Technology in CRE Series: “Smart” Commercial Real Estate

It’s hard to believe that just a decade ago, commercial real estate looked entirely different than it does today. Real estate purchases often meant flying across the country, a briefcase in hand, to discuss purchasing options and negotiations. Property management meant on-site employees were working around the clock to keep building systems operational. Then, smart commercial real estate entered the scene. Technology has infiltrated nearly every part of the CRE buying, selling, and management process. 

It’s no secret that CRE is slower to change than other industries. But smart commercial real estate innovations have finally entered our industry, and there’s no looking back now. These technological advances are making life easier for investors, owners, and property managers. 

Here, we’re laying out some of the smart commercial real estate technology that is revolutionizing the market. You’ll learn common smart tech phrases and learn how integrating them into your business can help you streamline every part of CRE ownership and property management.

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What is Smart Tech? 

The name “SMART” tech is an acronym for “Self-Monitoring Analysis and Reporting Technology.” Over time, though, we’ve ditched the acronym and started using “smart tech” to refer to any technology that lets us interact with a system or device using the internet. It allows remote access to a variety of systems and devices and also enables those systems to “talk” to one another without the user’s direct input.

Some smart tech is voice-activated, allowing users to control many aspects of their home and office without lifting a finger.

The hope is to move towards entirely “smart cities,” where everything is controlled remotely: transportation, healthcare, energy, education, and infrastructure.

In the real estate sector, smart tech has become increasingly popular in the past decade. In both the residential and commercial arenas, developers and builders are integrating technology designed for user convenience, energy efficiency, and better communication between landlord and tenant.

Smart Tech in CRE Smart tech is quickly changing. In just a few years, it’s revolutionized the way the world does business. Real estate brokers, property managers, developers, and tenants are all using technology in ways we never dreamed of just a decade ago. The hope is to move towards entirely “smart cities,” where everything is controlled remotely: transportation, healthcare, energy, education, and infrastructure. As we look towards that tech-heavy future, smart buildings – and therefore smart commercial real estate and property management – are a key factor in making the future a reality. 

We’re already well on our way to that future. As developers build smart buildings and property managers integrate smart tech into building operations, we move towards greater overall connectivity.

Smart Commercial Real Estate: Terms to Know

Before we examine how you can utilize smart tech in your commercial real estate business, here are the terms you should know.

Artificial Intelligence

Artificial intelligence, or AI, is a computer application that not only completes tasks as programmed but also learns new behaviors. AI programs can mimic human behavior and predict future outcomes based on past data.


Automation is any technology designed to complete specific tasks without human intervention. Unlike AI, automated programs cannot learn from past data, and can only change operations if programmed by a person.

Building Operations

For the purpose of smart commercial real estate, building operations are anything associated with the management and oversight of commercial real estate property. This includes monitoring and maintenance of HVAC systems, plumbing, electrical, security systems, and other vital components of a building’s infrastructure.

Climate Control

Climate control is any system that regulates the temperature, humidity, and airflow in a building. Typically, this includes the HVAC system or other heating and cooling components.

Internet of Things

Internet of Things Nearly any device that can connect to WiFi and connect to other devices is a part of the Internet of Things, or IoT. Today, there are countless smart devices in our homes, cars, workplaces, and shopping centers. Nearly anything that both connects to the internet and can interact with other smart devices is part of the IoT.

We’ll talk about the Internet of Things more below, but you can do more reading about it in this Wired article.

Office Security

In terms of technology, office security means two things. First, it’s about using technology to protect the physical assets of your business: employee safety, equipment, and other valuable items. And second, it’s about protecting the digital assets as well: intellectual property, internet security, and the like.

Property Value

A real estate property value is the present financial worth of the real estate holding. For commercial real estate, property value is determined by several factors

      • Current market value
      • Current economic trends
      • Occupancy rates
      • Rental income rates

Whereas residential real estate values are based largely on supply, demand, and local economy, CRE property values rely more on the property’s potential to make a profit now and in the future.

Real Estate Technology

Real estate tech Real estate technology, sometimes called property technology or “proptech,” is a broad term used to describe any technology related to real estate. It could be online apps or services used by builders, owners, sellers, or property managers. Real estate technology can also mean the smart solutions inside a home or office. Anything that helps real estate professionals buy, sell, or manage real estate falls under the “real estate technology” umbrella.

There’s a great article from Forbes Magazine about proptech and smart commercial real estate here!

Smart Buildings

In terms of smart commercial real estate, smart buildings are properties that use technology to control systems throughout the building. These technologies share information and data through the Internet of Things to optimize efficiency throughout the building. 

Many developers are integrating smart systems into their new-build properties. But many developers and property managers are retrofitting their spaces with smart tech to make their buildings more efficient.

Smart Tech in Commercial Real Estate 

Smart tech is making business in all sectors easier and more efficient. In commercial real estate, smart tech is helping investors and property managers oversee operations more effectively. Real estate technology now reaches every part of the CRE industry, from investing and purchasing, to property management and tenant relations.

Commercial real estate professionals can benefit significantly from incorporating smart tech into their businesses. Brokers can utilize a myriad of client relationship management, virtual tours, and data analysis software options. CRE property managers can integrate smart commercial real estate systems into office or multifamily residential properties, reducing costs and conserving energy. And everyone benefits from time-saving smart devices that make our lives easier.

Commercial real estate professionals can benefit significantly from incorporating smart tech into their businesses.

Internet of Things and CRE 

We defined the Internet of Things (IoT) earlier as the interconnected network of smart-capable devices. But how does the Internet of Things help commercial real estate investors and property managers? In one word: efficiency.

The more smart devices your property has, the better your building’s ability to maximize efficiency. The real genius of the IoT is the ability of smart devices to take sensory input – sounds, voices, lights, temperature – and turn that information into hard data. Using that data, the Internet of Things then responds accordingly. One device takes input, translates that input into data, and then connects with other smart devices to make necessary adjustments.

IoT and CRE Smart buildings rely heavily on the Internet of Things to ensure all components work together. Sensors detect movement and turn on lights, and turn them off again when the movement stops. Smart thermostats detect changes in climate to keep the offices or living spaces perfectly heated or cooled. Smart speakers – like Amazon’s Alexa or Google Home – allow users to lock or unlock doors, turn on appliances, and control other electronic devices remotely from a smartphone. 

Every device in a building can be linked to complimenting devices, creating a network that optimizes efficiency. By integrating this technology, you can join the smart commercial real estate revolution.

The Internet of Things is helpful for nearly every CRE property type:


IoT-powered smart devices can help property managers identify potential maintenance issues before they arise. Sensors might detect a small leak by identifying an increase in water usage or a drop in water pressure. Other sensors might track air quality and alert you to a decrease in clean air, indicating a problem with your HVAC system. 

Smart devices can also connect with one another to ensure optimal temperatures in all units, alert to any fire or water emergencies, and keep your residents more secure through automated security systems.


There are many applications for the IoT in an office setting. Automatic lighting and heating/cooling systems can work through the IoT, connecting movement sensors and HVAC or lighting systems. By minimizing energy waste, you’ll decrease overall operation costs. Saving on energy is great for the planet, too.


The retail CRE sector is seeing some innovative approaches to IoT use. Automated systems work together to help business owners track supply shipments, manage inventory, speed up customer transactions, and even identify areas on the sales floor that prevent customer movement. 

Using various technology applications, IoT-supported systems maximize profits for retail businesses.


The industry and manufacturing sector have significantly benefited from real estate technology. In fact, the Internet of Things is so important in this industry that its applications are known as the “Industrial Internet of Things,” or IIoT.

The IIoT refers to any connected devices that automate, manage, or facilitate production. Networks of sensors, robots, computers, and other smart devices analyze every step of the manufacturing process, maximizing efficiency, and reducing downtime. Because of this efficiency, manufacturers can make more product, with less labor, at a faster rate, ultimately saving money and maximizing profits.

You can read more about the IIoT and its impacts on the manufacturing sector here

Smart Office Security Systems 

Today’s office tenants want to know their valuable businesses are secure. Property managers and building owners can put tenants’ minds at ease by incorporating high-tech security solutions into their properties.

Smart office security encompasses two parts: physical security and virtual security. 

Physical Security

As more and more companies move towards technologically advanced spaces, we see more security options than ever before. Moreover, these options allow users to watch over their homes and offices 24 hours a day, from anywhere they have internet access.

The Internet of Things keeps multiple systems connected, working together to protect your office. As such, security systems have evolved along with technology. Modern security systems work on a vast network of sensors, cameras, and other devices, and can be accessed remotely by authorized users.

There are a multitude of options for commercial real estate security systems. New builds are more likely to have high-tech, integrated security features. But even older buildings can add smart security systems relatively inexpensively. 

We should note here that security upgrades often fall to the owner to finance. Tenant laws in most states require at least basic security accommodations for tenants. But offering high-tech security options will make your building more attractive to higher-net worth tenants.

While each building owner and property manager are different, several popular smart security options are commonplace:

  • Interior and exterior cameras with motion-activated sensors and cloud video storage. Cameras activate when they sense movement, and all activity is backed up to the cloud, so you never have to worry about running out of storage. Some products also feature searchable video footage so that you can review incidents quickly. Many camera systems also allow authorized users to remotely access cloud videos and live video feeds from a mobile device. This way, you’ll be able to keep an eye on your property 24/7, from anywhere you have phone access.
  • Smart locks on both primary building and office doors. Gone are the days of changing the locks with every new tenant. Now, tenants can access their offices with a mobile app. And when the tenant leaves, it’s easy to reprogram the system.
  • Biometric security, using fingerprints or facial recognition to unlock doors. This ensures that only authorized tenants and guests enter the facility, and they’re less likely to be hacked.
  • Door and window sensors, which automatically activate a call to emergency services when triggered after hours.

Virtual Security and Cybersecurity

While smart systems and high-tech security features make like more convenient, they also present prime opportunities for hackers. As our homes and businesses become more connected, tech companies scramble to keep our virtual lives safe from attack. 

Property managers need to consider cybersecurity from two angles. 

CRE and cybersecutiry First, be vigilant about your own online activity, and take measures to protect your computer networks from attacks. Your devices contain a treasure trove of information for hackers: financial information, personal data from your tenants, email addresses and phone numbers, and so much more. Protect yourself with a VPN, anti-virus software, and a secure firewall.

Secondly, consider the virtual security of your tenants. If a hacker attacks integral smart infrastructure systems in your building, that could mean absolute chaos for your tenants. And unsecured networks leave individual businesses open to attacks, too. 

The bottom line? Create a cyber-attack prevention and reaction plan and work with an experienced IT professional to implement protective measures. 

Twenty-first-century office security is more than secure door locks and overnight security guards. It’s interconnected sensors and cameras, all protected by virtual security measures to keep everything running smoothly. 

Voice-Activated Smart Tech

Perhaps the most popular smart tech innovations are voice-activated smart devices, which are increasing in popularity in homes across America. These devices, including Amazon’s Alexa and the Google Home hub, are known as “Virtual Personal Assistants” or VPAs. They help residents control many facets of their everyday lives.

How do VPAs impact property management? A recent survey found that half of apartment renters own a VPA, and therefore want their apartments and businesses to accommodate these devices. Younger renters (those under the age of 35) are more likely to rent from a landlord who offers smart home services or a free smart home device.

Virtual Personal Assistants and Smart Devices

Virtual personal assistant Devices like Alexa or Google Home act as the central hub for other smart systems in an apartment, townhome, or office. For instance, if an apartment features smart lighting, a smart thermostat, and smart door locks, all of these systems can be controlled via the VPA (Alexa or Google Home). 

Because these systems are all connected – part of that Internet of Things we talked about earlier – they can be controlled remotely from a phone or tablet. User can activate them with voice commands (“Alexa, turn on the kitchen lights” or “Hey Google, turn the air conditioning to 72.”)

Because half of new renters will be bringing a VPA with them, property managers would be wise to consider making their properties compatible with these devices. Give potential renters an incentive to lease with you by providing smart-enabled lighting, security, door locks, heating and cooling, or other smart systems.

Smart Systems, VPAs, and CRE Property Management

Not only will smart-enabled systems attract new renters, but these systems will also lower your operating costs. Control vacant units from a centralized control panel, regulating temperatures and lights to keep utility costs low. And smart locks allow other staffers, potential tenants, and housekeeping staff to enter vacant units even if you’re not available.

Not only will smart-enabled systems attract new renters, but these systems will also lower your operating costs.

While there are valid security concerns associated with smart devices and VPAs, they seem to be gaining in popularity. Providing smart-enabled living and workspaces for your tenants will make your property more desirable, particularly for younger generations entering the workforce.

Automation, Artificial Intelligence, and CRE Properties

As mentioned in our definitions, automation is a technology that completes tasks without human intervention. Artificial Intelligence (AI) not only completes these tasks but uses input to learn and predict future outcomes accurately. That is, AI technology seeks to create machines that act as humans do, learning behaviors, and changing to react to those behaviors.

While this might sound like a science fiction novel, automation and AI are very much here in our present world. And yes, they are making their way into the commercial real estate realm.

Automation and CRE

Automation has many applications in commercial real estate investing and property management. Primarily, automated services replace many menial tasks, freeing CRE professionals to pursue other things. For instance, some property managers use automated software to communicate with tenants, answer commonly asked questions, or take maintenance requests. Automation provides around-the-clock virtual assistants that can keep track of correspondence and connect with tenants in real-time.

Automated systems take care of many other repetitive office tasks, like invoicing tenants, sending out lease agreements and payment reminders, or reaching out to potential tenants. Using automated systems not only saves property management companies time but also reduces overhead costs.

Artificial Intelligence and CRE

Artificial Intelligence (AI) takes automation one step further. These programs not only complete recurring tasks but also to learn from the data to create new outcomes.

While this might sound like a science fiction novel, automation and AI are very much here in our present world.

In commercial real estate, artificial intelligence shows promise in several ways. For investors, AI programs can analyze data and predict which properties show the most income potential.

From a property management standpoint, CRE AI can scan potential tenant applications and determine which candidates are desirable renters.

These programs learn what works, what doesn’t, and then evolve to meet the changing demands of your business.

Automated CRE Systems: Heating, Cooling, Lights, and More

Automation and AI help manage overall operating expenses for CRE owners and property managers by overseeing various building systems. Many systems are automated, like heating and cooling, lighting, and security.

While Virtual Personal Assistants (VPAs, mentioned above) can control smart lighting and HVAC systems, there are plenty of other automated programs that help control building systems. Depending on the property type, automation can control everything from the building’s average temperature to water usage, energy consumption, and air quality. (Read more about largescale automated systems for office buildings below).

Automation and Client/Tenant Management 

Automation and client management Automation has transformed property management for many CRE professionals. Computers can now complete redundant tasks, like billing tenants, sending out reminders or late notices, and processing lease renewals. Property management software keeps track of all tenants and automatically contacts each one to keep payments and leases up to date.

Moreover, automated programs keep lines of communication open, without the need for a 24-hour assistant answering phone calls. Virtual assistants can take messages, answer common questions, and even schedule maintenance for your tenants. This frees up your time and budget to tend to more pressing matters and allows property managers to do more with less budget.

Automated CRE management software is a must for any real estate professional. There are many high-quality management products that help landlords and their staff track payments, communicate with clients, and send lease renewal reminders. Many applications even collect and analyze tenant data, helping you maximize your profits.

Here are a few considerations when choosing an automated property management software:

  • When choosing a property management automated system, it’s crucial to find one that is intuitive to use, mobile-friendly, and has all the tools you need to manage all your properties successfully. What works for one CRE property management company may not work for the others. In large part, choosing an automated software comes down to preference and productivity. Choose a program that minimizes your manual input, works with your business needs, and gives you the tools to maximize your profits and increase occupancy.
  • Is the program intuitive? Can you and your staff easily navigate the tools? If you select a program that is cumbersome to use and hard to understand, it’s likely to cause you more hassle than it’s worth.
  • Does the program integrate with other software programs you use? The automated system you choose should complement all other systems in your business. You don’t want a system that will work against what you already have in place. 
  • Is the system reliable, and is the company behind it solvent?
  • Is the program mobile-friendly? CRE professionals are always on the go, and we need to have the ability to do business from wherever we are. The program you choose should be easily accessible from your mobile device and have an app that your tenants can download.
  • Speaking of tenants, they have to like the program, too. If it’s difficult for your tenants to use, they won’t utilize the program. Instead, they’ll get in touch the old-fashioned way, calling and emailing when they need help. If that’s the case, you aren’t saving yourself any time or money. So make sure you get tenant feedback when instituting new automated management software.
  • Does the program do what you need it to do? Every property management team has different needs. Therefore, you need software that works with your team. Compare and contrast available software to find the one that will be the most effective for your business.

Keep in mind that most CRE property management software applications have a free trial period, so don’t hesitate to try a few on for size and find the one that fits your business.

Our professional property managers use several management applications to minimize the time we spend on mundane tasks. When they spend less time behind a desk, they can spend more time working directly with tenants, ensuring tenants and their clients are completely satisfied. It’s just one way we utilize automation and emerging technology here at CXRE.

How Smart Tech Impacts Property Value 

Property value is at the heart of our industry. Investors want to purchase properties with the most potential for profit. Owners want their properties to grow in value over time and want high-quality tenants to occupy the space. And property management professionals want to maintain high occupancy and keep tenants satisfied.

At the center of it all is the tenant. When the tenant is satisfied, everyone benefits. Smart tech is improving the lives of tenants and their customers, which in turn generates more significant profits for investors and property managers alike.

How Smart Tech, Automation, and AI Help Everyone

Smart tech is transforming the CRE industry for investors, owners, property managers, and tenants.

Smart Tech for Investors

Technology plays a huge role in helping investors identify and purchase CRE properties. Data analysis tools, for instance, help investors better understand a property’s potential for returns. And artificial intelligence within those programs can analyze your viewing and purchasing habits, and therefore learn to recommend properties that meet your financial goals.

Investors can also consider the emergence of “smart cities” when investing. As our cities become more connected, buildings that offer smart technology will be more appealing to tenants. Therefore, investors can look for technology trends, find properties that already have technology integrated into their spaces, and make smart investment decisions for the future.

Smart Tech for Owners

Smart tech helps owners track their property’s profitability from anywhere in the world. Data analytics programs and automated financial systems give owners virtual access to every property they own. From these applications, owners can see detailed reports about a building’s occupancy rates, annual returns, maintenance reports, and more. And best of all, most apps allow owners to access this data from a mobile phone or other handheld devices.

Smart Tech for Property Managers

Smart tech for property managers As we mentioned above, smart tech, automation, and AI have revolutionized the CRE property management industry. No longer do CRE property managers have to sit behind a desk, taking maintenance requests and sending paper bills to tenants. Smart commercial real estate has completely changed the way property managers do business.

Now, automated programs handle every mundane task in property management. These programs bill tenants, process payments, and even send out reminders about past-due payments and lease renewals. Automated assistants handle maintenance requests, alerting managers electronically if there’s a pressing issue.

Smart tech, automation, and AI have revolutionized the CRE property management industry.

But smart tech, automation, and AI are also helping property managers identify and secure high-quality tenants with less legwork. Property managers can list available space online and even create virtual walkthroughs for interested tenants. Plus, many programs can analyze applications, determining if the applicant would be a good fit for the space.

Once you find that high-quality tenant, you can use available management technology to keep in close contact and meet their needs in record time.

Smart Tech for Tenants

At CXRE, we have a tenant-centric approach that guides all we do. And we recognize that keeping up with the latest technology dramatically impacts the satisfaction of our tenants.

No matter what property type you own or manage, technology plays a role. For office buildings, technology keeps the building secure, both physically and virtually. Interconnected systems and high-speed internet capabilities allow businesses to work effectively. Automated HVAC and lighting minimize energy usage and protect the environment. 

Retail centers and restaurants want to give their customers the best possible service. As we mentioned above, automation, AI, and smart tech help business identify problem areas and create solutions to better serve customers. Smart tech can also integrate business systems, helping owners maximize both efficiency and profits.

And multifamily properties utilize technology in many different ways. Tenants can contact management about maintenance issues or other questions. Smart-enabled units allow tenants to hook up smart devices and remotely control HVAC systems, security, lights, and more. And advanced security systems keep everyone safe.

As technology changes, property managers and building owners must adapt to keep high-quality tenants happy where they are. Otherwise, they’ll move on to a more connected property, negatively impacting your property value.

Smart Tech and Property Values

Keeping tenants happy is at the heart of what we do as CRE professionals. Integrating smart tech into our buildings, operations, and management can help make our tenants’ lives easier.

Our tenant-centric approach helps us keep high-quality tenants longer, therefore increasing occupancy and increasing property value.

Smart tech plays a significant role in property values, especially as we enter a new decade. CRE property valuation varies depending on the method used, but many factors remain the same. We know that property value depends on several factors, including:

  • Building and lot size and location
  • Building age and condition
  • Number of units in the property
  • Average occupancy rate
  • Capitalization rate, potential for earnings, and operating expenses

A CRE property’s value depends largely on how many tenants you have, how much those tenants pay in rent, and the operating costs for your building as a whole.

Based on those factors, how does technology increase your property’s value?

Keeping tenants happy is at the heart of what we do as CRE professionals.

How Technology Impacts Property Value

Smart commercial real estate is valuable. The technology you use – and offer your tenants – impacts your property value in several ways. 

Attract Higher-End Tenants

Investing in or constructing a smart building will be more appealing to high-quality tenants. When businesses see that your property offers a multitude of technological advances that are far superior to the competition, they’ll pay prime dollar to rent your space.

Furthermore, giving your tenants easy access to security features, automated door locks, maintenance and property management communication, and other technology will make your property more desirable. If you can outshine the competition, you can demand higher rental rates, therefore increasing your profit margin and increasing property value.

Lower Overhead Costs

Automation, including automated HVAC and electric systems, means owners and property managers will spend less on overhead costs. Automated management systems can take care of bookkeeping tasks, therefore reducing labor costs. And smart security systems eliminate the need for overnight security staff.

Together, these add up to significant savings. Lower overhead and operating costs mean a higher property value.

Long-Term Tenants Mean Less Occupancy

Once you’ve secured high-quality tenants, you want to hold on to them as long as possible.  The best way to do that? A tenant-centric approach.

We believe that happy tenants are valuable tenants. When your tenants are satisfied with the accommodations you provide, they’re more likely to become long-term tenants. Providing cutting-edge technology for your tenants will keep them happy.

Quick Turnaround of Units

Even when you do your best to focus on your tenants’ satisfaction, you’ll inevitably have some who move on. Technology can help with this process, too.

Automated management software can list available properties to multiple outlets, all managed from one central hub. This saves property managers the time and effort required to sort through multiple websites, looking for leads.

Secondly, automation and AI can collect digital applications and highlight tenants best suited for your property.

Finally, you can create virtual tours and 3D floorplans, allowing interested renters to see your property remotely. Imagine the time you’ll save if you don’t have to show available properties to everyone who calls. And when you do show the property in person, the technology you’ve integrated into the space will wow future renters, leading to faster leases and long-term tenants.

Low occupancy rates and fast turnarounds mean more revenue and higher property values.

Building Operations and Smart Tech 

Building operations require a tremendous amount of time, manpower, and cost. However, smart tech and smart commercial real estate are now changing building operations, trending towards automation. As more components of building operations become automated, owners and property managers see drastically reduced labor and operational costs. 

Building Automation Systems 

building automation systems A building automation system (BAS) is a centralized component controlling a building’s major systems, including HVAC, lighting, security, and fire safety, and more. The idea is to have one control panel for an entire building, with an automated system that minimizes cost.

Think of the programmable thermostat in your home. You can program the thermostat to adjust the temperature depending on the time of the day. Sensors then monitor your home’s climate, activating the heat or air conditioning based on your programmed preferences.

A BAS operates much the same way, but on a larger scale. Depending on the size of a building, owners and property managers may choose to have only a few systems on a BAS – HVAC and lighting are the most common – or multiple systems, including electricity, fire alarms, security systems, and more.

The idea is to have one control panel for an entire building, with an automated system that minimizes cost.

The system is automated to adjust these systems according to pre-set limits. For instance, a centralized system will turn off A/C on nights and weekends, when tenants are out of the office. Or a BAS might automate lights based on activity or occupancy.

These systems can also integrate with other smart systems, like movement sensors throughout the building. This way, if a system detects no movement in one particular area, it will notify the BAS, which will then shut off lights and lower HVAC usage in that area.

A BAS is ideal for large buildings because it drastically reduces energy usage, and therefore overall operational costs. Data suggests businesses can save as much as 30% on energy costs by installing a BAS.

Building Automation Systems, Property Management, and Smart Commercial Real Estate

Building automation systems make property management easier, too. Many systems can be controlled remotely from a smartphone or other handheld device. So if a tenant wants to go to the office on the weekend, the property manager can easily adjust the controls to create a comfortable environment, all without stepping foot inside the property.

These systems also generate data that property managers can use to determine exact operating costs. The BAS will show where and when energy usage is at its peak, when it’s at its lowest, and can help property managers adjust energy consumption as needed. 

Furthermore, many modern centralized automation systems monitor the building’s infrastructure and alert building operations staff of any irregularities. The system can detect emergencies, like a flood or a fire, and sound an alert. These immediate responses can save valuable time and money in the case of a disaster.

Building Automation Systems and Air Quality

Besides lowering costs and making life easier for owners and property managers, a BAS can also make life better for tenants. Large-scale building automation systems constantly monitor air quality and make adjustments to the HVAC and filtration systems as necessary. This not only makes for a healthier environment for tenants, but also ensures compliance with state and local air quality standards.

Building Operations and Smart Tech Compatibility

A centralized automated system isn’t just great for property managers. It makes life easier for tenants, too. Many of today’s building automation systems connect with other smart devices, working together on the Internet of Things. Together, these systems allow users to control everything remotely: lighting, heat, air, and even security systems and door locks.

When connected, individual tenants can control systems in their section of a building. Meanwhile, the property manager has access to the entire BAS as a whole in one centralized location. All of it can be accessed remotely, both by the tenant and the property manager. Smart commercial real estate is valuable for both owner and property manager.

Smart Tech and Building Operations Costs

Integrating smart technology and building automation systems into your property can be expensive. But the long-term savings are worth the cost.

Adding a BAS and other smart tech can reduce your energy costs by an average of 15%. That’s great news for owners and property managers who are trying to minimize operations costs and maximize their returns.

Let’s say there’s a major snowstorm in your area on a Tuesday, and most of the city shuts down come Wednesday morning. Many of the tenants and employees won’t be in the office. If that building is programmed to be 70 degrees during the workday, the building operations manager can remotely access the HVAC system and turn down the heat. In just one day, the energy savings can be substantial.

Likewise, when centralized systems turn off lights when no one is in a room, adjust temperatures depending on occupancy, and maximize other energy-saving actions, building operations costs are drastically reduced.

Integrating smart technology and building automation systems into your property can be expensive. But the long-term savings are worth the cost.

Finally, building automation systems and other smart tech can self-regulate, self-diagnose, and self-heal common infrastructure problems. As the system encounters an issue, it will run diagnostic software, identifying the glitch. Often, the system can correct the issue on its own. This represents considerable time and cost savings for the building operations team and property managers.

Yes, smart systems are an investment. But they pay for themselves in energy cost savings alone. Add to that tenant satisfaction and long-term leases as a result, and suddenly the investment seems like a wise choice.

Smart Tech and Going Green 

Commercial real estate properties account for an estimated 40% of all energy consumption and 70% of electricity usage in the United States. In this age of climate crisis, more companies are looking towards conservation, zero-carbon emissions, and energy efficiency. Smart commercial real estate is the wave of the future.

Smart tech enables us to limit energy usage and conserve resources. And as more state and local governments pass legislation demanding more energy-efficient workplaces, developers, builders, and property managers look to technology to meet the challenge.

Current Commercial Real Estate Energy Usage

Currently, buildings expend most of their energy on HVAC systems (35% of total building energy usage), 11% on lighting, and 18% on major appliances like water heaters, refrigerators, and dryers. Smart tech, including automated and AI systems, seek to reduce energy usage in these areas, transforming not only a building’s greenhouse gas emissions but also reducing building operations costs.

Smart Tech and CRE Energy Usage Reduction

Both businesses and residential properties are turning to smart tech to reduce our energy consumption. 

In private homes, devices like Amazon’s Alexa and Google Home help homeowners remotely control smart lighting, electronics, heating, and cooling. By programming our home’s vital systems and minimizing energy consumption, we can both lower out monthly utility costs and positively impact climate change.

Smart tech also helps multifamily complexes, retail centers, and office buildings control costs and lower energy emissions through centralized, remotely-controlled smart systems. Devices connected through the Internet of Things monitor occupancy, temperature, and other factors, and adjust energy usage accordingly. Virtual personal assistants can turn off appliances or turn up the air conditioning, all with a voice command.

Sensors can detect whether or not someone is in the main lobby, for instance, and lower the lights if the area is empty. Tenants can turn down the heat on warmer Spring days from a cell phone, or lock the door to an office from the comfort of their home. 

These may seem like small steps. But together, smart tech adds up to big, sweeping energy savings. 

Smart Cities and Smart Buildings

Smart cities Home and office building smart tech is just the beginning. Developers, city planners, and city governments are looking toward “smart cities” as the wave of the future. 

Smart technology would infiltrate every part of a city’s infrastructure, from traffic lights, public transportation, WiFi capabilities, and even sensor-lined trash cans. All these systems would work with real-time data to determine optimal energy usage, transit patterns, and public works routes.

And while smart cities might sound like something out of a science fiction movie, many cities around the world are already integrating these technologies. In fact, cities in North America and Europe will account for about half of the smart cities worldwide within the next ten years. 

To this end, developers, investors, and property owners should consider the smart city future when deciding which improvements to make. It’s likely that as we move towards smarter cities, smart buildings will have an advantage, as their systems can seamlessly connect to those offered by local municipalities.

Many developers are integrating world-class technology and energy efficiency into their construction. Keeping the future in mind is essential in this fast-paced world. Construction and renovation look towards smart tech to prepare for the future.

Legislation, Construction, and Smart Tech

More state and local governments are passing legislation limiting energy usage in both commercial and residential properties. California now requires single-family and multifamily buildings up to three stories to have a solar panel beginning this year.  A 2019 New York City law requires any building 25,000 square feet or larger to reduce their greenhouse emissions by 40% by the year 2030, and 80% by 2050. Washington State enacted a law requiring commercial buildings to meet state-specified energy reduction targets by 2029. 

Many other states and local municipalities have also passed legislation aimed at reducing energy usage and promoting renewable energy sources.

As such, developers, investors, and property managers are searching for ways to reduce energy usage and create sustainable energy solutions. 

Smart tech is one way CRE professionals can decrease their costs, reduce energy wastes, and meet tightening federal, state, and local environmental regulations. 

Smart Commercial Real Estate: FAQs

What is Smart Tech?

“Smart tech” is a general term referring to any technology with which humans can interact and manipulate. Automation, artificial intelligence, virtual personal assistants (like Amazon’s Alexa or Google Home), or large-scale building automation systems all fall under the umbrella of smart tech.

In real estate, smart tech can help control various systems, like lighting, HVAC, security, and more. Typically, smart systems can be accessed remotely, often from a smartphone or other handheld device.

What is the “Internet of Things”?

The “Internet of Things,” or IoT, refers to the network of WiFi-enabled devices that can communicate with one another. Anything that has WiFi capability and the ability to connect with other smart devices is part of the IoT.

How does smart tech fit into commercial real estate?

Smart tech has nearly unlimited applications for CRE. Investors can use smart tech – namely automated systems and artificial intelligence – to quickly identify properties and projects that meet their specifications and needs. These programs can weed out investment opportunities that don’t match an investor’s requirements, leaving opportunities that fit well within their investment aspirations. 

Developers, builders, and contractors can integrate smart tech into their buildings, giving tenants and property managers easy access to a variety of high-tech tools. Improvements like enhanced internet capabilities, smart-enabled lighting and HVAC systems, and centralized building automation systems are a few examples.

Property managers can use smart tech to control building systems remotely. They can also use automated software programs to contact tenants, screen potential tenants, receive and schedule maintenance requests, and more.

And finally, CRE tenants can use smart tech in their buildings to adjust lights, temperature, or even access their personalized security system. They can also access the property manager’s automated system via smartphone apps, making inquiries or maintenance requests remotely.

The short answer? Smart tech fits into CRE in many ways, saving everyone involved valuable time and money.

Should developers and builders keep smart tech in mind?

Yes! Technology is the future. Smart buildings are just the beginning. More and more “smart cities” are emerging worldwide, with many larger American cities integrating smart systems into their infrastructure. Soon, we’ll have free WiFi as we walk down the sidewalk; buses and trams that operate based on real-time traffic data; trash cans that alert public service workers when they’re full. And all of these will depend on smart buildings to integrate the systems seamlessly. 

By adding smart-enabled features to a building now, developers can ensure they are keeping up with demand in the future.

What smart solutions should an owner or property manager offer their tenants?

Every building and every tenant are different, so there’s no one-size-fits-all solution. However, studies show that there are some commonalities.

Most residential tenants (multifamily or single-family rentals) want access to high-speed internet, excellent cell phone coverage, and energy-efficient homes. Smart-enabled lighting, heating/cooling, and security systems, along with keyless entry technology, generally make a property more attractive to renters.

Retail and office tenants tend to look for efficient workspaces, highspeed internet capability, state-of-the-art technology, and excellent communication options.

The right smart tech really depends on your property type and your tenants.

How does smart tech help property management companies?

There are multiple options for property managers. First, smart tech helps property managers by first helping the tenants. Tenant communication – and all the mundane tasks that come along with tenant management – can be time-consuming. Automated systems can help property managers manage these tasks electronically. Tenants can connect with virtual assistants, who can answer commonly asked questions. These programs also take care of billing, bookkeeping, and lease reminders, among other tasks.

Secondly, smart tech can help property managers by minimizing the overall operating costs. Automated management systems, along with automated building systems, can lower both labor and utility expenses, increasing profitability.

Will my property value increase if I add smart tech?

Most likely. Several factors determine your property’s value. However, occupancy rates are often an important consideration in commercial real estate valuation. Therefore, if your building has long-term tenants, and high-value tenants, it’s going to be worth more.

That said, updating the technology in your building makes it more attractive to those high-end tenants. If renters see the value your building offers over the competition, your space will lease faster, for a higher rate, and tend to keep tenants longer.

Decreased occupancy rates mean an increase in your property’s value.

Plus, overall operating expenses factor in, too. If you can automate much of your infrastructure, you’ll keep your energy costs down, which lowers your building operations costs overall. This also factors into your property’s value.

Should I invest in a building automation system (BAS) for my property?

That depends on your space, your needs, and your budget. A building automation system is a good investment for most businesses. Depending on your budget, you might choose to automate only a few systems, like lighting and HVAC, or multiple systems, including security, water, and other infrastructure.

When considering whether to invest in a BAS, consider the cost savings. Over time, automated systems can save owners up to 40% on their energy costs. That’s a huge savings year over year. Plus, you’ll be saving time and have peace of mind as the BAS monitors all your building’s connected systems. 

Is smart tech worth the cost?

In most cases, yes. Of course, each building owner and manager must consider the costs and benefits. But smart tech can minimize energy usage, saving up to 40% on building utilities every year. You must also consider that upgrading your building’s technology will attract new, high-quality tenants who are more likely to sign long-term leases. 

Overall, most property owners find that the cost of installing and upgrading smart tech is worth the investment.

Can my building handle an automated system?

Depending on the age and location of your building, it’s possible you may have to upgrade your communications wiring and infrastructure to handle smart technology. Contact an IT professional to learn more about your building’s capabilities.

How can I install smart tech in my building or units?

Contact your IT professional. They will be able to discuss your options, give you a cost estimate, and install any smart tech your building needs. 


Want to learn more about smart commercial real estate, or find out the estimated value of your property? We can help! Contact one of our commercial real estate professionals at CXRE today!


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CXRE » Commercial Real Estate Investment » Technology in CRE Series: “Smart” Commercial Real Estate