The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
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NAREIM DIALOGUES FALL 2017 17 normal and acceptable in the property industry, but this fraction is larger than is considered normal in other industries (e.g., hospitality). Again, consider the TripAdvisor reviews. A property with 25% dissatisfaction might raise some eyebrows. This discrepancy is not a problem when information about personal experiences or indoor environmental conditions is hard to collect and difficult to share. However, this is changing, fast. We all know that the Internet is incredibly efficient at sharing experiences. "Likes", microblogs, and reviews allow individuals to broadcast their opinions, and they make personal experience visible. In parallel to advances in social factors, new technology offers new capabilities to measure and quantify the physical attributes of indoor environments that shape health and well-being. A new generation of sensors make it possible to "see" indoor environmental conditions like temperature, humidity, noise, light, and certain chemical pollutants. Consumers can purchase personal sensing devices and carry them wherever they go. Companies can deploy sensing networks across spaces, buildings, and even whole portfolios. Combined with cloud computing and advanced analytics, commercial sensing networks give asset managers the capability to understand the past, present, and future performance of portfolios, buildings, and spaces. Taken together, these innovations are quickly changing how information about companies and their properties is generated and communicated. In this new world of "transparency", asset owners are moving from information gatekeepers to participants in a rich, sometimes even chaotic, information ecosystem. In these emerging ecosystems, information flows in many directions driven an increasingly diverse set of interests and motivations. We can consider this emerging regime of transparency more deeply by taking air quality as an example. In the past, air quality has been measured by government agencies at carefully selected sites across a region. This information was used to measure compliance with environmental regulations, notably the Federal Clean Air Act. Given this focus, air quality data have been largely irrelevant for real estate asset owners. New technology is upending these conventions. Today, it is possible to array relatively low cost, high quality environmental sensors across a city – such as on kiosks, light posts, and other infrastructure – combined with sensors on a variety of mobile platforms – typically cars, trucks, buses, and other vehicles. These distributed outdoor sensing networks generate hyper-local information about air pollution, literally bringing quantitative measurements to the doorstep of individual properties. The resulting fine-grained data show that local conditions can vary widely from regional averages. Research by Aclima, Inc. and its partners have shown local hotspots that are frequently more than 5-times regional averages. In other words, these new types of data show that some locations experience "Code Red" days much more frequently than others. These new data illustrate the consequences of new technology that makes traditionally invisible performance dimensions visible. The variation has always been present in the environment; however, it has not been actionable or even relevant to asset owners. Today, new technology makes this variation visible and easy to communicate. This change should motivate asset owners to evaluate the consequences for property value and operation. The implications of the data are not cut and dry. Variation can be positive or negative for any particular property. For example, high pollution levels near a busy intersection with idling truck traffic may suggest the need to actively manage properties to protect occupants for above average levels of outdoor pollution. Or, alternatively, a property in a relatively low pollution area may be able to increase its use of outdoor air to reduce energy consumption. Depending on the circumstances, the data may suggest new risks or opportunities. 1 In case you're wondering about the math. Assuming that the likelihood of encountering satisfying conditions is statistically random, we have a 4 out of 5 chance of be satisfied when visiting any given code-compliant facility. Given these odds, our chance of not encountering a dissatisfying facility drops to <1% after visiting six different facilities. " The combination of changing expectations and readily accessible tools to share experiences challenges long-standing practices in the property industry." ©iStock.com/SasinParaksa