Harnessing IoT sensors for leasing and space planning
By Lindsay Pick
In today’s ever-evolving business landscape, large tenants face the challenge of uncertainty regarding their real estate needs. Conventional wisdom suggests that less real estate is better in this post-pandemic world. But then, conventional wisdom didn’t see the pandemic coming, did it?
Yet the market is on the move, and in real estate footprint jargon, the size of that move is down. In a bold step, Meta recently decided to vacate a central London location, incurring a substantial cost of £149 million (US$181 million). This decision, while significant, underscores the critical role of data-backed insights in shaping real estate strategies. It’s evident that Meta’s move was based on a deep understanding of their physical occupancy and space usage. Such granular data empowers organizations to make informed decisions, just as Meta did, ensuring their real estate footprint aligns seamlessly with evolving workplace needs.
Several Microshare clients, meanwhile, took downsizing decisions based on occupancy and traffic data generated by EverSmart Space, including a large UK university which chose to demolish a building deemed surplus to requirements (and awfully expensive to heat) thanks to an analysis of the data. Similar assessments on leasing, configuration and hybrid metabolism decisions are being made across our client base globally – and no doubt in the larger world of corporate and institutional real estate, too.
The shift towards hybrid work models, coupled with the need for cost optimization, makes it imperative for organizations to have precise insights into their space utilization. This is where IoT sensors play a pivotal role.
- Granular Data for Informed Decision-Making
IoT sensors provide a bird’s-eye view of employee behavior within a workspace. By tracking activity and people counts, organizations gain crucial insights into:
- Usage Patterns: Understand which days of the week are peak times for specific areas, enabling better resource allocation.
- Space Efficiency: Identify underutilized spaces that can be repurposed for more productive activities.
- Hotspots vs. Coldspots: Pinpoint popular areas and those that remain untouched, guiding future layout adjustments.
- Strategic Real Estate Planning
With IoT sensors, large tenants gain the ability to make data-driven decisions about their real estate portfolio. This includes:
- Right-Sizing: Accurately determine the amount of space needed to accommodate employees effectively, reducing unnecessary overhead costs.
- Lease Negotiations: Negotiate leases with a clear understanding of actual space usage, ensuring optimal agreements that align with the organization’s needs.
- Portfolio Optimization: Identify opportunities to consolidate or expand based on genuine demand, ensuring resources are allocated efficiently.
- Facilities Management Efficiency
IoT sensors empower organizations to enhance facilities management and janitorial services by:
- Targeted Cleaning: Focus resources on high-traffic areas, reducing the frequency of cleaning in less-utilized spaces, thereby optimizing cleaning budgets.
- Resource Allocation: Allocate staff and resources where they are needed most, ensuring a cleaner and safer working environment.
- Amenity Utilization and Cost Analysis
Understanding which amenities are utilized by occupiers provides valuable insights into:
- Resource Allocation: Invest in amenities that enhance productivity and well-being, ensuring resources are directed towards areas that truly benefit the workforce.
- Cost-Efficiency: Identify amenities that may be costly to maintain relative to their actual usage, allowing for more strategic allocation of funds.
- Reducing Overhead Costs
By leveraging IoT sensors, organizations can significantly reduce overhead costs by:
- Optimizing Space: Cut back on excess square footage, ensuring that only the necessary space is utilized and paid for.
- Energy Efficiency: Integrate data on space utilization with HVAC and lighting systems to further reduce energy consumption.
In conclusion, IoT sensors revolutionize space planning and workplace management for large tenants navigating an uncertain real estate landscape. By providing invaluable insights into employee behavior, facilitating strategic real estate decisions, optimizing facilities management, and aiding in amenity optimization, IoT sensors empower organizations to make informed, cost-effective choices. Embracing this technology is not just a competitive advantage; it’s a strategic imperative for businesses looking to thrive in the future of work.
Lindsay Pick is a Microshare sales executive based in Toronto. You can reach her at lpick@microshare.io