Are commercial buildings still waiting for tech’s holy grail?

Technology in commercial buildings is essential but often frustrating for property owners and asset managers. Commercial property has spent more than a decade installing technology faster than it can integrate it. Buildings continue to run on overlapping operational systems such as building management systems, lease management, access control, energy analytics and tenant apps, all sold as a solution, but most end up creating another silo.

Owners have been promised interoperability, but most have a patchwork of systems held together by spreadsheets, individual software headends and the institutional knowledge of a few key staff.

What comes through in each conversation is that the technology problem is rarely a technology problem.

The hardware works, the platforms are cheaper, there are integrated systems that improve operational efficiency, AI agents can really read leases and pull specific clauses in minutes.

The hard part though is everything around it, who owns the data, who’s accountable when an automated system doesn’t work as intended, who makes the decision on which tech to install and what legal and user concerns need to be understood.

The buildings that get this right won’t be the ones with the most tech, they’ll be the ones where the tech does the heavy lifting behind the scenes and you (the user) barely notice it’s there.”

– Shen Chiu, who provided editorial advisory on this feature, is co-founder and technical director of International Intelligent Buildings Organisation and formerly national development director of Investa Property Group.

There’s a story that reveals the often big disconnect between the hope of what technology will do for commercial buildings and what happens in reality.

Not so long ago, there was an asset manager who thought he was doing amazing work because his building was showing a huge lift in energy performance. The problem was that this had nothing to do with the management of the building – the truth was the tenant had installed solar panels on the roof.

In another instance, the reverse was true. A panicked commercial manager noticed that energy consumption had shot up across the portfolio, negatively impacting its NABERS Energy rating. In this case, the fault lay with a poorly performing building that had just been acquired, unbeknownst to the manager.

Both are examples of tech silos, says Liam Murray, founder and chief executive of Build-Apps.

What was missing, he says, was the ability of the various software applications that have been applied to buildings and often overlaid on legacy systems to “talk” to each other. Interoperability, in other words.

Josh Nicholson, senior technology consultant building technology advisory for JLL APAC, agrees and says owners are often frustrated by this lack of co-ordination.

He says that the industry’s getting “a little burnt out with technology”.

There needs to be a focus on technologies that have the biggest impact, such as environmental sustainability and return on investment, he says.

The industry is now much more focused on finding a solution that can be used as a differentiator to attract tenants and encourage existing tenants to stay.

Better experiences for tenant staff and visitors

This might include integrated systems that improve user experience for staff and visitors or having a new data layer that captures and presents data that was never provided to the building managers before, such as insights into tenant habits or preferences.

This can benefit both sides of the equation – tenants and landlords.

Tenants have high expectations that “they walk in, and everything works”.

System-to-system integration in BMSs can go a long way to maximise efficiencies says Josh Nicholson, senior technology consultant for JLL.

In a lobby café, for instance data that indicates hundreds of people walking through every day, can be used to automatically adjust thermal demand through the building tenancies.

In mechanical systems, the big push now is to optimise for fault detection and diagnostics (FDD) to ensure HVAC and other systems are running at optimum levels.

Faulty equipment can be expensive for a business that lacks predictive maintenance systems.

The old interoperability problem

For the longest time, buying 100 different solutions and telling them to “talk to each other” was the focus of interoperability.

Murray who has a background in ESD and rating tools for buildings says:

“People are realising they can’t have 200-300 different proprietary systems and technologies in a building. So, they’re trying to bring it all back to a single platform.”

Murray’s Build-Apps creates building services plug-and-play real estate specific agentic apps using Microsoft’s Office 365 with the help of AI.

These applications are designed to help landlords, tenants and managers of big asset portfolios, whether commercial, industrial, retail, build-to-rent and even retirement living facilities, avoid confusion.

 The aim is to allow conclusive building information to also incorporate energy performance metrics and ratings, such as NABERS. 

And it can all fit within Microsoft’s Office 365 framework.

It not only brings the data under one virtual roof but also allows big real estate investors to “own” their own data, including the information that comes with their use of AI.

But a barrier to full resolution of the interoperability problem is often that commercial imperatives run counter to the ambition of vendors to retain maximum control.

Yardi, for example, which is one of the biggest providers of property management and financial systems, does not allow APIs (application programming interfaces) into their software in Australian systems.

“They categorically do not want any interoperability with any of their competitors because they’ve made a business decision – they want to be the end of the stream,” Murray says.

And while data can enter the platform, it cannot be extracted to other platforms. However, the company has a long track record and is now well embedded with many customers, so that those with large portfolios are now tied to the software. It makes tricky to integrate data from other sources.

Other products, including JLL’s new facility management product, JLL Prism, are “fantastic to work with”.

The system allows developers to push and pull whatever data they need in and out of the platform and encourages their clients to use third party applications to manage equipment, Murray says.

“It all comes down to who’s taking responsibility for the interoperability.”

Murray notes that there are examples of companies taking others’ knowledge sets to create their own AI, which breaches non-disclosure agreements, intellectual property and copyright. In the EU, companies could be fined 7 per cent of their turnover for these infringements.

Building management control systems

Meanwhile, building management systems (BMSs) are evolving, especially as providers now increasingly include analytics as part of their base offerings for new buildings, rather than clients needing to buy a separate platform.

“There’s a lot more that goes into a building than just its BMS. When you talk about digital systems within a building, it’s [also] how you manage complaints, leases, etcetera,” Murray says.

That’s what Murray’s AI engine, PIPP AI, tries to solve by extracting specific information from leases, such as whether there are green clauses that require the landlord to achieve a particular NABERS rating.

It’s the kind of thing that can be missed if the leases were written 5-10 years ago, Murray says.

Large building portfolio owners also have complex digital systems, so on top of BMSs, they have property financial management systems, as well as platforms built by management agents exclusively for internal use, such as those hosted by real estate giants such as JLL, CBRE and Knight Frank.

System-to-system integration in BMSs can go a long way to maximise efficiencies.

In a lobby café, for instance data that indicates hundreds of people walking through every day, can be used to automatically adjust thermal demand through the building tenancies, Nicholson says.

In mechanical systems, the big push now is to optimise for fault detection and diagnostics (FDD) to ensure HVAC and other systems are running at optimal levels.

Faulty equipment can be expensive for a business that lacks predictive maintenance systems.