shooting, etc.), the police department can use the web to understand which buildings/rooms close to the incident site still have people in them, and dispatch police force and first aid accordingly.“ In addition, “If the access control system shows there should not be anyone in the building/room but the web shows there is, the police can identify a potential problem.“
Space utilization data is a supplemental layer that can be used to provide even more visibility to operators and first responders. This may happen first in highly secure facilities, but as the technology becomes more mature, there will be significant value to including indoor space sensing in solutions sold to multifamily buildings, in addition to schools, universities and hospitals.
Personalized office
Beyond improving some of the traditional operating procedures in commercial buildings, indoor space sensing technology may enable more significant changes. It may fundamentally change how occupants interact with their spaces.
As occupants are able to define preferences about the type of space they need, or the features they require to be productive, indoor space sensing can direct them to the right space, or quickly modify the lighting and temperature to align with their needs. For employers with multiple offices in a given metro area, employees will easily pick an office each day and get the same consistent experience. There have been a variety of reports about the challenges with open offices (see here and here), but the model is here to stay. Better sensing technology may be the difference between high- and low-functioning spaces.
It’s likely that other use cases will emerge in the near future, helping to make offices more productive for occupants, flexible for tenants, and profitable for their owners. But even the use cases that are clear today should be compelling enough for owners to dedicate time to learn about the technology and vendor landscape, invest in pilots, and establish feedback loops with their tenants and occupants to understand their interest in the technology.