Originally published to Unissu, written by Will DarbyshireA building, as an asset, can be an incredibly delicate thing. Such is the complexity and amount of individual processes and operations that, if just one element is managed unwisely, a building risks resembling a glass vase hiding behind a facade of bricks and mortar.In this time of digital transformation, where customers demand more, competition is rife and multi-directional, and asset value is dictated by a wider variety of factors than ever before, buildings have, it could be argued, grown more fragile still. Especially when you throw in the current state of the climate, and real estate’s immense responsibility in controlling the situation.But, such is the beautiful balance of transformation that, as digital innovation increases the demands on building owners, landlords, and managers, it also delivers technological solutions which either aid the handling of these new responsibilities or completely change the paradigms of possibility.Perhaps the most vital and impactful of real estate innovations, and one which ticks the improving-everyday-processes box as well as the new-paradigms-of-possibility box, is data.David Walsh is the Founder and CEO of CIM, a building analytics company which claims to integrate building intelligence, machine learning and technical engineering support in order to increase the efficiency, sustainability, and, ultimately, profitability of real estate assets. Headquartered in Sydney, Australia, the company has recently expanded in the UK and other parts of Europe.To learn more about the best practical applications of building data currently available in the real estate industry, I met David in a central London cafe. I started by asking him how the UK expansion has been going.“The office here has got off to an awesome start,” David says, checking his inbox one final time before closing the lid of his laptop.“This is our major region of growth at the moment. We’ve already got a good brand over in Australia, and it’s great to get such a positive reception over here, too.”David got his education in computer science and, by 2013, was working as a commercial manager in environmental hardware, software and consulting services. He found his way into real estate after being inspired to create his own company; inspired by the lack of capture and usage of granular data from existing equipment and sensors in order to run buildings more efficiently.“Companies were data-rich but information poor,” he says, “and there was no focus on finding or fixing the root cause of wastage.“I saw how people were trying to optimise buildings using electricity submetering, the systems that allow a multi-tenant landlord or property management firm to measure how much each individual tenant should be billed for utilities.
“I just thought there was a big black hole, a real opportunity to improve the efficiency of buildings simply by gathering, garnishing, and normalising the data that already exists across all buildings."
“So, I built a software platform that captured all of the existing building data and combined it with genuine intelligence in the form of machine learning and rulemaking to identify which equipment and systems within a building were underperforming. And then, of course, it was clear we would need to provide the much-needed technical support to the building owners or operators as well, to ensure that clients get the outcomes they’re looking for. This is a model people are very comfortable with. Because what we find in the smart building or building optimisation sector is, there are no spare engineers within a property company. Capital is extremely tight.”Much of CIM’s early success in Australia was down to how many of the potential barriers to sale David and his team eliminated from the outset. Providing the aforementioned technical support to clients was one of those potential barriers, as was, David tells me, price.“Our cost model is a SaaS model, free to install and then a monthly fee with no lock-in contracts. This idea of giving property owners control was new to the market.“If you look at some of our clients, Brookfield, Lendlease, etc, they want to see technology and SaaS businesses make optimisation easy and accessible. This means your usual sales guy approach of ‘everything is fifty grand upfront’, even though they can’t guarantee you any sort of results, is no longer acceptable.Related: The big bad world of Building Analytics and what to look for
“For us, from the very start, it has all been about how you make the user experience better for the building owner,” David says, but it’s not just building owners that CIM is serving anymore.Products and services evolve and, as they venture more deeply into their verticals, new stakeholders and potential users tend to appear.“The thing with our technology is that it’s gathering more and more users along the supply chain: engineering consultants, maintenance technicians, independent sustainability experts, and so on.“These people already have relationships with the building owner, but they don’t have access to software and they don’t have access to data. This means their potential is very constrained.“Let me give you an example of a project, to give all of this context: Consider a very large commercial building, like an airport: the performance of these spaces cannot be based on a fix-and-forget philosophy. The approach must be far more holistic."“Our relationships have shown us, time and time again, that there are so, so many people who want access to building data. The engineering consultant wants to know how to improve the performance of the equipment they supply. The building owner wants to improve energy consumption which, in turn, will improve ESG (Environmental Sustainability Governance) performance. And the facilities manager wants data to make contractor maintenance more transparent as well as improving his or her ability to look after tenant issues by quickly identifying the root cause of problems and monitoring and sharing progress on fixes.”The scope and potential of building data is unquestionable. Rarely do technological innovations serve such a large majority of market stakeholders. Each stakeholder, however, must be provided with the appropriate data, at the appropriate time, and in the appropriate manner. Furthermore, all of this must be tailored to each and every individual space.If this can be achieved, however, the rewards are substantial. For David and his team, the two most valuable of these data by-products are transparency and accountability.
Data for Transparency and Accountability
CIM’s flagship platform, PEAK, takes data from all HVAC appliances, lifts, pumps, chillers, indoor air quality sensors, outdoor weather sensors, lights, and so on, within a building. Then, and this is the vital part, the software normalises it.“Normalising the data is central to everything,” David says, “mainly because it’s such a big problem in real estate at the moment, right?“Different vendors call different things different names. If you’re a property owner who has many properties across multiple portfolios, how do you achieve data transparency if nothing is uniform? You can’t.”The transparency which is created when you normalise data is vital; it enables the user to understand and compare building performance across hundreds of buildings regardless of their size, classification, or location.It is this increased transparency which then allows PEAK to implement and manage accountability.“99% of people in the supply chain want to do a good job,” David says. “Nobody wants to lose a contract or damage their reputation, but because they don’t have any shared data, their success is limited. Even those few who do have access to data, they don’t have enough of it to gain any insight.“The opportunities for improvement presented by this fact alone are unbelievable. But the point I want to make is, when a building owner and their team have full access to transparent data, there is a much greater sense of accountability.“Giving the property owner and their team full access to transparent data allows owners to not only see if the equipment is working properly but also if it is being handled and cared for wisely in order to operate with zero-waste.”David pauses in thought.“That underlines everything we do,” he continues. “Minimum impact on the environment.”Related: CSIRO "Best in Class" report - software solutions focused on commercial building energy efficiency
Sustainability and profitability, hand-in-hand
Sustainability has been on David’s mind since the start of his real estate career. He knows, as we all should, that this industry is responsible for around 40% of all global carbon emissions, and also knows just how much potential there is for technology to provide simple, yet vital, improvements.“If you ask me,” he says, “this is why we’ve been able to put together such a strong and passionate team at CIM: the good that we can do for the environment.“Some of our team members don’t need to work, ever, but they choose to work with us; they’re always in the office. They’re doing it because they believe, just as I do, that we’re building something really unique - software that can actually affect the physical world in a positive way.“Look around: the world is facing so many catastrophes, such awful things are happening to our natural world. As a result, despite being much later than it should have been, the world is finally shifting from a high-carbon model to a low-carbon model. As we do, there are an awful lot of people who are going to lose money.“But, those people can mitigate all of this potential loss by embracing the ways that software can help.”The great hope that the world can have is the fact that increasing sustainability in the built environment is, when done right, also a pathway to greater profits; such is the magic of reducing waste.“It is a clear fact that our software doesn’t only make a portfolio more sustainable, it also makes it more profitable through reducing outgoings. When you reduce outgoings, it doesn’t only reduce operating costs, it also makes the asset itself more valuable.“For one of our clients, we took AUD 500,000 off the annual outgoings of their shopping centre by optimising performance and reducing waste. With the asset being capitalised at 5%, that’s like adding (500,000 dollars times 20) AUD 10 million to the value of the asset.“This is because we can get the building to peak performance and then, importantly, protect that improvement. This means the saving is maintained through the years, therefore making the property more valuable.“Sustainability is now being treated as a leading metric in real estate because people are starting to recognise that those who are doing sustainability correctly are likely the ones doing other operational things correctly, too.“When a client invites CIM into one of their buildings in order to test whether the company can actually deliver on their extraordinary promises, the improved efficiency and sustainability always leads to the client requesting a roll out across all of their buildings.It would be obvious to assume that this is good for CIM simply because more buildings equals more money. But, their rapid growth of recent months has actually been even more valuable in a different way.“The more buildings that we enter,” David says, “the more lessons the software is able to learn and the more efficient and valuable the process of onboarding, and the overall results, becomes. With every building we enter, the better we get. It’s fun.“For our customers and ourselves. it’s all about knowing how to utilise all of your learning in order to improve and adapt operations. This process is never truly finished.”Related: Delivering triple bottom line one byte at a time (video)
Constant learning, constant improvement
“I find that all of our clients want to close the loop, they want to take learnings from one building into another. This is because the process of doing so is quicker and more efficient everytime, which means that ROI arrives more quickly, too.”CIM’s customer success team is central to this ongoing improvement: the client benefits from a dedicated programme of learning that lasts well beyond the onboarding process. To illustrate, we can return to the theoretical airport mentioned earlier.When CIM first enters the airport, there are thousands of data points already flowing and meandering through the air. Air quality; the position of each individual valve; room temperature; the speed of every pump, and so on.“All of this data is already being used to control the equipment throughout the airport,” David says, “so the first thing we look at is how it’s all being monitored. Then, we analyse every nuanced aspect of it to assess efficiency and, through our software, identify any anomalies.”“When we spot anomalies, we ask questions: why is this equipment performing in this way? Why is this pump at 100% speed, whereas all these other variables suggest it shouldn’t be? We ask this because anomalies usually indicate some sort of fault or inefficiency. Once we have done this across the entire property, the results are fairly undeniable."“Roughly four months after we start, we would expect to see a 15%-25% reduction in energy usage, and significantly improved collaboration between on-site operations staff and their contractors (plumbers, electricians, etc).“This second point is a huge benefit of machine learning and AI: whereas once upon a time contractors would have to investigate the possible causes of faults, they now have a live list of exactly what has happened in the past, when it happened, how it was solved, as well as how much it cost in terms of money, energy, and the impact of the equipment’s life cycle.”Another valuable result of CIM’s constant-learning-philosophy is the discovery of new use cases for, and potential benefits of, a technology or solution. Just as they have been learning how many different stakeholders their solution can serve, CIM has also discovered that there are certain situational contexts which PEAK is ideally suited for: one of these is during the Defects Liability Period (DLP).The DLP is the period of time when a new building, along with all of its individual pieces of equipment, is being handed over to the building owner but is still technically the responsibility of the various subcontractors.“The general attitude of building owners,” David says, “is, this is your equipment until you prove it’s working properly, only then will we take ownership of it. It can be a very difficult time due to how many different aspects need to be tested and retested to ensure that everything is running at peak performance both individually and collectively."“We’ve discovered how popular our solution is during this time - it allows the entire supply chain, from top to bottom, to see what’s happening across the entire property. With the addition of our on-site customer success team, a difficult and complex period of time is made much easier.”Related: How digitising property assets drives smarter, more efficient building operations
Customer success teams and customer experience
In David’s mind, customer success is second only to sustainability and has played an equally central part in CIM’s success.“I find that one of the things missing from PropTech and real estate is often trust between the two. Unless you have a good team behind you, you’ll never get the trust of real estate.“That’s why all of our spending in the early days went towards building our engineering capabilities. I knew that this was how we could best solve our customer’s problems and that by solving these problems we would get great word-of-mouth marketing - still hugely important in real estate. So, essentially, the budget we created to build an engineering team was our marketing budget. We gained traction through good results and we also gained a level of trust from the market which marketing strategies rarely deliver.”CIM’s customer success teams are made up of highly qualified building service engineers - mechanical, electrical, mechatronic. These are the people who work directly with building owners and operators. David tells me that, after eight weeks inside a building, his success teams tend to know more about the nuanced working of the building than the contractors who have been working there for ten years do, all because of their ability to mine the data that has been there all along.
It’s such fun to see what happens when you put the power back into an engineer’s hands
“It’s such fun to see what happens when you put the power back into an engineer’s hands. Plus, when they have access to all of this data, and the intelligence in the software points exactly to where the problem is, you can scale the value of an engineer across dozens and dozens of assets. And, when you’re giving engineers this sort of insight and knowledge, you’re also upskilling them, which gives the individual employees a great boost.”As well as creating a great customer experience for their own customers, building owners, CIM also helps those building owners provide a superior experience for their customers: tenants.“I can tell you about one of our clients in Australia: 60% of their tenant complaints were related to the air conditioning system. If such a big chunk of complaints are focusing on the same problem, that’s clearly a terrible customer experience.“So, this data not only helps reduce the embedded carbon footprint of buildings, but also the efficiency of the operational side, too. This simultaneously makes the whole asset more profitable and the tenant experience far more pleasant. And, because the data is allowing all of the equipment to run at peak performance, everything lasts longer.“And when equipment lasts longer, there is less need to build a new pump, chiller, or fan. The embodied energy it takes to produce aluminium and steel is huge: data and intelligent technology can significantly reduce this.Related: How smarter analytics can help time-poor building services engineers
Rapid ROI and always looking forward
CIM stands for Continuous Intelligent Monitoring. Continuous means never-ending and that’s exactly how David sees it.“Our business model is to get in, deliver tonnes of value, help navigate through the digitisation of the asset’s processes whereby they get improved ESG, and then dive into the data-driven maintenance to help the supply chain operate more efficiently and achieve smarter capital planning.“Because we get the performance data of all of these pumps and fans and chillers across hundreds of properties, we can help our clients allocate capital more efficiently and therefore return more money to the shareholders.“Plus, if they have a carbon-neutral-by 2030 or 2050 strategy, we are able to tell them the kilowatt per hour reduction for every pound, euro, or dollar they spend.”
The average payback time for our tech is 5.7 months. In many cases, though, it’s much faster than that
So, the big question, perhaps the only one that anybody reading this will really want to know, is: what is the return on investment (ROI)? How long do clients have to wait to start seeing profits from their partnership with CIM?“The average payback time for our tech,” David says, “is 5.7 months. That’s how long it takes for the solution to become cash-flow positive. In many cases, though, it’s much faster than that. Because it’s a subscription-based platform, a single month’s subscription fee might lead to a twenty-grand saving almost right away.”Little surprise, then, that the company has seen 13% growth, month-on-month, for the past 18 months.“The late-adoption industries are often the most exciting to me,” David says as we’re packing our bags at the end of the interview. “Here, in real estate, we are able to show people a whole new way of running an asset, and the data tells its story very clearly.“In a world where arguments are rife and the facts are scarce, the indisputable truth of data is a crucial and valuable commodity. Find out more:
CIM's PEAK Platform is a best-in-class building analytics SaaS technology, improving efficiency, sustainability, and tenant comfort across property portfolios. Discover more by watching a demo.