How Much Might Building Management Tech Save You?
- Commercial Real Estate
- CREtech Blog
Smart building management technology isn’t just trendy. The sensors and online platforms maximize existing systems for optimal operational savings and tenant satisfaction. However, some sources claim implementing building management software (BMS) costs $2.50 per square foot at the minimum. Is utilizing the latest in smart building technology really that expensive? Let’s dive into the existing numbers regarding what commercial real estate owners and property managers could save from building management technology.
BMS Estimated Deployment Costs
Traditional BMS systems take around four years to recoup their installation investment, says Steve Raschke, former CEO of CANDI Controls, acquired by Altair. For small or midsize buildings, the high cost means these BMS systems are beyond reach. Consequently, the Department of Energy reports around 90 percent of the United States’ buildings operate without any smart technology.
Why a BAS Could Save You Money
Instead of a BMS, turn to a building automation system (BAS). These systems don’t require specialized expertise to install or monitor, making them more accessible and reasonable for smaller commercial real estate. Raschke said CANDI observed IoT-managed energy systems averaged $0.75 per square foot, significantly less than the $2.50 minimum of BMS systems.
A BAS typically reduces equipment operating costs by 15 percent. According to Metropolitian Energy Coalition (MEPC), a BAS produces savings ranging from $0.20 to $0.40/square foot for most buildings. Total savings vary according to the type of equipment, the technology applied, and the building’s size.
The American Council for an Energy Efficient Economy (ACEEE) studied the impact of smart technology deployed in buildings. It found the average Class B office space saved 18 percent per building. Report author Christopher Perry said, “We estimate that smart building technologies can save the average office 18 percent in HVAC, 28 percent in plug load, and 33 percent in lighting energy.”
Take a closer look at some of the numbers from smart building technology applications.
HVAC systems have a significant impact on a space’s energy costs and tenant comfort. Making a change as small as replacing thermostats with occupancy-based wireless thermostats that automatically reduce the system’s load when the space is vacant can save 5-10 percent in energy costs. ACEEE notes moving to a remote, smart learning system like Nest’s thermostats adds slightly more in operational savings.
Advanced rooftop units control can cut HVAC use by 20-40 percent through using sensors to monitor existing temperature conditions. These units adjust temperature, humidity, and ventilation based on the exterior weather for optimal use.
Another cool technology tool to control interior temperature? Adjusting light for seasons and time of day improves the work an HVAC system is doing. Lutron claims smart solar films with personal dimming control reduce the cooling load by 10-20 percent. The users control the dimming settings through apps or other wireless means.
Lighting is another high demand system for commercial spaces. Many smart building technologies for lighting have a high implementation cost. Take occupancy/daylight sensing technology, which the ACEEE says runs between $20-$100 per sensor. It averages 20-40 percent in energy savings, for what it terms a “medium” savings return.
Gartner claims some smart lighting system installations have shown energy savings up to 50 percent. They note that a typical upgrade stops at upgrading the fixtures to LED, but for maximum lighting savings, these systems must be part of an automated sensor network.
Will Building Management Tech Pay For Itself?
Commercial buildings’ value relies on its net operating income. The MEPC claims decreasing utility costs by $0.10 per square foot through BAS technologies could increase a property’s market value by $0.80 square foot.
Typical BAS systems will recoup their investment within two years, says MEPC. A 100,000 square foot building gaining 15 percent in annual energy savings, combined with utility rebates, productivity loss avoidance, and operational maintenance cost avoidance would pay back a $200,000 BAS system within 1.3 years.
Of course, no two buildings or scenarios are like. The current numbers do show implementing the right smart building management technology can reduce operational costs and a building’s carbon footprint without sacrificing tenant comfort.