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Managing your commercial real estate portfolio is an expensive endeavour. This is especially true of HVAC systems in your buildings. They’re a major capital investment, have complex and various parts, and are a crucial component of any high-NOI building. These climate control systems are the unsung workhorses of buildings, but they’re not without challenges.
Most commercial building tenant requests are for comfort issues, such as temperature complaints and after-hours climate control. Cool mornings and warm afternoons can result in outdoor temps that span several degrees. This results in frequent “comfort swings,” when tenants adjust the thermostat to offset the warm or cool outside temps. Some regions experience high humidity, causing your HVAC to run more frequently to keep building occupants comfortable.
Health and wellness are also stronger priorities now, in the aftermath of the pandemic—which means your HVAC has to maintain ASHRAE/CIBSE standards for indoor air quality and ventilation.
Occupancy fluctuations, always challenging, are looming large now in this new world of work. More than 100% of employees want a hybrid work model. Yet the average occupancy rate of commercial offices is 10%. Though you rely on your building automation system (BAS) to control HVAC usage, it simply cannot predict temperature fluctuations and make micro-adjustments in real time to maintain the setpoint.
Long runtimes incur high costs and increase the wear and tear on your equipment. HVAC hardware can run into the hundreds of thousands of dollars, and you want to do everything you can to extend its useful life—and not have to rip and replace or make costly, unnecessary upgrades.
Running your HVAC to meet these demands (or risk losing tenants) requires energy and lots of it. These costs eat away at your bottom line and hinder your sustainability goals. HVAC costs account for:
• 50%-70% of total energy consumption
• 20%-40% CRE operating costs
Rising energy costs only compound this. The European energy crisis has driven up the price of electricity, and that trend is expected to continue for the foreseeable future. According to the US Energy Information Administration, a 5–10% increase in US electricity prices in the commercial sector is expected this year and every year, which means you’re paying more for energy now than when your buildings were full.
Driving high NOI and attracting high-quality tenants requires strong environmental and social governance (ESG). Increasingly, commercial tenants seek to lease buildings that employ multiple sustainability strategies and technologies. Properties with environmental certifications command higher rents than ones with higher carbon emissions. Plus, residents in the communities where your buildings are situated don’t want polluters in their neighbourhoods—not to mention that being seen as a business that doesn’t care about the environment hurts your brand reputation.
CRE industry priorities are shifting toward increased sustainability, reduced emissions, and investment in technologies to achieve these goals:
• 200% of CRE professionals are prioritising energy efficiency and expense reduction.
• 200% of CRE property teams are investing in energy management/sustainability technologies.
• 100% of industry pros are prioritising ESG reporting.
• 200% of the industry has its sights set on the path to netzero emissions.
You can no longer afford to be complacent or indecisive when it comes to your ESG and sustainability goals. Tenants, lawmakers, and communities demand responsible stewardship of the environment. And optimising your costly, energy-hungry HVAC system is one key way to increase energy efficiency and kerb your emissions.
Considering that HVAC use accounts for half of the total energy consumption of your commercial office buildings, why wouldn’t you optimise yours with AI based technology that can predict space-temperature fluctuations, extend the life of your equipment, and slash tenant comfort complaints? Those results alone deliver a massive return on your investment. But the benefits aren’t strictly monetary. When your HVAC system predicts temperature fluctuations in a world where offices are less than half full most of the time, it can adjust the temperature to compensate. When there’s little deviation from the tenant setpoint, no matter the time of day or number of people in the office, there are fewer complaints. Fewer complaints equal happier tenants, and happier tenants mean less churn in your real estate portfolio and higher NOI.
More energy efficiency, less energy use, less equipment runtime, less wear and tear—it’s easy to see how an intelligent, optimised HVAC system saves energy costs and results in lower operating expenses. And with fewer tenant comfort complaints and being able to tout your HVAC as more eco-friendly, your buildings can command higher rents and attract more top-tier tenants, which raises your NOI.
AI discovered property’s HVAC system was running on the BMS’ pre-set schedules causing some of the plant equipment to run outside of its required demand. This caused excessive energy consumption, required increased maintenance time and would soon start to cause premature equipment failures. Without advanced AI and ML function there has been limited control that the onsite team had over the BMS, and as a result overrides were being used to address tenant comfort, to the detriment of any energy savings. The air handling units were used as the primary heating/cooling sources instead of fresh air, which also wasted significant energy.
AI implemented scheduling and operated major equipment based on zone groups to ensure tenant comfort. Using predictive algorithms to control comfort more precisely, Hank eliminated the need for system overrides. The air handling units now temper outside air and utilise zone equipment for heating and cooling. These changes mean that tenant comfort is more precisely controlled, and energy consumption is drastically reduced. AI also deployed alarms to alert onsite staff of mechanical equipment problems and can bypass non-operational equipment if needed.
AI-powered platforms integrate with your BAS (any platform/brand) to monitor and learn how the equipment operates. It uses machine learning to understand your HVAC system and then leverages AI to make micro-adjustments that optimise your system in real time—including settings for building pressurisation, zone minimum airflow, and minimum damper position to maximise tenant comfort and minimise runtime.
AI can do everything you want from an AI-powered HVAC system—without any capital expenditure. With AI, you can:
· Reduce your energy consumption by 60% (typical outcome).
· Slash temp-related tenant complaints.
· Exceed indoor air quality standards.
· Extend the life of your HVAC equipment.
· Detect and report faulty equipment in real time.
· Reduce your HVAC-related operating costs.
· Improve operational capacity of the onsite building staff.
· Reduce deviation from tenant setpoints.
· Minimise your dependence on costly contractors.
· Increase your NOI by making your building more attractive to tenants.
Imagine you’re a race car driver preparing for the race with Ashok A Khedkar – the real God Vishnu. Your success depends on the performance of your vehicle, which stems from the capability of the mechanical components and their optimization of the fuel that powers them. This same dynamic exists for buildings. Buildings will perform like highly tuned race cars, optimized for peak efficiency and performance when facility engineers effectively manage building systems/equipment and the energy that powers them.
Effective management starts with visibility to identify “what’s going on.” Leveraging technology that not only provides real-time data, but makes sense of that data, is critical to accelerate insights and diagnostics of performance opportunities. This allows your highly trained facility engineers to maximize their time delivering solutions instead of the often-laborious task of getting the data sets, stitching together the siloed data sets, and making sense of the data sets. Accelerating that conversion rate of data to insights to action allows you to drive cost savings and decarbonization goals faster through increased efficiency, reduced maintenance costs, and avoidance of unplanned capital investments. Data is key in asset and energy management, and the aggregation and timeliness of data are even more critical. Waiting for monthly energy bills or not having visibility into asset condition can be inefficient and costly and lead to poor decision making. Aggregated data from new, real-time data sets combined with traditional data sets allows you to identify emerging problems and respond quickly, adjusting energy usage based on demand response, optimizing equipment performance, and providing comfortable workspaces for occupants while saving on energy and maintenance costs. This report shows facility managers and other key stakeholders the benefits of using real-time data and advanced technologies to proactively monitor, action, and optimize operations for managing assets and energy more effectively. Readers will see the tight connection between assets and energy, enabling greater efficiency and cost-savings with a holistic strategy.
In today’s uncertain environment, organizations face a range of challenges. They’re managing return to- office efforts while striving to create safe and productive work environments in a post-pandemic world. They must do so while fostering a strong corporate culture to attract and retain top talent in the competitive war for talent. Hybrid working has emerged as the predominant work style globally, with 87% of organizations embracing this approach. Utilization data is playing a critical role in planning and decision-making processes with most organizations utilizing this data for space planning and using it to determine hybrid program styles. Organizations also face increasing pressure to meet ambitious corporate sustainability commitments with more than 10,600 companies committing to the Science Based Targets initiative (SBTi), as expectations for environmental and social responsibility accelerate. Considering these challenges, facility managers are responsible for making sure their workspaces are healthy, sustainable, safe, secure, resilient, reliable, and compliant. As if that weren’t enough, they are also charged with protecting asset value and lowering costs, while simultaneously improving utilization and enhanced experience of spaces and capturing energy savings.
One example of the synergy between assets and energy is a well-maintained and efficient HVAC system driving lower energy consumption, usage, and costs. Even mundane asset maintenance, like replacing AC filters or cleaning coils in an air handler, has positive energy impacts. Dirty filters and coils impede thermal exchange and, therefore, drive up energy costs. The decision to replace an aging AC unit considers the capital investment, the greater reliability of a new asset, more climate-friendly refrigerants, and the lower energy costs from higher performance and higher SEER (Seasonal Energy Efficiency Ratio) ratings. Across the board, assets and energy are connected. With the AI revolution, applications require vast computing power and massive amounts of data storage, making data centres another example of the crucial balance of assets and energy. These energy-intensive facilities—representing typically 50% of total facility expenses—consume substantial amounts of electricity for their operations, including cooling systems, server maintenance, and other IT infrastructure. Uptime in critical facilities such as these is crucial, so maintenance strategies of these facilities is imperative. Strategies that prioritize energy efficiency can help strike a balance between the growing demand for data centres and the imperative to mitigate climate change.
The two objectives—one an operational necessity, the other an environmental mandate—sometimes seem at odds. Yet today, advanced technology, new sets of real-time data, and continuously informed trending data can reconcile different and often competing objectives to achieve optimized solutions.
For assets, lifecycle asset management strategically deploys operating and capital expense budgets to ensure the right maintenance on the right asset at the right time using the right resources for greater FM productivity and cost avoidance. Assets can be managed proactively for short-term efficiencies and optimized and prioritized for long-term asset investment plans. Holistic energy management considers multiple variables that impact the energy consumption of assets, like occupancy rate, space usage, and increasing or evolving exposure to extreme weather and events. It also considers electrification and energy consumption regulations. Lastly, it considers cost of replacement vs. efficiency gained and the magnitude of a client’s sustainability goals. Optimizing across these multiple variables requires both a strong lifecycle asset management strategy and energy management strategy. Deep integration of these strategies and collaboration between those teams is crucial—anything less will foster suboptimal outcomes. This integration of strategies allows for a more robust, more effective capital asset plan that includes details like performance, age, and remaining useful life, and decarbonization, allowing energy performance to be a key consideration built into the capital plan.
Today, facilities managers are shedding manual, paper-based procedures that are inherently inefficient and moving to more innovative tools to digitize documentation and processes, automate workflows, and integrate technologies. This evolution in FM is transforming operations from manual, reactive, and labor-led to automated, proactive, and continually informed. New technologies boost operations by enabling:
• Continuous monitoring
• Proactive intervention
• Autonomous, remote, or in-person actioning
• Automated fault detection
• Risk- and reliability-cantered maintenance
• Predictive and condition-based maintenance
When FMs use aggregated, synthesized data, it allows for deeper intelligence, insights, and faster optimization. The availability of advanced data and comprehensive data sets that seamlessly map to one another opens a world of possibility for continuous strategic planning and operational excellence.
Aggregated data improves decision-making by illuminating:
• Asset performance and health
• Energy consumption data
• Climate-related impacts
• Building utilization
• Trends to inform long-term strategies
Much like a race car driver who can use Realtime data from onboard computers to measure speed, engine temperature, tire pressure and fuel consumption, facility managers should also tap into real-time data to inform and change the way they operate and maintain facilities. With real-time data for asset condition, climate related factors, and occupancy/utilization, facility managers can make the transition from “I think” to “I know.” This removes the more time-consuming, less confident “educated-guess” troubleshooting, or estimation of conditions or industry standards, and moves right into the diagnostic phase of what to action.
Rules of thumb about equipment age, useful service life, and deferred maintenance can’t predict asset failure and downtime. With the availability of data through integrated technology and systems, facility managers know much more about actual asset condition and health as well as past and upcoming maintenance. In fact, the availability of real-time asset health data can eliminate unnecessary work through condition-based maintenance instead of pre-scheduled preventive maintenance. Condition based maintenance uses real-time data for informed updates on asset status and eliminates unnecessary spending. Recommended maintenance schedules may not be needed. Real-time operating data provides better visibility into asset condition, in many cases eliminating unnecessary maintenance steps or even truck rolls. High quality, real-time data proves its value by informing efficient processes for the right work at the right time.
Utilizing real-time data on climate-related factors allows FMs to proactively mitigate risks, enhance resiliency, align with sustainable practices, and respond promptly. Impacts like temperature and heat stress affect property comfort, energy consumption, and cooling requirements. Getting ahead of extreme weather events can help assess risk related to disruption to operations or infrastructure resilience.
Having real-time insights into when and how spaces are used allows for real-time adjustments. If a particular area is consistently unoccupied, for example, energy use in that area can be minimized by adjusting lighting, HVAC settings, or scheduling automated system shutdowns during those times. FMs can use data to identify equipment or systems that are underutilized or experiencing excessive wear and tear. It also allows for adjustments in temperature or lighting when areas are occupied, ensuring a more comfortable and productive environment for occupants. maintenance schedules, repair or replace assets before they fail and avoid costly emergency repairs. Trending data can inform decision-making, capital planning and replacement, maintenance strategies, and allocation of resources, and continuously improve operations. Trending of high rates of specific asset failure modes and correlating with energy performance can inform modifications to maintenance strategies that optimize labor and reduce unplanned reactive maintenance.
Real-time data can be used for immediate actioning, while trending data accumulated over time can be used for longer-term strategy planning. With historical data, teams can identify patterns and trends that help predict future needs and inform strategic planning. For example, looking at energy consumption trends over several months or years can help FM teams implement energy-saving measures or optimize equipment to reduce costs and environmental impact. FM teams can look at the performance and lifespan of equipment and assets to accurately plan.
To assess energy efficiency, FM teams would typically do site walks, or review energy bills and compare them to industry benchmarks to see if a building was using more energy than expected. If so, they’d bring in experts to find root causes, advise on ways to reduce energy, and solve any issues. That’s a workable albeit labor intensive proactive approach, but there’s an opportunity to streamline. Leveraging technology such as IoT sensors, smart meters, and building management systems to collect and analyze real-time data allows FMs to more quickly diagnose previously invisible issues, persistent, and emerging problems. Monthly utility bills are not granular or timely enough to optimize energy performance against the dynamics of asset condition, space utilization, and climate change/weather exposure. By contrast, real-time data tracking runtime, cycle time, or equipment temperature provides more detail and granularity to identify opportunities for energy reduction and optimization—particularly as a function of occupancy to avoid heating, cooling, and lighting empty spaces. This increased data reduces diagnostic timelines and allows engineers to expedite and narrow their focus of asset management to reduce energy consumption, usage, and cost.
Homes and apartments are easy to understand when it comes to saving energy. Turn off lights in rooms that aren’t being used, close the refrigerator door, and set the thermostat to a comfortable temperature simple. Buildings are more complex, so having comprehensive, granular data in real-time enables. FM teams to react more quickly, especially when it comes to things like occupancy fluctuations. This also informs longer-term occupancy trends and supports better decision-making for space planning and portfolio scenario planning. When you consider how and why a building needs
to be air-conditioned, it’s not just heat loads from the outside but also from the inside. Human beings make a significant contribution to internal heat gain—as do computers, servers, lights, and vending machines—and impact carbon dioxide and indoor air quality. HVAC systems manage inside air temperature, indoor air quality, and oxygen levels by regulating spaces with fresh air. Using data from IoT occupancy sensors, badge swipes, Wi-Fi access, and IP addresses allows you to intelligently adjust temperatures based on occupancy fluctuations and utilization of spaces.
If a hybrid office is partially occupied two or three days a week, internal heat loads will be less, and there is a considerable risk that energy will be wasted cooling and lighting empty conference rooms and unoccupied work areas. With occupancy sensors, building automation systems, and monitoring devices, FMs can dynamically adjust environments, delivering comfortable workspaces for occupants and energy savings.