Intro to IoT in PropTech
This is another one of our back-to-basics series and I’m happy to have @ConnellMcGill of Enertiv helping me co-author this series of posts on IoT.
Let’s dig into some definitions and concepts around IoT and what it can do in commercial property.
To begin, I assume most of you know that IoT stands for “Internet of Things”.
If you like Wikipedia (which I do), then here you go:
The Internet of things (IoT) is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.
Translation — Stuff connected to the internet.
Sensors, phones, water monitors, thermostats, door locks, cameras, lights, smart speakers, your TV, your watch, your doorbell, your sprinklers, your grill, coffee makers, yoga mats, and on and on.
If it can connect to Wifi or Bluetooth (or other protocols we will explain later), then it’s an IoT device.
In the world of PropTech, you generally divide the IoT landscape into two categories: 1 = Tenant-Facing IoT vs 2 = Back Office/Industrial IoT
The back office stuff is often referred to as Industrial IoT. Whereas the tenant facing IoT is all the smart speakers and thermostats you already know well.
A nice British lady explains some of the concepts here. And Wired has a brief intro to IoT in the manufacturing industry.
Tenant IoT
The key to tenant-facing IoT is essentially the tenant experience within a given property.
The theory goes — “If my tenant can have a more comfortable or seamless experience in their unit by setting temperatures, lighting, access control, or other aspects of every day life, then I will be able to charge rent premiums or retain my tenants better than competitors, etc.”
Time will tell how much that turns out to be true, but you can probably see how that narrative applies primarily to Class “A” apartments or office or retail or whatever property type. We’ll get into special cases about student housing, seniors housing, manufacturing, and other niche products elsewhere.
IIoT
For back office or Industrial (or sometimes “Commercial”) IoT, you think about the systems that control a building — HVAC, Power, Water/Plumbing, etc. All of the building management systems and controls will fall here.
The big goal here is to be able to predict and control the costs of ongoing and preventative maintenance for your building’s systems. If you can capture performance, detect pre-failure conditions in equipment, detect leaks or faults, sense deviations of temperature or humidity, verify third party maintenance, or a handful of other-highly detectable occurrences, you can potentially save an owner thousands of dollars per year (or more) on maintenance or CapEx.
“Crossover” IoT
There are some types of IoT that touch both the tenant and the building operations. Think about things like secure access where a tenant has access to the building, its amenities, and their units with only their phone or simply their presence (more on that later).
We’ll call these Crossover IoT for this series.
Benefits
Hopefully you can see how each of these three types of IoT can positively impact the building experience for both the tenant and the property management team (or owner).
The more you can customize and automate your experience, the more you get done, the less you worry about mundane and repeatable tasks, the less energy you use, and on and on. Preventative maintenance (hypothetically) falls here and it should be obvious that running the building more efficiently through this data collection and reporting will affect those pesky tenant issues like elevator problems, hot/cold issues, etc.
We’ll dig more into the use cases and success stories as we dig into the types and structures in future articles (see below)
Challenges
As with any technology, IoT has faced some headwinds to get adoption.
First off, some companies started off with sensors being connected to WiFi and quickly ate up bandwidth and just destroyed internet capabilities of tenants. So, many moved to other protocols I’ll detail at a high level below.
Data security is (and for the foreseeable future, will be) an issue. The more we add devices to collect and analyze spatial and environmental data, the more vulnerable we will be to having that data hacked.
There is also the issue of powering these devices. Certain batteries can be (MAY BE?) fire hazards and putting them on wood doors is not compliant with most fire marshal codes. Or you could just wire power to everything, but that seems financially untenable with the ever-increasing numbers of devices per apartment/floor.
As with anything that has hardware, you have to install these devices and their control hubs and pay electricians to do so. Then you have to monitor them and keep them running.
And finally, you need a central system (“hub”) to control everything. Imagine opening an app for your lights, then closing it, and then opening an app for your thermostat. Then you close it and open an app to let someone in the door remotely. Close that one and open another app to change the song playing or turn down the music. Not fun. There needs to be one hub to control them all.
Technology
Years ago, as the technology was new, it was tough to get high-quality hardware to detect things like humidity, air quality, proximity, or just send and receive signals from mobile devices. Now, the hardware is so cheap and effective that you can get most of these sensors off the shelf for under $20.
I like this intro to the different types of sensors.
And as people realized that taking up WiFi bandwidth was a problem and that using unreliable Bluetooth had its challenges, IoT sensors started communicating across different protocols. The most popular are ZWave and Zigbee (just backed by Google, Amazon, and Apple) and we’ll touch on those more later.
Our Guide
This will be the first in a series of posts designed to familiarize the property industry with IoT and its capabilities. This article will act as your primer and launching point for the rest of the series.
In this series, we’ll cover the following topics:
- Tenant-Facing vs Back Office IoT
- Data Security and IoT
- Preventative Maintenance and IoT
- Hardware vs Software in IoT
- Back Office IoT in CRE (Market Overview)
- Smart Apartment and Tenant-Facing IoT (Market Overview)
- Vetting IoT Vendors and the Questions to Ask
- Use Cases for IoT in Office and Retail
Something else you are curious about or would like to learn more about? Drop me a note at [email protected]