This emerging technology’s boundless potential for real estate management
Service has always been at the forefront of the property manager’s goals. Everything she or he does, no matter how oriented to nuts and bolts, is done in service to the tenant, the resident, and the landlord. In short, service is the property manager’s stock in trade.
The ability to serve those various (and sometimes conflicting) stakeholders has been greatly enabled by new technological advancements, from building automation systems to app-packed cell phones, and even wearable tech. But this is only the start; as cool as all of the above are, they come to full fruition in the digital twin.
“A digital twin is a virtual representation of a process, product, or even a service,” says Kasara Smith, CPM, RPA, who is also a LEED Green Associate and director of property management for Cushman & Wakefield in Washington D.C., and chairs IREM’s Technology Advisory Board. “For property managers, digital twins would be really beneficial to bringing all of the building’s data points into a centralized platform, from occupancy sensors and access control to automation systems.”
And data collection is only the start of the benefits that will ultimately accrue to building management. According to a report from Deloitte, “Getting real-time data on how tenants are using the building gives you the capability to prove really useful and value-adding services for the tenants. With the data on maintenance sourced from smart sensors located throughout the building, downtime is reduced, as are costs. In addition, the tenant experience is enhanced.”
“The potential for this technology in property management is boundless,” says IREM Innovator-in-Residence James Scott, who believes that the digital twin is the most important technology to be deployed in the real estate industry in recent times. However, he adds that it will still take some time before we see its widespread adoption. “It’s probably at least three to five years from being a standard technology across all of our buildings,” says Scott, who is a card-carrying fan of digital twin technology.
The extended horizon to full integration is due to a number of factors, including the retrofitting of older buildings with numerous Internet of Things (IoT) sensors, the cost factor (more on that shortly), and the widespread rollout of 5G connectivity. “And while we are all seeing 5G being advertised on TV, its full implementation as a standard will take a number of years,” Scott says.
Most likely, the realization of such complete integration will come in stages. “We’ve seen the evolution of what we now call the smart building, which was the first stage,” he says. “The next stage is the integration of 5G, IoT, big data, cloud computing, and AI technology with advanced data analytic capabilities to create a platform for AI-enabled building management systems.”
The final stage, he says, will be a “fully functional digital-twin platform encompassing all of the up-to-the-minute data and smart-building technologies with scenario forecasting and predictive capabilities. This will not only let us know what’s taking place in a building at that precise moment, but it will also tell us what’s most likely to happen in that building in the future.”
The irony is that, while we’re now measuring the coming availability of this capability in terms of years, the concept itself has been around for decades.
Giving birth to twins
The original idea for digital twins was born at NASA, back in the Apollo moon-landing era. “NASA mission controllers needed to rapidly adapt and modify their simulations to match the same conditions on the spacecraft in orbit so that they could experiment and verify the different strategies required to bring the astronauts home,” Scott explains. It’s been utilized in the intervening years by the aircraft industry to test components, and it’s even found applications in health care. Interestingly, some of the newer players to enter the marketplace are video game companies, which makes sense, with their need to enhance their capabilities to create virtual parallel universes.
In a sense, the foundational aspects of digital twins are here and now. Those IoT sensors are already making their way into new construction as well as some existing buildings, providing the data points that Smith referenced.
“Our teams use forms of digital twins every day,” says Thano Lambrinos, senior vice president of digital buildings, experiences & innovation at QuadReal Property Group in Toronto. “Your building automation system, for example, is a digital representation of your air-handling units, chillers, pumps, and various other equipment packages.” Ditto for your lighting controls, in place to “provide the ability to understand location, status, and to dim lights or turn them on and off.”
He adds the stacking plan as a representation of your leasing. “Digital twins take all of those disparate digital systems and integrate them to better correlate data sets and overlay analytics to get even further enhanced insights into your business. In that respect, the real estate industry is still extremely early in the journey.”
The ubiquitous cost factor
Once fully realized in the industry, the technology will be applicable to virtually all the major food groups, from office and multifamily to retail and medical. But not all of the boats will rise simultaneously. As is typically the case with new technology entering the market, pricing for these new capabilities will be steep at first, but the concept is still so new that putting a price tag on it is difficult, Lambrinos says.
A recent Bisnow article pinned the growth of digital twins at just over $48 billion globally by 2026, but little of that will be reflected in existing building retrofits, at least not until those costs start to come down. Scott definitely believes that to be true.
“The cost of the technology is extremely high at the moment, with only very high-end Class A office buildings seeing implementation,” he says. “But as more players enter the market, it will inevitably mean that prices will drop, and we’ll see the technology filter into more everyday types of properties.”
“Many PropTech company cost models are prohibitive,” Lambrinos says. But time will apply downward pressure on that, as the technology slowly becomes more commonplace. “There are vendors who are now starting to adjust their practices to be more conducive to scale and customers of every size, and I think we’ll see this trend progress.”
So, the bigger players will get first dibs on the technology, given their Class A assets, their larger bankrolls, and their ability to spread the expenses over more years and properties. “I don’t see digital twins being adopted in property management overnight,” says Smith, who oversees an office portfolio of one million square feet. “The infrastructure for sensors and building systems needs to be in place before a twin can be fully realized.” Shorter-term adoption will come from the investor/developer community on the “cutting edge of tech.”
Smith adds that the industry’s focus the past year on battening down the hatches in the face of COVID-19 has pushed interest in twins to the back burner. Scott agrees, at least on the property management side. However, software developers have been making huge strides with their products and their capabilities, he says.
Now that we as an industry are once again forward-facing, particular adaptations will also become a function of the type of company doing the adoption. “Third-party management firms would have to sell the concept to their clients,” Smith says. But an owner-operator can choose the number of buildings, the region, or the entire portfolio over which to spread the cost.
Now for the payoff
As Deloitte indicated, when the technology is ultimately in the hands of all, or at least some, in the ownership/management community, there’s little doubt that the payoff will justify the wait.
“There are significant opportunities with this technology for real estate as a broad industry, as well as property managers specifically,” says Lambrinos. “Having all building operational information on a single platform could create incredible efficiencies and insights.
“Overlay advanced analytics, and a property manager could have the building HVAC system adjust in real time to maximize comfort and energy efficiency, depending on how many people are in a room and based on air-quality metrics,” he continues. “The opportunities are significant, and seemingly endless across asset classes and building sizes.”
“5G will be a major factor in powering the infrastructure of sensors and data points in the digital twin,” Scott says. “5G is 100 times the speed of the current standard with 100 times the connectivity.” Add to that wearable technology—the watches and bracelets—“and you can achieve the ‘Holy Grail’ of productivity, curated down to the individual level.” The building, he explains, will actually adjust to the occupant, tweaking lighting and HVAC to individual zones, all under the watchful eye of the twin-enhanced property manager.
And of course, as Smith adds, the operations team can troubleshoot remotely. “If my chief engineer gets a call about an HVAC issue on a Saturday night, he could access the digital twin on his computer and troubleshoot the issue from a distance.”
This is why we can dispel a fear common with all new technologies: “Digital twins won’t remove the property manager’s job,” Scott explains. “They’ll facilitate it.”
Of course, we’ve seen the progression through technological advancement and adaptability before. One need only think of the strides in mobile communications we’ve made since cell phones were as big as shoeboxes.
“Now they can take videos and provide internet access,” Scott says, and some of us can essentially run our office from our phones. Pushing the timeline out to the day of universal acceptance, he projects that, “Five years from now, digital twins will be used across the board. They’ll be the building standard.“
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