Motili PropTech Interview Series: Vincent Dermody, Managing Director, CohnReznick

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Vincent Dermody is a Managing Director at CohnReznick and a PropTech, Smart Building Specialist. Vincent started out as a civil engineer back in Ireland. After University, Vincent found the opportunities were stronger in technology than they were in civil engineering, so he ended up veering into technology, became a technologist, spent some time working with companies like Intel and Level 3, as well as a lot of Silicon Valley technology firms. Over time Vincent’s career evolved back into civil engineering and subsequently the smart building sector.

Over the last decade Vincent has been with CohnReznick, a company specializing in technology for commercial real estate across all levels – from investment fund management software, to property accounting, to smart buildings. 

What makes CohnReznick unique in the proptech space?

CohnReznick offers a unique understanding of the entirety of operating assets – while their competitors are very focused on the engineering tech for running a building, many lack a full understanding of the investment paradigm or the operational paradigm. 

With this holistic approach CohnReznick dials in on what the investor wants to see, what the actual operator wants to see, and what the engineers want to see.

What are smart buildings?

Buildings have been connected by IoT long before the term was created. Smart buildings are an evolution of technology and living spaces, edging closer together. IoT is the end-of-nerve structure in buildings, meaning smart buildings can learn and evolve. Using AI, connected buildings will be able to share data and optimize building systems. 

We think of smart buildings as value centric. What can we get out of the building? What’s the value? Some tech adds value, some tech doesn’t. It is through shared, analyzed data that we will determine which is which.

What do you feel is the most interesting trend in smart building technology and the PropTech this year?

It’s more of an event than a trend, but I think COVID-19 is going to bring a lot of reality to the technology paradigm. It’s going to cause a sharpening of the focus around what we can do. We will do things in a tactical lens because we need to respond to wellness, health, low-touch, low-friction. It’s not necessarily the strategic position we want to take. We’re probably going to forego some other things that would have been relevant in this year, to compensate for COVID. 

How has smart building technology adapted to the pandemic, and are these benefits for CRE and multi-family owners and operators, and implementing some of the technology today?

There are a lot of tactical changes happening in the technology space at the moment, with COVID. I’m seeing a lot of new types of sensors being implemented in buildings. I’m seeing a lot of moves toward frictionless interfacing, like reducing the amount of buttons and things people have to touch.

All of this is good because that stands for long-term benefit anyway. At this moment in time, the idea is to de-densify the use of space, to reduce the amount of people per square meter in an office.

Prior to the pandemic we saw the rise of workspace-as-a-service models like WeWork and similar companies. This model relies on maximizing the density of use of space, so now we’ve got a conflict that’s going to have to be resolved. 

The short term tactical solutions are in conflict with what we are working toward, strategically, in the long term. What we’re going to do in the short term to get through this pandemic is probably not aligned strongly with where we’re going to go with the use of the space in the long term.

From your perspective, what do you feel will be the next big trend in smart building tech?

The biggest trend that’s not been answered for many, many years is the concept of digital discovery and digital commission. What I mean by that is the ability to add more tech to a building. If you commission a building today and something goes wrong with the lift in a month’s time, and the tech comes in and he changes a component and replaces a component, you don’t recommission everything. You just basically operate as you were.

The problem with that is you get a digital decay. That’s basically where digital wellness of your building starts to decay over time, every time somebody takes a screwdriver or every time something is ignored. The actual operational efficiency, operational effectiveness, the routines, the algorithms start to decay.

Digital discovery, digital commission is where instead of commissioning being done by people who go around and check for light bulbs, that’s done digitally. If you can diagnose digitally, you can digitally recommission every day. The building would be self-diagnosing the same way as your computer does at the end of the day. Assesses what it needs, applies the actual changes that may have occurred in that day, because somebody fitted a different control valve or a sensor. 

There may be a sensor over the door that was commissioned on construction. That’s been replaced with a newer model. That’s now sensed, it’s discovered, and the actual commissioning is digitally redone. 

What that means is the building is constantly moving and learning rather than actually commissioning against the baseline on the day it went live and then it just decayed away from that, for five, 10 years until it’s refitted again.

What is an interesting case from your consulting you can share where you’ve made a real impact changing building dynamics?

I was working with some clients in the AsiaPac region, pre-COVID, helping them leverage how they sell their space. They had some surplus space they were trying to move, and it was turned into a space-as-a-service environment where it became elastic for any of the tenants there.

The tenants were able to treat the common space as an extension of their own meeting space. The owners were able to lease the space on a case by case basis. The revenue was three or four times what they would have normally got because of the actual density of use. Again, that was a model that preceded COVID, but it was an interesting opportunity to see how you can change your relationship with the tenant.

A tenant may not need to rent or lease the square footage they used to have, but they now will need access to other supporting facilities. The building operator built out that network of facilities, so the tenants could get workspaces, facilitate meetings, as a service. It was effectively like a app store for the tenants to use that space. This attracted more innovative, more startup, more agile tenants and that indirectly caused a change and shift in the culture of those around the building. 

The culture tilted slowly towards the young tech innovator types by providing those services as part of the on-demand services, rather than a traditional office space model.

You were recently on a Propmodo podcast, where you mentioned the evolution of IOT. What do you feel is the next generation of IOT evolution and where do we go from here?

I’ll go back to what I said before about discovery. I talk about four to five layers of sophistication in technology, as in how you got to bring it together. 

The first layer is just basically smart and informed. That’s where you have a network, you have a sensor, and you’re getting information out of it. You are passive, your building is not acting. It’s just basically collecting information, data flows to a database, data flows to a report.

The next level is smart and direct. This is where you’re running algorithms and workflows on top of that data. And you’re saying X, Y, and Z has happened – trigger a workflow. This workflow could trigger a cleaning event, trigger a maintenance call, etc… 

The next level is smart and control. That’s where you’re saying something has been sensed, we are using an algorithm that we’ve learned from, now I’m going to control. You’re starting to turn heating up or down, or you’re going to stop people coming in through gate X, because you want to reduce the foot traffic in an area because of COVID, or you’re trying to reduce the density on floor X. At this stage you’re starting to actually control things based upon the sensing. 

Finally, level four is where you’re putting yourself inside the processes of your tenants and that’s where things get interesting… 

Imagine you have a new employee starting work in your commercial building today. What are all the stages that person will go through in the first three to four hours? They might be assigned security access, a laptop, a locker, a desk. Is this currently automated by a workflow? With tech, before your employee arrives, they get a QR code on their phone, walk over to security, already have temporary access. They get instructions on their phone to go to level X, locker Y, use their app to open their locker. In the locker is a laptop which is unlocked via bluetooth. On the laptop is a notification that tells the employee what meeting they need to go to. This is the process of connecting people and buildings, through IoT.

When we talk about – “Where do sensors and IOT go from here?”- it’s not that IoT becomes more clever, the use of it and the integration becomes more and more part of the world of your tenants, not just part of your building.

What do you feel is a potential game changer in technology, which is simply not achievable yet due to computing and/or energy limitations?

I’m more positive about technology than that. I think most things are achievable. I think the problem we’re having with technology at the moment is not technology. The problem is with how we build buildings and the fact that each building is almost an independent project. And if you look at a portfolio of buildings, there’s inconsistency across everything they use technology-wise. 

How can you run this collective technology intellect if it’s individual, on a building by building basis? It’s effectively trying to have a family in one home but nobody speaks the same language – that’s the challenge we’re having with buildings – it’s not the technology.

The means by which we build buildings doesn’t allow for this cookie-cutter integration of technology. A lot of that comes down to cost – when you put a building up, you build a contract and you get the cheapest guy or the cheapest provider, and you just put that in and make it work. 

If we really want to leverage the power of smart buildings we’ve got to apply consistent technology across the portfolio. 

If you have a thousand sensor inputs in a building, well-orchestrated and connected to other buildings in your portfolio, that’s more powerful than twenty thousand inputs in a building disconnected from a portfolio network. With the latter all you’re getting tactical noise, you’re not actually getting technical intelligence.

What do you feel CRE and multifamily executives should know about technology right now, but don’t?

I think it’s advice that you could have given 20 years ago, 10 years ago and five years ago – don’t get fixated on the technology. Don’t get fixated on the shiny parts of technology. You need a strategy. 

If you go shopping when you’re hungry, you’ll buy stuff you don’t need but you want. Technology can be like that. If you don’t have a strategy, and you don’t have a plan, the first guy through the door with a shiny technology looks interesting.

It’s important to boil strategy down. What are we trying to achieve? We’re trying to achieve some experiential goals. We’re trying to achieve some environmental goals. We’re trying to achieve some investment goals. Understand what your goals are, understand how you’re going to break those down into achievable objectives, and then understand how technology is going to help achieve that. 

A lot of the proptech that’s out there, it’s very, very useful; very, very clever. But, when you actually scrape away the paint, you start to realize… what’s the point? 

An example I can give is: in the last three years, there have probably been a hundred room booking systems I’ve come across. Do we need that many room booking systems? It’s a case of actually understanding what are the things that matter when it comes to a client experience? What are the things that matter when it comes to building? 

You need to focus on three key value pillars in a building. You drive up, drive down and differentiate. You drive up experience, you drive up value, you drive down operating costs, you drive down friction and then you differentiate by delivering something that no other building is providing.

If you actually focused on those three value pillars in your strategy and then apply your technology to answer those questions, then you’re using the technology in a way that makes sense.

These are the keys to building a successful smart building ecosystem.

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