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JLL Forecasts Investment in Smart Buildings will be US$18 Billion by 2017

New report envisions connected and sustainable cities anchored by automated buildings and infrastructure

The world is getting smarter as smart phones, smart cards and now smart buildings are sweeping our cities, according to a report by Jones Lang LaSalle (JLL) that states smart building investment is expected to triple from $5.5 billion in 2012 to $18 billion by 2017. Buildings controlled by automated monitoring systems are becoming the norm rather than the exception and building owners, managers and investors are supporting the smart revolution as ‘smart’ buildings ultimately save on energy and operating costs.

Jones Lang LaSalle’s in-depth analysis, entitled The Changing Face of Smart Buildings: The Op-Ex Advantage explains how today’s building technology investment decisions are delivering return on investment (ROI) while shaping the way humans, machines and buildings will interact in the decades to come. Building owners, operators and investors are under pressure to manage costs, risks and energy consumption and are looking at smart building technologies to help their company’s triple bottom line (people, planet, profits).

“Smart building technology investment is like giving a doctor an MRI machine,” said Dan Probst, Chairman of Energy and Sustainability Services at Jones Lang LaSalle. “It allows deeper diagnostics that can provide significant results for building owners in meeting their financial, operational and environmental goals. Our research has tracked consistent positive ROI from smart building investments that have optimized individual building and portfolio performance across the globe. The technology is here today, but most property owners aren’t aware of the ease and sophistication of managed building automation systems today.”

Rising Expectations, Plummeting Costs

“Smart Building Solutions is the convergence of building automation technology and real time information management enabling operational efficiency and sustainability within the ecosystem of the building,” explains Dilip Rahulan, founder and executive chairman of Pacific Controls Inc., creators of the technology that powers JLL’s smart building platform, IntelliCommand (a predictive analytic system that controls properties from a central command center through continual commissioning). “They use ‘machine to machine’ (M2M) technologies and can automatically interact and adjust without human intervention. This efficiency has created a short investment payback period. Rather than acting as a capital expense, smart building technology is now considered an operating expense that can pay for itself in under a year.”

Smart Buildings – No Brainer?

The cost of automated building technology has fallen as adaptation has increased. For example, intelligent lighting components that cost $120 four years ago, today sell for just $50. New local and federal government regulations, including mandatory energy consumption disclosure in some cities, are pushing building managers in the direction of smart buildings. Also, smart building systems enhance landlords’ ability to engage with tenants and tap into their growing desire to be sustainable.

“Converting to a smart building is a no-brainer investment as new M2M technologies simultaneously reduce cost, improve energy efficiency and shrink carbon footprint,” observed Probst. “Our results demonstrate that smart buildings are a triple-bottom-line home run. The deployment of smart building technology is the right strategy for embracing and profiting from trends in the built environment that will only get smarter. Owners can’t afford not to get smart about these technologies.”

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