Aerial drone shots, such as the above, are increasingly being used by developers to plot out development sites, monitor construction and look for faults after completion.THE SKY GUYS
The commercial real-estate industry is getting into technology in a big way – finally – according to a recent report from PricewaterhouseCoopers.
Global investment in property technology, otherwise known as “proptech,” is expected to hit a record US$6.3-billion this year, up 40 per cent from $4.5-billion in 2018.
An all-encompassing term that covers technology as a solution for creating, developing, renovating, buying, selling, marketing and managing real estate, proptech is increasingly getting buy-in from stakeholders after initial hesitancy as a way to improve operations and bottom lines.
“You can do all that more efficiently with the use of technology,” says Fred Cassano, partner for private company services at PwC Canada. “It’s impacting all facets of the real-estate continuum.”
Though the term is broad, two particular prop-tech applications – artificial intelligence and drones – are especially seeing increased adoption among construction companies and building owners, according to the report Emerging Trends in Real Estate.
AI systems are being deployed in buildings to manage operations ranging from elevator maintenance to heating efficiency. Drones, meanwhile, are being used to plot out sites and monitor developments after they are completed.
Toronto-based ThoughtWire Corp., for one, made waves last year with the announcement of $20-million (Cdn.) in Series A financing, led by Yaletown Partners, BDC Capital, Round13 Capital, Epic Capital and Comerica.
The company has developed apps that work on its Smart Building Digital Twin platform, which integrate disparate building systems, including heating, elevators, lights, security cameras and network equipment. The platform and apps give building owners, managers and occupants fine-grained control over those systems, as well as data about their past and continuing usage.
Building tenants can remotely control lights and temperatures within individual rooms, for example, or have fans turn on automatically when high carbon dioxide levels are detected.
ThoughtWire is continuing to develop the system’s AI, so that it can increasingly predict behaviours, usages and trends based on the data it gathers, and then take actions autonomously.
“These are really simple things that old-school archaic building management systems can’t do,” says chief executive officer Mike Monteith. “It gives you a point of observation and control to adjust the building to be both more comfortable and sustainable simultaneously.”
Founded in 2009, ThoughtWire now has 60 employees and has deployed its apps in 55 locations, mostly in Canada. The company has worked with many of the country’s large commercial real-estate developers, including Oxford Properties at its new EY Tower skyscraper in downtown Toronto.
Mr. Monteith agrees with the PwC report’s find-ings – that momentum for adopting new technologies is building within the commercial real-estate sector after some initial foot-dragging.
“We used to see a lot of try-before-buy behaviour on a small scale, but now we’re seeing the market shift to large-scale [request for proposals],” he says.
Adam Sax, president and chief executive officer of The Sky Guys Ltd., says the drone business is seeing a similar shift. His company, founded in 2013 and based in Oakville, Ont., now has 25 employees and is working with a number of major developers, including Tridel and Great Gulf.
The Sky Guys is deploying drones to produce topographical photos and site inspections during construction, as well as to look for faults once buildings are completed. The drones are also scanning rooftops with thermal imaging to look for areas of heat loss.
Some of those capabilities are entirely new, while others are significantly easier or cheaper than they would be if using planes or helicopters.
“When we started, drones were kind of a scary thing – people were wondering what their value proposition was and were they safe?” Mr. Sax says. “Now, if you’re not using drones, you’re kind of behind the times.”
Commercial real-estate observers say the growth in investment and adoption is proof that the industry is finally emerging from its earlier hesitancy regarding newer technologies.
“It’s not a novel concept. Technology is soon going to be embedded in all aspects of real estate,” says Deena Pantalone, managing partner at Venturon, a Toronto-based venture capital group that invests in real-testate-oriented tech startups.
“It isn’t just from the top down; you have to get buy-in from all levels of the organization.”
After some initial hesitation, the momentum for adopting new technologies is building within the commercial real-estate sector, according to a recent report, Emerging Trends in Real Estate.THE SKY GUYS
Who owns the data?
With technological adoption growing in commercial real estate, so, too, is the amount of data being generated by the industry.
Buildings are increasingly producing information through all stages of their life cycles – from planning to operation to maintenance. It’s raising a number of questions, including who owns the data and how can it be kept safe?
As with every other sector before it, real estate is now having to grapple with cybersecurity questions.
“For the first time in our report, it has become a prominent issue,” says Fred Cassano, partner for private company services at PwC Canada, which recently released a study entitled Emerging Trends in Real Estate.
Questions about data collection and ownership have been at the centre of the controversy over the proposed Google-affiliated Sidewalk Labs’s waterfront development in Toronto, for example.
Critics and activists have raised concerns over how much access Alphabet Inc. (Google and Sidewalk’s parent company) and its subsidiary will have to the information created by residents and occupants.
Such concerns are likely to become commonplace as buildings and developments become “smart” through the addition of sensors, artificial intelligence and other technologies.
Since most developers don’t have technological capabilities of their own, they’re bringing in specialized partners who do.
“You’re introducing a new layer,” Mr. Cassano adds. “I don’t think the real-estate industry is quite ready for it.”
Opinions differ, but some of the companies involved say the answers are simple. Toronto-based ThoughtWire, which deploys “smart building” control systems – a number of which are in hospitals – doesn’t believe there’s much need for debate.
“Whoever owns the building owns the data,” says chief executive officer Mike Monteith.