Ron Stupi is President of EMG, a Bureau Veritas subsidiary that is the country’s largest technical assessment and project management enterprise in the commercial and government-owned real estate sectors.
As investors and developers in CRE and infrastructure plan for 2019, which issues and trends should they be examining today?
Finding ways to improve asset performance is every investor’s golden fleece, starting from the design stage, through technical inspections during construction, to the time environmental and technical evaluations are made prior to a potential sale.
Here are some areas to watch:
ADAPTABILITY: Corporate agility is one of the never-ending themes of executive retreats and graduate courses in business schools. For good reason. Agile enterprises that know how to forecast accurately and adapt quickly survive and thrive. Others are left behind.
For example, owners and developers need the ability to accurately forecast construction issues and rapidly adapt. They must also be able to get ahead of compliance and budgeting problems, as well as to deal effectively with new competition and changes in the business environment. Predictive analytics, business intelligence, access to real-time data and digital tools for developing options are essential to making a company agile and adaptive.
DIGITALIZATION: The CRE industry is being transformed by digital technology and interconnectivity. Investment in the right type of this technology is not only important in keeping up with competitors, but also is essential in gaining an edge. New builds – intelligent buildings - are connecting building management systems with business intelligence tools and are providing new levels of energy efficiency, thus reducing operating costs over the life of an asset. Digital systems today use robotics, IoT and cloud computing to manage digital lighting, temperature control, security and surveillance, occupancy movement and patterns, Wi Fi and networks, elevators, etc.
Before making a decision on digitalization, companies must decide which technology or package of technologies will work best for them. Where to invest first? What share of CapEx should be devoted to digitalization? Is it worthwhile to add digital systems to legacy properties?
Moreover, companies must be keenly aware of cybersecurity threats before acquiring any new tech.
My company, EMG, has extensive experience dealing with all of these elements. We specialize in capital planning for CRE and government infrastructure projects, plus project financing, program/project management, and engineering and environmental assessments. EMG likewise provides clients with consulting and advanced technological tools to manage their businesses.
REDUCING MAJOR COSTS VIA ENERGY EFFICIENCY: Focusing on sustainability and energy reduction should play an important role in a CRE company’s strategy for 2019.
Many businesses that own large warehouse or manufacturing structures with flat roofs have already covered their roof surfaces with PV solar panels to cut down on electric bills. Some lacking flat roofs have built solar fields in sites around their properties.
Investments in energy efficient technologies typically raise initial costs for new builds, but clearly pay off over the medium and long term.
Some of these are:
- Different levels of LEED certification
- High-efficiency HVAC and LED/CFL systems
- Exterior skin that adapts to the needs of retaining or reflecting heat, plus insulated window glass
- Digital controls to adjust energy use outside of working hours
- Efficient water-handling and reuse systems
- Energy-efficient appliances (when applicable)
Some of these options can be used in older properties as well, generating sound financial and environmental results.
For any type of property, lower energy costs mean reduced OpEx, improved net income for owners, and better retention of tenants.
Bureau Veritas works with companies in the construction and real estate industry to help them manage all quality assurance, health and safety and environmental aspects of their construction works, from design to completion. Bureau Veritas also provides support in project management and reviews conformity with all regulatory requirements during the design and construction phase. Additionally, it provides technical support at design stage, soils and construction material testing (on site or in our laboratories), and diagnosis when needed. To learn more, visit www.us.bureauveritas.com.