It’s clear that digital buildings can impact efficiencies, people and the environment – in all property types. To vet the opportunities digital can bring, C&AM companies should weigh several actions. Among them:
1. Include corporate real estate management as an essential part of enterprise strategy
A strategic view of real estate helps encode resilience into a company’s DNA. When the war in Ukraine began, for example, some chemical companies had to pivot from suppliers in Eastern Europe and find alternative sources of raw materials such as cobalt and nickel in the Asia-Pacific region. Finding the right plant facility, at the right scale, with the necessary energy and mineral sources can be challenging for corporate real estate managers in the sector.
Embedding CRE into the business strategy also gives C&AM companies the flexibility needed to focus on their core portfolio needs in the context of what aspects of the business may be added or jettisoned.
2. Conduct a careful assessment of needs before investing in digital
“You need ROI on people or ROI on operations to invest in digital,” Gottschalk says. The costs are substantial, and the results will have far-reaching consequences for the enterprise. Still, the cost of forgoing the digital revolution is obsolescence.
“To be successful, you have to understand real estate for offices, but also for production, labs, R&D, and energy and wastewater management,” Schwalm says. “You also must consider the relevant regulatory requirements. Beyond real estate assets, you have to consider the interface with IT and the interface with operating technology, as well.”
3. Gain a clear understanding of digital real estate’s effects across the organization
The advantages of deploying innovative real estate technologies are not lost on C&AM executives, based on their responses to our real estate survey. Some 88% are interested in the deployment of innovative real estate technologies, and 91% are curious about smart building options. Digital real estate impacts can include not only the impact on efficiency, people and sustainability, but also the tax benefits to be realized through both incentives and the capabilities of a smart building to pinpoint usage and enhance identification of tax risk. Understanding both the upstream and downstream opportunities in digital real estate can position an organization for transformative opportunities.
Thank you to Amanda R Alexander, EY Strategy & Transactions Manager, Corporate Real Estate, Ernst & Young LLP for contributing to this article.