The Platform

Photo illustration by John Lyman

Measuring a building’s intelligence isn’t for novices.

Several companies are entering the real estate market boasting an “innovative” method for objectively assessing the intelligence of commercial buildings. They base their measurements on various technologies and applications operating as part of the building’s amenities. However, their claim of being the first to introduce such a tool in 2020 is fundamentally flawed.

This assertion reveals a distinct lack of awareness about the intelligent building industry’s history or the smart building market. In fact, I authored a whitepaper in 1985 titled “Measuring a Building’s IQ” for NYU’s Real Estate Review, then the equivalent of the Harvard Business Review for real estate.

The IQ test I developed assessed six Class A buildings in downtown Seattle. It aimed to determine which provided the highest quality intelligent amenities across three key areas: information technology, communications, and building automation. And for the record, I also coined the term “intelligent amenities” in the mid-1980s to denote non-traditional amenities like redundant broadband connectivity and redundant power to a building. Conventional amenities like air conditioning, security, parking, and elevators were already a given.

I devised and administered this test for JMB Realty, who wanted to evaluate the ROI of their $20 million upgrade to the Seafirst Building. As a director at Arthur Young (now Ernst & Young), one of the big six consulting firms in the 1980s, I was at the epicenter of these assessments.

Initially, JMB merely wanted to ensure their dollar spent yielded an equivalent return in capabilities. But over time, curiosity about their competitive standing emerged. Would this retrofitting project give them an edge over other downtown buildings?

The test’s essence was to measure and compare the intelligent amenities available to building tenants. Instead of getting bogged down in technical jargon and intricate definitions, all services and capabilities were distilled into a composite score. The IQ of the building if you will. Thus, a potential tenant could choose based on their needs for intelligent amenities—a building rated at 450 would be deemed less desirable than one rated at 625.

This pioneering comparison of Class A building amenities in a major downtown market was published in several publications, including Real Estate Review and Commercial Renovation. It even graced the cover of Telecommunication Products & Technology in November 1985.

The method offered a fresh perspective on commercial real estate comparisons, a concept I later explored in a 2014 book.

Reflecting on this a decade ago, Frank Bisbee remarked, “In 1988, he was invited to write a chapter further expanding on ‘Measuring a Building’s IQ’ in Johnson Controls’ Intelligent Building Sourcebook…He revolutionized how buildings were assessed and compared, but current appraisers still neglect intelligent amenities in their valuations. The practice of measuring building intelligence has been around for decades.”

Today, the need for such assessments is even more pressing as the commercial leasing market contracts and competition for corporate tenants intensifies among property owners and management firms.

The burning question is: what technology and technology-based services should you integrate into a building to enhance its marketability? As the demand for “smarter space” grows, buildings lacking mission-critical applications risk becoming obsolete.

In the face of declining occupancy rates and diminishing building values, the commercial real estate market is grappling with complicated issues. The last thing we need is digital pretenders falsely proclaiming they’ve invented a new method to assess building intelligence. Their surface-level research on historical practices is glaringly insufficient. If they overlooked past innovations, how can we trust their current perspective?

James Carlini is a strategist for mission critical networks, technology, and intelligent infrastructure. Since 1986, he has been president of Carlini and Associates. Besides being an author, keynote speaker, and strategic consultant on large mission critical networks including the planning and design for the Chicago 911 center, the Chicago Mercantile Exchange trading floor networks, and the international network for GLOBEX, he has served as an adjunct faculty member at Northwestern University.