There has been a surge of recent interest surrounding the idea of “connecting" a building to the Internet. As we have discussed in other issues of the Advisory, the concept of an intelligent building has been around for quite some time. However, only in the last year has the realization dawned that the Internet – a powerful interconnected network -- will act as a catalyst for the next generation of smart building applications.

If anyone were to ask what we thought might be the "next big thing" in Commercial Real Estate automation, the answer would be Building Automation. Because the Internet has created an open platform for various devices to be "connected", the idea of Building Automation is quickly advancing to another level. If you consider the Internet as the wide area network and all of the various electronic devices found in a building as Internet appliances, than someday soon Network Administrators will find parking gates and smoke detectors connected to their networks just like they see workstations and printers connected today.

As one can imagine, the potential that this interconnected network, the Internet, has introduced to us is really only a few years old. While most people are still just figuring out how to create a website or Intranet, some of the most sophisticated companies in our industry are working on taking this networked infrastructure concept to the next level. If you think about how manual and paper-intensive the operations of our buildings are, it is not hard to imagine what happens when IP (Internet Protocol)-based parking gates automatically communicate with accounting systems. These new tools basically have the ability to change almost every aspect of property management -- from security to concierge services.

One of the biggest challenges over the next 3-5 years will be the extraordinary amount of education that will need to take place. Today, many infrastructure decisions are made by a single engineer, one project at a time. Since the real economies of scale take place when you consider larger portfolios, it is not hard to understand why this issue will soon find its way into the IT department. Additionally, since many of these proprietary, engineer-type systems are now gravitating to the Internet, they involve an understanding of computers, networks and IP. Since many engineers do not have this knowledge, the IT professionals will likely have to be involved. Finally, the ultimate goal is to create a seamless, integrated system as opposed to disparate systems, making IP and the network the foundation for true integration.

As we look to the future, it will not be unusual to see the following scenario unfold…A building is not performing well; a team is dispatched to install a number of IP-based Internet appliances ranging from parking gates to smoke detectors. The building is then connected to an operations center via the Internet. This NASA-style facility is capable of running hundreds, if not thousands, of facilities in ways never imagined. It does not take an analyst long to understand the financial benefits when this type of efficiency is introduced. The real irony is that not only will tremendous efficiencies be realized, but customer satisfaction will also rise dramatically. Where once the on-site property management office closed at 5:00 PM, the call center is now available 24 hours a day, 7 days a week. With the correctly configured infrastructure, those call center representatives will be able to deliver service as if they were just down the hall.

Realcomm 2004 in San Francisco will feature a number of new companies and ideas focused on the very exciting concept of a Net-Building (a phrase recently coined by Cisco Systems). If your organization has been operating its Commercial Real Estate the same way for the past 50 years, then you will not want to miss this event and the many discussions and demonstrations on the future of our next-generation buildings.