Presented By: Partner Insights
WiredScore Helps Office Seekers Understand A Building’s True Tech Capabilities
Future Of Global Building Standards, brought to you by WiredScore
The need for reliable and up-to-date technology in office and residential buildings alike has never been more important, but evaluating a building’s technological capabilities during a location search can be mystifying. Partner Insights spoke to Arie Barendrecht, founder & CEO of WiredScore, to learn how his company is showing the commercial real estate industry how technology can be measured, defined, and ultimately optimized.
Commercial Observer: What exactly is WiredScore, and what is the company’s mission?
Arie Barendrecht: WiredScore was created because now more than ever we depend on connectivity and smart technology to communicate with the world around us, to remove friction from our lives, and to access better experiences. Given how important digital connectivity is in our daily lives, it should be easy to locate and access.
But the reality was that a means to identify and choose a space based on its connectivity and smart tech capabilities did not exist pre-WiredScore. Today it seems unfathomable, but up until 2013 there was no available information about critical technical specifications, ones that would significantly impact you either at home or at work. Can you imagine if, today, as a business, you sign a five-year lease in a building but had no assurance that internet, WiFi, and mobile signal in the building would be sufficient for your team to be productive? Or signing an apartment lease without knowing if you could successfully work from home?
We saw this as a monumental problem and also an opportunity. So we created a rating system that brings transparency and clarity to which buildings offer great connectivity and smart technology, and which ones do not yet do so, so that people can make better decisions about where to lease, rent or buy. Building owners can then use the WiredScore rating system—similar to sustainability or wellness certifications—to competitively differentiate their buildings from others, with the end goal of attracting and retaining a higher percentage of quality tenants.
Our ultimate goal is to facilitate and drive improvements in the built world so that we have a better connected and smarter future. We’ll know we are successful if we can help one billion people live and work in smart buildings by 2030.
CO: What sort of expertise does WiredScore offer in terms of technological innovation?
AB: We employ a diverse team of technologists, smart building engineers, and real estate experts. To date we’ve analyzed 4,000 buildings across 27 countries—about 800 million square feet of real estate—which means we have a broader and deeper understanding of what best-in-class technology looks like than anyone else in the world. We actively work with nearly 900 leading landlords across the U.S. such as SL Green (SLG), Nuveen, Tishman Speyer, Brookfield (BN), Hines, and Empire State Realty Trust, plus companies in Australia, Singapore, Canada and throughout Europe.
CO: What exactly does WiredScore measure?
AB: We offer two products: a digital connectivity certification called WiredScore, and a smart building certification called SmartScore. As a prospective tenant, you should be educated about important technical elements in the building you’re considering before you sign an office lease, such as the security and resiliency of the connectivity, service providers available to you, the building’s mobile signal and more. The same is true on the residential side, but geared to an apartment renter’s needs. To accurately rate the building, we apply the five “S” framework: set-up, speed, stability, security, and services.
CO: What is the value for landlords and developers in getting their assets certified?
AB: The WiredScore or SmartScore certification supplies a critical roadmap directing landlords how to upgrade and enhance the technology in their building. We also arm landlords with a powerful way to communicate about the building’s technology to tenants, brokers, and investors, allowing them to strengthen their value proposition to the market and ultimately grow their brand. WiredScore rates properties as Certified, Silver, Gold, and Platinum. About two-thirds of the buildings we examine improve at least one level once landlords engage with us and receive our recommendations, for example improving from Silver to Gold, which means buildings often improve their tech capabilities as the result of our certification.
One of the main drivers of WiredScore adoption is the clear relationship between being able to prove to the market with WiredScore that your building offers best-in-class technology, and an ability to command rent premiums. Both CoStar (CSGP) in New York and Radius Global in London found five-to-seven percent rent increases when comparing WiredScore-certified buildings to non-certified peers, controlling for all other factors. More and more often we are seeing large office occupiers mandating WiredScore in their lease requirements, and some of the largest flex-space providers in the world ask landlords to maintain WiredScore for the duration of their leases. WiredScore also attracts attention at the top of the funnel; when looking for new office space, one of the largest global consulting firms requires their brokers to document whether a prospective building has achieved a WiredScore rating, and at what level. It’s one of their key decision-making metrics. We’re seeing tenants drive the adoption of WiredScore, and this is happening even more frequently in a post-pandemic world.
CO: Are there any estimates of how WiredScore and SmartScore certification impact a building’s profitability and value?
AB: A study we ran found that nine out of 10 office space decision-makers would pay a rent premium for smart buildings. We’ve also seen studies showing that 86 percent of apartment renters are willing to pay 20 percent more for a smart apartment. A separate study showed that rental incomes for multifamily properties will increase eight percent for fiber-equipped apartments. There is a significant amount of available data proving the financial benefits to landlords when they supply great connectivity and smart technology to their tenants. And, of course, WiredScore and SmartScore are the best ways to tell that story.
CO: Walk us through how you see an average day 10 years from now regarding how office workers and apartment dwellers will interact with their building’s technology.
AB: Our view is that in 10 years all buildings will be smart buildings, and those that are not will become obsolete. There are four outcomes that a smart building should deliver for the people that live, work, operate, or interact with it.
First, smart buildings need to be sustainable, using operational analytics and artificial intelligence to ensure every building system is optimized with energy efficiency in mind.
Second, smart buildings will be cost efficient. Technology solutions such as those that allow for predictive maintenance will detect trends that indicate when a building system may become faulty, and allow operators to take proactive steps to maintain and subsequently extend the lifespan of that system. In turn, this improves the overall cost efficiency and longevity of a building.
Third, technology will enable seamless digital experiences through every touch point in the building. For example, the second you drive into a parking garage or walk into a lobby, a chain reaction of data interactions will begin to optimize your day. Your office space could be reserved and its temperature controlled, your co-workers notified of your arrival, and your breakfast or lunch will be ordered.
The fourth outcome that ‘smart’ delivers are spaces that are future-proofed. Sensors can help us assess how space is being used and can give operators insights to reconfigure space to better meet the needs of occupants. In the future, the way your office is designed might change every day based on the intended use for that space. It will be fluid and flexible.
This vision for the future is already here but just not evenly distributed. Pay a visit to SmartScore platinum buildings such as 1700 M St. in Washington, DC, and 151 North Franklin in Chicago. In 10 years, this will become the norm.
CO: What will this widespread change in building technology mean for WiredScore?
AB: We consider WiredScore’s responsibility to be the North Star for the real estate industry in terms of connectivity and smart tech ratings and standards. We strive to be the most forward-looking company that analyzes current trends and technological advances, then transforms that data into a roadmap for landlords and developers to upgrade and evolve their buildings to meet ever-changing tenant expectations. We will always need transparency into where the best technology is located—and where it isn’t. The best space decisions should be driven by accurate, reliable, and up-to-date insights. That’s where we come in.
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