Openness and Connectivity: Prerequisites for a True Digitalisation in Real Estate

When it comes to digitalisation in real estate, we hear new buzz words on a regular basis: IoT (Internet of things), big data, AI (artificial intelligence) or lately the blockchain. BIM (building information modelling), one of the “big trends” of recent years, seems to have lost its magic already – even though it is far from being a standard.

So what is this digitalisation hype all about? And why does it seem that all the great promises of the mentioned technologies rarely come to life in real estate reality?

Of course, it is the natural effect of a hype that the potential of a new tool or technology is overestimated while the hurdles to implement and actually use it are often neglected. And yes, often we are just not patient enough. Even in these fast changing times change needs some time.

But I believe that there is another reason which hinders us to harvest the full potential of digitalisation – and not only in real estate: Information silos and proprietary thinking.

For lots of different problems we use very particular software solutions. In real estate this means that different stakeholders operating a building usually work in their own software environment:

The asset manager uses data room providers, the property manager a property management tool, the facility manager a CAFM software and building automation tools and so on. What most of these tools have in common is that originally they were not designed to share their output, be it with other software solutions or with users outside of the application.

This produces the most awkward results:

  • Asset managers sometimes sell and buy buildings without knowing all technical and economical details.
  • Some property managers are requested to print all of their digital communication on paper (!) so that they can hand over all info once a contract ends.
  • It happens that facility managers use only a fraction of the functionalities of a CAFM system because the necessary information about a building is not available and it would take too much effort to asses it.

What effect does this have on the above mentioned digitalisation trends?

  • How smart can artificial intelligence be if it looks only on particular fields of operations rather than on the building as a whole?
  • Do you want to have a different blockchain for all of these fields of operations?
  • And a different dashboard/interface for every IoT system you use?
  • What is the benefit of big data analytics when the data samples are rather small?

It is often stated that data is supposed to be the new oil. But unlike in the oil markets the price for data doesn’t go up if you lock it up in in large silos. This is not a zero sum game. It’s rather the opposite: The more you allow the data to flow the more you will gain because other stakeholders will gain from this data as well.

Now, what does this all mean for the digitalisation of real estate after all?

In my opinion we have to create a mindset of openness and connectivity. The providers of software tools for real estate will have to focus on how they can make their results available to others. Building owners and operators should start to connect these data sets. This will not only allow them to gain new insights, increase efficiency of their building operations and make better investment decisions. This will also enable the big technology trends mentioned above to finally contribute to a better real estate management.

With this view we started the development of Loghouse, a data platform for commercial real estate that is designed to bring all relevant data streams of a building together. With its web based platform Loghouse allows building owners to quickly find and share their information with any stakeholder while the open software interface will allow to exchange data with any third party software.

Many thanks to Loghouse for providing this insightful post. Loghouse will be joining us at our Symposium on the 12th April 2018. For further details, please view the agenda here, or register to attend.