Building owners in the know are increasingly looking at two emerging innovations that could dramatically disrupt the entire construction and property management market. I’ve been writing about digital twins and blockchain technology for the past year, and was excited to find out what’s percolating for building owners and their business partners. Tobias Decker, Head of Line of Business Real Estate at SAP, recently gave me an early look at a proof of concept SAP has been exploring that applies digital twin and blockchain technologies to the real estate industry.
“We began thinking about digital twins for buildings, and quickly discovered as we worked with our ecosystem of customers and partners that blockchain technology might be useful as well,” said Decker. “There are so many parties in real estate transactions, from building design through construction, tenancy, maintenance and ownership transfers. Our vision is to use these innovations for a unified digital representation of every asset that comprises a physical building collected via sensors across its life cycle. Everyone involved receives their digital key that opens up all the relevant information they need.”
According to Decker, adding blockchain technology to digital twins is like carving information in stone. “Blockchain provides a neutral collaboration and information-sharing platform that each participant in a real estate situation uses to support processes including contracts, regulatory compliance and transactions,” he said.
Although it’s early days, SAP design thinking workshops have uncovered some brilliant use cases. Here’s a sampling of who unlocks advantages from having a digital key to all the updated, comprehensive, and secure documents associated with real estate transactions.
Architects can use insights from accurate, comprehensive data to plan more efficient buildings.
Institutional investors would gain more transparency to calculate potential ROI faster based on more reliable data.
Building owners would have a digital “certificate” that all required audits have been conducted, immediately proving compliance with safety and other regulations.
Real estate managers could compare costs for buildings to make better buy/rent decisions across portfolios.
Tenants would have benchmarking data like market value for more informed renting, buying and selling decisions.
Facility managers could track the number of cars in the parking lot, people at their desks, or even elevator traffic by floor and time to optimize usage and provide a better experience.
Insurers would have a clearer window to assess individual risk and make more competitive offers.
Service providers can use information to improve energy efficiency in the building, reduce machine down-times, and improve equipment performance for cost-savings.
Snack bar operators would know in real-time which protein bars or coffee flavors they need to replenish where and when, improving inventory and delivery efficiency.
New owners or tenants don’t have to start from scratch to get important data – everything from audits to maintenance information is already in the system.
The above list is by no means exhaustive, but provides a quick snapshot of how digital twins and blockchain could transform the real estate industry as building owners and everyone in their orbit know it today. Digital twins and blockchain won’t immediately eliminate the avalanche of documents and redundant, time-consuming processes surrounding real estate transactions. But for owners who start exploring what’s possible now, the sky’s the limit.
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