Real Estate Tech Legend John Gilbert On Data, CBRS and Carbon-Cutting

Gilbert talked in late April about his early lessons from the late Jack Rudin; the importance and evolution of Innovation Band (aka CBRS) for real estate owners; carbon reduction and climate change; and what Nikola Tesla, Robert Metcalf and Steve Jobs all mean to the modern technological built world.

The interview has been edited for length and clarity.

Commercial Observer: What made you retire from Rudin Management and become the executive chair of Prescriptive Data?

John Gilbert: I was always executive chair. But I think a story is meaningful here. Thirty years ago, I was in Jack Rudin’s office with Lew Rudin and Bill [Rudin] and they were making an offer to me to become their first chief operating officer. We had agreed upon everything and I — probably naively, perhaps stupidly — said to Jack, “Hey, do you do contracts here?” Jack kind of paused. He was a larger-than-life person. He had this twinkle in his eyes, stuck out his hand, and he said, “Yeah, here’s our contract. You shake my hand, we have a contract.” 

I was feeling very silly at that moment, or not silly but embarrassed. He was shaking my hand and it was one of those handshakes where the other person is not letting go. And he said, “John, this is what’s going to happen. You’re going to come to work for us. We’re going to teach you our culture. We’re going to teach you how we run our business. And, then, one day, way, way off in the future, you’re going to help transition the company from this generation to the next generation.”

And that’s literally what happened. Michael Rudin and Samantha Rudin are taking over the running of the company. We have been planning this for the last three or four years and building a team for them. That was their team. It was the time Jack Rudin predicted. The good news is I had something else to do, which I really love and am passionate about, which is growing Prescriptive Data and pushing Nantum, our operating system, out there into the marketplace.

What do your day-to-day duties look like at Prescriptive Data?

It’s working with the team, obviously, pointing myself to where I can bring value. I really like mentoring. As the founder of the company and the inventor of the product, I’m very passionate about the possibilities of what this product can do in terms of saving the Earth, decreasing carbon and bringing buildings into the 21st century in terms of understanding and synthesizing data to make it useful.

We’re in a big growth mode right now. We’re hiring a lot of new people. So it’s interviewing those folks working with the product team, in terms of making sure the product is the best it can be and working with the customer success team to make sure that once a deal is ultimately signed that we’re out there implementing, installing and integrating with the systems that need to be integrated with as efficiently and as professionally as we possibly can. It’s very much what I did with Rudin from the chief operating officer standpoint, which is to have a big picture.

Many U.S. companies are complaining that they can’t find talent to hire. Do you find that to be the case or are you meeting your needs created by demand?

In terms of the talent side of things, we’re unique in that we’re at that cusp of real estate and technology. So we’re attracting switched-on engineers, sales folks, customer success folks, people who ultimately understand that climate change is real. We’re able to attract some great folks because of what we’re doing and what our mission is.

Secondly, in terms of the market itself, as far as demand, several weeks ago, the Securities and Exchange Commission came out with their draft carbon reporting requirements, which means every single publicly traded company in the United States will have to come up with a very intricate set of carbon accounting and carbon reporting rules. So as Nantum acts as an operating system for the built environment, we grab every bit of data that a building generates. A big part of that is the amount of electricity that is generated, what the source of that electricity is, and then, ultimately, what that carbon coefficient is from the consumption of that electricity.

Everybody says, “Well, how do you get the carbon at zero?” For us, the first thing you’ve got to do is to use less electricity. Nantum plays that role in a big way. The second thing you have to do is find more energy. How do we procure renewable electricity and renewable energy sources that are carbon-free? The third leg of the stool is, prove it. We’re going to have the SEC knocking on our door. The City of New York is going to be knocking on our door from Local Law 97. You bought these renewable electrons. Prove it. 

Ultimately, Nantum is at the core of that. That’s why JPMorgan Chase chose us in a very competitive process. We were up against some of the titans of the industry. Nantum was developed and evolved from the engine room out, not from a couple of smart engineers from MIT or Caltech sitting in their dorm room or their garage. This literally was an organic tool that came out of the engine rooms of 15 million square feet of properties.

Last year the Federal Communications Commission granted commercial real estate an exclusive Innovation Band, aka CBRS, which can provide the industry with great value. What’s the update on that?

When you really look at the ecosystem of real estate, buildings have always had a heart — the engine room, boiler room. Right now they have a brain with Nantum. The final frontier: the central nervous system. And CBRS is that central nervous system because it is a ubiquitous wireless network that has been gifted to property owners — 150 megahertz of wireless spectrum, which is huge. The FCC has basically said to property owners, “Listen, we, the FCC, want to accelerate the deployment of 5G, and we think by granting and gifting you property owners the license to control that CBRS spectrum within your buildings we will accelerate that.”

Is that coming true? Short answer is yes. I think it’s starting at the very top of the food chain. You’ve got Amazon doing what they’re doing [at HQ2]. Literally, JBG SMITH bought the CBRS PAL license for Amazon’s HQ2 in National Landing, Va., outside Washington, D.C. So that’s a huge, huge opportunity and really exciting stuff.

[Editor’s Note: Private Access License (PAL) is the second tier on the CBRS spectrum designated for private commercial use. The PAL tier benefits from protection against interference from the lower GAA tier, as well as guarantees access to portions of the spectrum based on individual counties.]

Can you talk more about CBRS and PAL’s effect on real estate?

​​The CBRS spectrum is divided into a private license, which goes to property owners for the roof and the four walls of a building that a property owner owns. As a property owner, I can license that to somebody else. I can use it myself. It’s currency, in a very simplistic sense. The PAL licenses were literally auctioned by the FCC. So they were bought by the Verizons of the world, the T-Mobile’s, the Sprint’s now. T Mobile and AT&T will ultimately be able to deliver enhanced 5G services outside of buildings.

What Amazon and their partner wanted to do and have done is not only do they own the license interior, because it was gifted to them, but they spent five million bucks to create the exterior license so that they control that entire 5G ecosystem all around HQ2. Really exciting stuff.

How did COVID affect adoption of CBRS?

I think COVID slowed it down, because everybody was focused on indoor air quality and are people ever going to come back. Now people are coming back, so we can get back to what we were focused on. This is a huge opportunity for property owners to really enhance the experience of the tenants that live and work in their buildings. Property owners are basically saying, “OK, wait a minute, let’s really understand whether the occupancy rhythms are going to be. Back to pre-COVID or are they something new and different? How do we react to that and how do we feed that?”

Are there other technology innovations you are examining or looking for on the horizon?

CBRS feeds. Again, we go back to this concept of needing a central nervous system. We need that because, ultimately, sensors will grab data. Everybody says data is the new oil, and property owners have it. Data may be the new oil, but raw data is crude oil. It’s gooey, useless and messy. So what property owners are realizing is they need that foundational layer of software that can grab data, organize it, synthesize it, clean it, and ultimately express it in a way where property owners as well as tenants can find value and monetize it. It is something that property owners as well as tenants, especially around carbon, are beginning to understand how valuable this is.

Can this vast CBRS spectrum solve business issues like balky virtual conference calls?

When [Rudin Management] did 55 Broad Street in Manhattan back in the mid-`90s, we had a tenant, and their motto was they had two models: One was that there’s no such thing as too much bandwidth. And, secondly, if you’re not on the cutting edge, you’re taking up too much space. So this concept of a big pipe solves a lot of issues, including issues of bandwidth and why my camera isn’t working and audio issues.

In terms of the amount of bandwidth that can be pushed through a CBRS network, that solves a whole host of issues. A big question that property owners are asking is, “What do our lobbies become?” Are they just pass-throughs or should we be pumping them with as much bandwidth as we possibly can because they become areas that are almost like an amenity, places where I can have a meeting? So now if I’m pumping as much bandwidth as I possibly can into my lobbies, boom. That solves a whole host of issues.

What is driving the technological evolution at Prescriptive Data? Is it all about carbon reduction, or other things as well?

Everybody thinks that the E in ESG stands for energy. It doesn’t. It stands for environment. And so carbon is huge. That’s more on the energy side. But what about water? What about indoor air quality? What about the pH of your cooling towers, because if the pH gets out of whack in your cooling towers that’s how Legionnaires’ disease gets spread? There’s a whole host of environmental issues that property owners have to monitor in real time.

That’s what Nantum is about. It was created to be able to give real-time feedback and create real-time feedback loops. So things that are broken or off kilter can be fixed immediately. That’s how you create value. So is carbon our No. 1e driver at this point? Absolutely. Yes. And that’s being driven as much by regulatory requirements because it’s not a nice-to-have, it’s a must-have. We need to report our carbon data and give it to our tenants, ultimately, so that they can then report it.

Do you see proptech startups gaining greater traction in the CRE industry, or is adoption still slow?

I saw a headline this morning that there was $4 billion of proptech venture capital investment in the first quarter of 2022. Up over 30 percent from last year and up 41 percent from Q4. So clearly there’s a lot of money going into it.

What technology can you imagine, but haven’t yet seen, that you believe will come to reality in the built world?

Interesting question. I wrote an op-ed over 12 years ago, which was entitled “Mr. Tesla Meet Mr. Metcalf.” It was basically about how Nikola Tesla, the creator of alternating current, and Robert Metcalf, who created Ethernet connectivity, suddenly see those two worlds coming together in a way where connectivity could influence machines and devices that use electricity to run. That’s come true in a huge way.

The only thing I would add, and it’s not about technology, is that it’s really about the use case. Steve Jobs said this the best, I think: It is about how smart, switched-on human beings use this technology to make the world a better place. That’s what Nantum is about in terms of delivering a product that will constantly morph, evolve and become more efficient. That’s why we keep pushing the envelope.

Philip Russo can be reached at prusso@commercialobserver.com.