Are you familiar with the term the “Internet of Things” (IoT)? Generally, it refers to the networking of physical objects — such as mobile devices, vehicles and buildings — embedded with electronics, software, sensors and Internet connectivity to collect, exchange and apply data. Information technology research firm Gartner predicts that smart commercial buildings will be the highest user of the IoT until 2017, at which point smart homes will take the lead globally, with just over one billion connected objects in 2018. There’s no denying that the IoT is changing the real estate industry, but how?
IoT and commercial real estate
Commercial buildings are increasingly adopting the IoT to improve tenant satisfaction (and, in turn, retention), reduce energy costs, and improve spatial management and building maintenance. For example, wireless sensors can provide cost-effective enhanced security for individual units, and elevators can recognize tenants’ voices when they request floors. Gartner estimates that security cameras, security webcams and indoor LEDs will represent 24% of the IoT market for smart commercial buildings in 2016.
The IoT also facilitates the collection of critical data that can give building owners a holistic view of facilities management and energy usage, allowing, for example, lights and heat to be turned off in spaces not currently in use. One company has launched an Uber-like service for cleaners, helpers and handymen, so owners can use an app to deploy such services on an as-needed basis.
The rich data also can aid real estate investors in their decision making. Investors can more easily compare properties and uncover areas ripe for savings.
IoT and residential real estate
As indicated by Gartner’s research, the IoT is rapidly gaining ground in homes, too. Consumer IoT applications include smart TVs and other appliances, smart thermostats and home security systems. Small Bluetooth-powered devices known as beacons can be mounted almost anywhere to track residents’ movements to automatically turn on lights or music. Beacons can also transmit information about the activities of an older adult to a caregiver or monitoring service. Homebuilders that make smart devices standard in their homes may have a competitive advantage over less tech-savvy competitors.
Additionally, the IoT is coming into play before consumers move into their homes. For example, real estate agents and development salespeople can use 3D printer technology to produce scale models of architects’ plans for potential buyers. In addition, various software applications let consumers experiment with interior decorating options before a home has even been constructed.
The future is now
If you haven’t already gotten onboard the rocket ship that is the IoT, now is the time. Learning more about some of these technologies and using them in your real estate portfolio can help propel you ahead of other businesses. The IoT is bringing homes and commercial buildings ever closer to the world envisioned by the creators of The Jetsons, and you don’t want to be left behind.