A recent report from smart building research specialist Memoori revealed more than 1.5 billion Internet of Things (IoT) devices were installed in commercial real estate buildings in 2022, SmartCitiesWorld reports. The figure represents almost 12 percent of the total amount of connected devices around the world.
Looking ahead, the IoT devices in CRE buildings could increase at 13.7 percent compound annual growth rate (CAGR) between 2023 and 2028, reaching an estimated 3.25 billion devices by 2028, according to the report.
Why CRE is embracing IoT
A number of organizations have been considering deploying IoT but now have finally moved toward putting their plans into action, according to Memoori. Additionally, the report showed that the average number of IoT devices per project has increased. A lot of deployments include at least thousands of IoT devices.
Not all of the CRE industry is on board with IoT devices, however. As of 2021, about a third of CRE assets were still being managed manually. A number of factors have contributed to hesitancy to adopt IoT including costs, lack of technical expertise, data privacy and security, scalability, legacy systems and change management.
Memoori suggested companies adopt a “gradual and phased approach” to smart building development to help make the transition to IoT devices easier, SmartCitiesWorld reports. They should also prioritize creating a roadmap that brings tangible benefits to the stakeholders.
Benefits of IoT for CRE owners
A number of challenges currently face the CRE industry — businesses shifting to remote and hybrid models being one of the biggest. Rising costs of energy, labor and materials have also hindered the industry.
The CRE office sector as a whole has been slow to recover from the COVID-19 pandemic, but it’s been especially hard on secondary office buildings. The landlords who have invested in sustainability credentials, amenities and digital connectivity are more likely to stand out in the crowd and improve their future returns, SmartCitiesWorld reports. Meanwhile, outdated buildings run the risk of becoming obsolete.
In terms of what IoT devices CRE owners should consider, connected devices related to security and access control currently account for a majority of connected devices. This category is expected to keep growing at a steady 11.9 percent CAGR, rising to 646 million devices installed by 2028.
Going forward however, Memoori’s analysis suggested that sensors and devices that monitor building occupancy and space utilization will experience the highest growth rates for any application in the coming years.
Additionally, for smart building systems, artificial intelligence (AI) and machine learning (ML) technologies are continuing to act as innovative tools, empowering building operators to collect, process and use data from their buildings.
Finally, generative AI models, such as GPT-4 offer potential benefits for Building IoT (BIoT) systems in terms of natural language processing (NLP) and improved human-AI interactions, according to the report. By combining Integrating NLP, BIoT systems and data, building owners can enjoy simplified user interfaces, increased adoption, enhanced data analysis and improved scalability.