Pablo Picasso. Crude oil. Chemistry of Memory. Mother Earth.
These are the topics Rudin Management Chief Technology Officer and Chief Operating Officer John Gilbert told the audience at his ITEXPO keynote that he wanted to discuss. It was an eclectic collection of talking points, but Gilbert’s hope was that by the end of his presentation, the topics would be connected.
Gilbert managed to take four seemingly disconnected topics and merge them to explain how wireless connectivity and property technology could and would work together to create smarter buildings that could improve tenants’ experience, save building owners money and help save the planet.
ASK THE RIGHT QUESTIONS
“Right before Picasso died, he was asked what he thought about computers,” Gilbert said. “Being the blunt person he was, he said, ‘They’re useless.’ Even though we all know they’re not useless, the reason why he said that was because (computers) only give us answers, the important thing in life is how we frame the question. How we focus on a problem and search for that solution and be specific as we possibly can be.”
When Rudin Management and Gilbert had a vacant, undesirable building on their hands 25 years ago, the question they asked themselves was how could they differentiate that vacant, seemingly obsolete building from the surrounding properties. The solution was to create the New York Information Technology Center.
“We created the first building in the world that actually brought optical fiber to the desktop,” Gilbert said. “Meeting this new world of content creators head on and giving them all the relevancy all the raw materials they needed, which were basically a solid building, a community of like-minded people, bandwidth and ultimately flexible space.”
The second time Rudin faced a big question came after a meeting with Con Edison. The energy company wanted to give Rudin external data feeds. Suddenly, Rudin had to figure out how to create a system that would allow it to take the external data, mix it with its internal data and make it actionable within 30 seconds. The answer was an operating system.
“Our buildings needed an operating system,” Gilbert said. “We said, ‘Let’s go find those guys and gals.’ They didn’t exist, so we had to create it ourselves. Again, what was the question that we were trying to ask and answer? What was the problem we were trying to solve?”
ADDRESS PEOPLE’S PROBLEMS AND ANSWER THEIR QUESTIONS
What does crude oil have to do with commercial real estate and proptech? Not much, except when people begin to call data the “new oil,” which Gilbert admittedly disagrees with.
“Not unless you have software that can refine it to make it useful,” he said. “Not unless you have software that can ultimately take that dark, gooey, seemingly useless product and make it useful.”
Rudin Management made data useful by creating NANTUM, an Internet of Things (IoT) solution powered by Intel that allows CRE owners to lower their expenses by preserving legacy investments. The solution also ensures CRE owners future scalability while continuously improving energy efficiency across building systems. NANTUM was in part created so CRE owners could track all of their building’s data in one location.
“We knew we didn’t want to die a death of multiple dashboards,” Gilbert said. “We knew that I’ve got a water, electricity, steam and occupancy app, but if all of those things are not connected into a single integrated platform then individually they’d be useless. So we created an integrated platform and now we can take all of those data sets.”
Monitoring data can have successful domino effect. For example, looking at occupancy can influence fan speed, which can reduce energy consumption, which can help buildings owners in places like New York City avoid regulatory penalties and fines.
“That data that we’re collecting needs a home and to ultimately be made useful,” Gilbert said. “That’s where software comes in. I think at least from a real estate standpoint, it’s one of those inflection points in our history where if we’re able to solve this concept utilizing data and be data driven, our world changes. I can see our world changing right now.”
MACHINE LEARNING MAKES “CRUDE OIL OF DATA” USEFUL
Gilbert referenced a pair of scientists to explain the importance of machine learning in the CRE industry—Albert Einstein, and Erick Kandel who won the Nobel Prize in the Physiology or Medicine category in 2000. Kandel proved the chemistry of memory was as constant at the speed of light, while Einstein theorized that there was only one pure constant—the speed of light. Kandel identified the neurons that water slugs used to remember stimuli and discovered that the human brain uses the same chemistry.
“Why does that matter?” Gilbert said. “Because machine learning is going to redefine the crude oil of data that’s going to make it useful. That is ultimately going to save the Earth because we’re going to figure out ways to optimize and make more efficient buildings a constant. We need to memorize those patterns.”
A building’s water consumption is an example of a pattern that machine learning could pick up, according to Gilbert. The building could recognize how much water is typically used in a day and spot an abnormality if a leak occurs because a pipe burst. The early detection could prevent a building from being out of commission for days.
“I think the memorization of patterns is the most important aspect of the way we look at our real estate management today,” Gilbert said. “This concept of the chemistry of memory is at the core of everything that is artificially intelligent. It’s at the core of everything that is machine learning.”
Machine learning also helps make buildings more eco-friendly. If a building can compute occupancy patterns, it can determine how many lights need to be turned on and whether or not the heat or air conditioning needs to be running at any given time. Buildings lacking such technology experience a lot of wasted energy because air will be blowing as if people are at their desks when they actually are out at lunch. Rudin’s NANTUM system erases that issue by correlating pairs of data that had never “talked” to each other before.
“The best part is I can enhance the experience of my customers with (temperature related) calls by 75 to 80 percent,” Gilbert said. “People feel better; they’re not too hot or too cold, simply by using that same data set that is saving one building more than a million dollars a year—on average 55 cents a foot.”
HOW CONSERVING ENERGY IN CRE CAN HELP SAVE THE PLANET
When big companies like JPMorgan Chase, Microsoft and Apple announced they were going carbon neutral, Rudin’s, and likely other CRE owners’, tenants took notice. They also wanted to be able to tell their investors, employees and prospective employees that their company was going carbon neutral. That demand put a lot of CRE owners on notice, but for some, reducing one’s carbon footprint is not as easy as flipping a switch—tenants play a part in these adjustments, too.
For example, Rudin Management has used NANTUM to reduce its electrical consumption by 41 percent, carbon by 48 percent and steam consumption by 48 percent. However, property owners can only control so much of the energy consumption pie—about 40 percent and the tenants control the remaining 60. Unfortunately, the responsibility has been put on CRE owners to tell their tenants that they need to reduce their energy consumption.
“The problem is I’m going to be knocking on (accounting company) KPMG’s door during tax season saying, ‘Hey everyone, it’s time to go home,’” Gilbert said. “Otherwise, I’m paying fines, even though they’re burning the midnight oil doing their customers’ taxes. That does not work; we’re the City that Never Sleeps, and we want to remain the City that Never Sleeps. What needs to happen is engagement between the owner and tenants to identify areas where we can work together to reduce our consumption and carbon footprint. We will make it happen.”