Your office is brand spankin’ new. It’s got all the bells and whistles. Maybe a robot delivers coffee to your desk every morning – or maybe you just landed a great location and a great architect. You’re proud to have a Class A building. But is there anywhere else to go from here?
As we say in Minnesota, you betcha. Your office may be modern – but is it smart? Are your employees comfortable? And, is it saving you money?
So maybe your office building isn’t the greatest. It’s been around for at least 20 years, and it’s starting to show its age. There’s a perpetually-leaky ceiling tile. The pipes make a rattling noise (or, is it something living in the pipes?). Your employees come into work huddled under blankets until the afternoon, when they switch to portable fans.
If this is the case, you probably have a Class C building. If you’re preoccupied with the day-to-day building maintenance and repairs of an aging building, a smart building upgrade may sound like overkill. But Class C buildings actually have the most to gain by becoming smart.
On some days, your employees are coughing and sneezing. On others, they appear to be sluggish and sleepy, experiencing what many have deemed the "2:30 feeling" since the airing of 5-Hour Energy's advertising campaign.
So what can you do about it?
Although a company curfew and extra caffeinated coffee could be the solution for a few, it may not solve the overarching issue. Why? Because many offices suffer from "sick building symptoms," including bad indoor air quality (IAQ). In fact indoor air quality is likely to be 2-5 times worse than outdoor air quality. Given that most of us spend 90% of our time indoors, improving your building’s indoor air quality can significantly affect employee and customer health, comfort and productivity, sometimes increasing cognitive ability by 101%!
Could your office building be described as… average? Maybe it doesn’t have a fountain in the lobby, or a view of the ocean – but you have four solid walls, a non-leaking roof, and only a few drafty cubicles. Have you ever tried to make your building work with an HVAC hack? Maybe you even taped a piece of cardboard over the vent to manage the airflow. That would be pretty clever of you, MacGyver.
So, if your office building is around 10-20 years old, has some wear and tear, but is generally in good shape, you probably have a Class B building. This is good news. Investors tend to target these buildings since, with a few upgrades, they can easily become Class B+ and compete readily with Class A properties. One of those upgrades is making your Class B smart – and it’s probably easier than you think.
Vacancies hurt. They cut into operating costs to maintain. Meanwhile, you're spending on market listings to attract prospective tenants – all without a lease revenue stream. According to JLL Research's U.S. Office Outlook, total vacancy increased for the third consecutive quarter in almost all asset classes.
To save money, cost-conscious tenants are are looking toward older buildings that have been remodeled with tenant improvements in mind. It’s no wonder, then, that renovations to older buildings are on the rise. New generations of tenants prefer modern workspaces with minimal costs, with an emphasis on sustainability and cutting edge technology.
How can you best use this opportunity to attract new tenants and reduce commercial real estate vacancies?
Increasing your net operating revenue is sometimes easier said then done. However, building automation systems are an under-leveraged CRE technology offering huge potential to not only improve the occupant experience, but also increase your buildings' operational efficiency and bolster the balance sheet.
But how exactly can a BAS increase that revenue? Keep reading to find out!
