Maximizing Resource Utilization in Your Smart Building

Why Smart Buildings Still Waste Resources

Smart building technologies increasingly power Class A commercial real estate (CRE) portfolios, yet many properties still suffer from inefficiencies, hidden costs, and operational risks. Many CRE owners lack an enterprise IT mandate, leaving asset managers and third-party property managers responsible for overseeing building systems, vendor relationships, and security measures without a standardized strategy across their portfolios.

Without centralized oversight, critical inefficiencies arise:

• Vendor redundancy—Properties often rely on different contractors for the same services, leading to billing inconsistencies and inflated operational costs.
• Reactive maintenance—Many buildings still follow a break-fix model, shortening equipment lifecycles and producing expensive emergency repairs.
• Cybersecurity vulnerabilities—Third-party vendors often have unrestricted access to building networks, increasing cyber risk exposure and insurance premiums.
• Underutilized building data—Many CRE firms have data-rich but insight-poor operations, missing opportunities to optimize performance and reduce waste.

These inefficiencies aren’t just operational burdens—They directly impact net operating income (NOI). However, a shift toward managed services enables CRE portfolios to eliminate waste, extend asset lifecycles, and scale operational efficiency without additional headcount.

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The Hidden Costs of Decentralized CRE Operations

Many CRE owners view their buildings as individual assets rather than part of an interconnected portfolio. While this allows for local decision-making, it creates inefficiencies in vendor management, maintenance strategies, and cybersecurity enforcement, increasing operational costs.

For example, a commercial office portfolio with multiple properties across different markets struggled with vendor inconsistencies and reactive maintenance cycles. Each building relied on different service providers for OT support, leading to billing discrepancies, unpredictable service quality, and gaps in security enforcement.

The financial impact of these inefficiencies is significant. According to the U.S. Department of Energy, predictive maintenance can reduce maintenance costs by 25-30% while cutting equipment downtime by 35-45%, leading to substantial operational savings. Additionally, Schneider Electric reports that preventive maintenance strategies can save 12-18% compared to reactive maintenance models. When applied across a portfolio, these savings translate into $0.50 to $1.00 per square foot in annual savings, directly improving NOI.

After transitioning to a centralized managed services model, the portfolio achieved:

? Standardized vendor oversight, reducing contract redundancies and improving service accountability.

? Improved response times by streamlining remote access and troubleshooting across all locations.

? Better risk mitigation, ensuring all buildings adhered to a consistent cybersecurity and maintenance framework.

This example highlights a common challenge: when CRE portfolios lack a unified OT strategy, costs escalate, operational risks increase, and efficiency opportunities are lost. Asset managers can cut waste, improve system reliability, and ultimately enhance NOI by centralizing building operations through a managed services approach.

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Optimizing Staffing Without Increasing Costs

One of the biggest challenges in CRE operations is staffing constraints. Building engineers and property managers are stretched thin, managing tenant needs, vendor coordination, and system troubleshooting—all while lacking a unified platform for secure remote access and system monitoring.

Common inefficiencies in decentralized staffing models:

• Onsite teams handle vendor access manually, leading to delays and security risks.
• Engineers troubleshoot system issues instead of focusing on tenant satisfaction and long-term asset performance.
• Third-party vendors have inconsistent security standards, exposing buildings to potential breaches and compliance failures.

Managed services offload these burdens by providing centralized vendor oversight, secure remote access, and continuous system monitoring—allowing in-house teams to focus on higher-value responsibilities.

?? Case Study: A multi-market REIT transitioned from property-managed vendor access to a portfolio-wide managed services model, improving consistency in remote access, vendor oversight, and cybersecurity compliance.

The results:

? Faster vendor onboarding reduced delays and improved service response times across multiple properties.

? Optimized staffing allocation allowed on-site teams to focus on tenant operations rather than manual system oversight.

? Strengthened security compliance by implementing centralized access policies and proactive monitoring, mitigating vendor-related cyber risks.

The lesson? Managed services don’t replace teams—They empower them to work smarter.

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Extending Asset Lifecycles with Predictive Maintenance

Many CRE portfolios still operate on a reactive maintenance model, where issues are fixed only after they become failures. This leads to increased downtime, higher repair costs, and premature asset replacements.

Key financial risks of reactive maintenance:

• Emergency repairs increase annual operational expense (OpEx) by 15-30%, costing up to $1.00 per square foot annually.
• Poor maintenance tracking shortens asset lifecycles by 20-40%, forcing premature capital expenditures.
• HVAC and system inefficiencies increase energy waste by 10-20%, reducing NOI.

Predictive maintenance powered by real-time asset monitoring can prevent costly failures, improve asset longevity, and optimize repair schedules, all while reducing the burden on on-site staff.

?? Case Study: A CRE portfolio implemented managed services for remote system monitoring and risk detection, enabling early identification of OT network issues before they caused operational disruptions.

? Improved asset reliability by proactively addressing system vulnerabilities across multiple buildings.

? Reduced emergency repair incidents by shifting from a reactive maintenance model to a proactive, monitored approach.

? Enhanced operational continuity, ensuring building systems remained online and tenants experienced fewer service disruptions.

By replacing a reactive approach with predictive monitoring, asset managers can extend the life of critical systems while reducing OpEx.

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How Managed Services Directly Boost NOI

For Class A CRE owners without an enterprise IT mandate, inefficient operational management drains NOI. By adopting a managed services model, asset managers can:

? Reduce OpEx—Eliminate redundant vendor costs, optimize staffing, and lower emergency maintenance spending.

? Prevent insurance premium hikes—Centralized cybersecurity management reduces portfolio-wide risk exposure.

? Extend asset lifecycles—Minimizing repair costs and reducing capital replacement needs.

? Ensure scalable operations—Creating a repeatable model that applies best practices across all properties.

Rather than leaving property managers and vendors to operate independently, CRE firms can unify their approach with a proactive, cost-saving strategy.

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Final Takeaways: Action Steps for Asset Managers

?? Assess your current OT strategy—Are you missing opportunities to cut costs and improve efficiency?

?? Implement managed services for vendor oversight and system monitoring to eliminate redundancies.

?? Leverage predictive maintenance to prevent expensive failures and extend asset lifecycles.

How has decentralized OT management impacted your operational costs? Let’s discuss in the comments!

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