For years, bricks-and-mortar have been our image of the building and construction industry. We are now observing gradual changes taking place. The digital revolution has definitely muscled its way onto buildings the way it has for almost every other sector. Technology advancement in both software and hardware are growing rapidly. What seems to be holding us back in construction and real estate are political and social acceptances.
Last week, I attended a ULI (Urban Land Institute) webinar on five technology trends that will shape the future of real estate. The webinar was lead by Amy Erixon, the managing director of Investments at Avison Young. Amy is an industry expert in real estate technology, greening strategies, and smart cities. The webinar had addressed questions on to increase building performance, improve occupant health, and leverage existing and emerging technologies to walk down the path of sustainability. Amy shared five emerging technologies with the most potential to disrupt the status quo. The trends are too good not to share!
#1 Renewable Energy
The cost of renewable energy has come down drastically over the last few years, especially of wind, battery, and solar technology. See Lanzard’s levelized cost of energy analysis for more information.
Batteries are keeping pace with other sectors. We are simultaneously solving disposal concerns of energy. One example is to use stored energy for street lighting.
In the realms of urban energy distribution system, we are moving away from a centralized grid (traditional one-way transmission and communication system) into a decentralized smart grid system (bi-directional smart grids with monitor, control and optimization). This will reduce energy transmission lost from a central source to smaller source locations to maximize grid efficiency.
A trend we are seeing is that most of the world is moving towards renewable energy in their economies. North America, however, is lagging behind on renewable energy policies. In the private sector, there is a growing number of companies who are developing entire businesses around sustainability and off the grid. In response, banks are increasing their financing commitments as well. A renewable future promises to improve energy independence, improve grid stability, create significant jobs (net), and reduced climate damage.
#2 Internet of Things (IOT)
Internet of Things is the interconnection via the Internet of computing devices (Sensors, Wifi, Bluetooth technology) embedded in everyday objects, enabling them to send and receive data. At this point in time, there are as many as 7 times of things connected on the internet as there are people on earth. We see benefits of making it even more efficient. 5G network is pushing efficiency and performance.
On a city level, smart city technology can assist cities to think about how to digitize information and make it more efficient. This can be applied to public transportation, solid waste management, and traffic safety. On a building level as we transition from multiple systems to an integrated system, we are looking at least 30% more capital and operation cost savings. We are moving towards an integrated system where all building data will be condensed to one place and accessible to building management. Integrated system takes up less space in the building, thereby increasing rentable floor area.
Green certifications are on the rise. High performing green certified buildings are conducting period calibrations and commissioning of their equipment to optimize long term building performance.
Buildings are becoming smart city infrastructures with locally generated power stations, storm water management, power exchange centers for and between cars, and mobility hubs (commerce, information, education, socialization, data and transportation networks). As buildings become highly integrated with technology, cyber security will become a major focus. Each building will require a high security system to help control the overall security of our city infrastructure.
On the residential side, the housing market will become more independent and less reliant on city infrastructure. We are seeing more houses off-grid and smart homes available for homeowners to increase functionality.
#3 The Mobility Revolution
Three major factors of change are taking place in the world of mobility: the transformation of service, electrification process, and autonomous vehicles. McKinsey estimates up to $3 Trillion in net economic impact, worldwide, from continued adoption of mobility services by 2025; including an estimated $330 to 990 billion in reduced parking expenses. Almost 80% of the global auto market is pushing toward phasing out of petroleum cars and adoption of electric vehicles. Currently, strong focuses are on demands in Asia and Europe. North America is yet again lagging behind due to concerns about deployment and charging stations.
In regard to manufacturing plans, major car manufacturers are aiming to fully convert their vehicle models to full electric within the next 10 years. Other transportation innovations are also ahead, including motorized bikes/scooters, high speed rail, hyperloop, and possibly flying cars.
The increased mobility has several implications on Real Estate. First, commuting patterns will shift along with location preferences. We will be seeing transformations in our streetscape and transportation infrastructures (pick up and drop off configurations).
#4 Radical Materials for Construction
Material science of construction is moving ahead to provide fundamental attributes to help us solve environmental issues. We are seeing three upcoming stars in the material category among many others.
Aerogel is a synthetic low-density material with superior insulative qualities. We are looking at embedding this material in cavity insulation, glazing units and cladding systems, and roof membranes. What seems to be holding us back is the high cost of production.
Carbon Nanotubes are extremely strong hollow strings of carbon atoms that bond together in a tube-like fashion. This material could possibly be added to concrete or asphalt to the way rebar reinforcement is used in concrete construction. The unique properties of Carbon Nanotubes can be added to materials to greatly enhance the structural strength and lifespan of foundations, load-bearing walls, and roads.
Basilla Filla is an interesting one. It is a genetically modified bacteria, developed by a group of students from Newcastle University to help repair cracks in concrete. This technology can potentially prolong the life of concrete to reduce CO^2 emissions derived from concrete production.
Other emerging construction material innovations include 3D printed batteries and CO2 harvestation machines to directly reverse climate change.
#5 Design Tools of the Future
Three emerging design tools are gradually making their way into the construction and real estate industry.
Virtual Reality is a computer-generated simulation of a 3D image or environment that can be interacted with a seemingly real way by a person using special electronic equipments. This technology helps to put us in a rendered world and is best for sensory and emotional experiences.
Augmented reality is a technology that overlays computer-generated image, data, video, and communication tools on a user’s view of the real world, thus providing a composite view. It is best for training, field work, compliance, inspections, and any application that needs portable data.
Mixed Reality and Holograms
In this technology, we are looking at a photographic recording of a light field rather than an image formed by a lens to display 3D images, which can be seen without the help of special screens of glasses. Mixed reality and holograms will move us towards manipulable, contextual, scalable rendered images in the real world. It is best for design, marketing, remove monitoring, creating digital files of existing conditions, testing alternatives, topographical mapping and illustrating flows and processes.
We are leveraging technology to reverse climate change through recycling, radical new materials, renewable energy, and CO^2 reversal. From a policy standpoint – by 2030, all new buildings per code (in Canada) will be net zero carbon in operations. Our sustainability are possibly achievable through the emerging technologies. For those of us looking for cues of how technology can become deployable for the real estate industry, healthcare is a great place to start.