Deb Noller: Facilities Management As We Know It Is Dead

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Deb Noller, co-founder & CEO of Switch Automation discusses how owners and developers can take advantage of the new business models and revenue created by digital facilities management.



Deb Noller, Co-Founder & CEO, Switch Automation




This video was filmed at a Peerspace, the leading online marketplace for meeting and event spaces. Click here to Learn More.

Very shortly, facilities management as we know it today will be dead and a whole new digital model will spring up and take its place.

All across the property and the real estate industry, people are adopting new technologies and using data to create really interesting new digital business models. I'm Deb Noller, I’m CEO of Switch Automation, and we have a smart buildings platform, and we're seeing a rapid transformation towards digital F.M. (facilities management). We're really excited about this digital F.M. because what we think is better building management will lower the impact that buildings have on our planet.

Research and experts have all indicated that there's going to be more than 3.5 billion new data devices posting information out of commercial buildings over the next two to three years. All of this new high quality data is going to create new business models and new revenue streams.

Real estate, as an asset class, is our largest asset class on the planet. We spend more money there than anywhere else. And real estate and the adoption of technology is being very slow. It's not just last across all of the industries it's dead last, and all of this is beginning to change. But why now? What's causing the industry to change now?

So the incentives are actually lining up to create these new business models, new technologies, and the adoption of data is causing new businesses and existing businesses to really understand how they're going to innovate for the future.

If you look at Uber as a company they didn't build technology and bring that into the market and try and sell it to the taxi drivers. What they did was they created really interesting, easy to use tech that scaled and it created a whole new market. So their drivers. And the customers adopted that technology and they adopted it in droves and they built a whole new business model. In this very similar vein, this is what's going to happen in real estate.

So the technologies are more available. They are more cost effective. They’re more deployable and increasingly interoperable. And this is being recognized right across the industry by the property companies themselves and also the service companies that are servicing the industry. They are looking at those technologies and bringing those in and creating interesting new business models and also brand new revenue streams.

We're working with a number of companies that we see as world leaders in the adoption of technologies. So this is a Canadian real estate company largely recognized as being best in class. They are using data to drive a better occupant experience. They passionately want to be the landlord of choice, and what they're doing is they're using data to proactively manage occupant comfort, and to understand where they have hot and cold spaces, and to address those before their customers are even aware of it.

We're also working with a large coworking space that is growing very rapidly, and they are really interested in using data and technologies to understand how space is utilized. So what they're really interested in is the design and the use of space around employee productivity and employee collaboration, that ultimately leads to workplace innovation.

So here's our three tips for how to survive this digital transformation of our industry.

First of all, you need to get your strategies right. So starting with a data strategy, you need to think about how you're going to harness your data, where you're going to host your data, who's going to own your data, how are you going to share that data with all the various stakeholders across your organization, but also outside your organization. You're going to have to think about data privacy, data governance, and data protection.

The second thing is, you need to get some really basic infrastructure right. So this is about getting your cyber security policies right, getting your architecture right, getting your data policies right, not just trialing every bright shiny I.T. device that's in the market.

And thirdly, make sure you're looking at your existing data and your existing systems, because you already have quite a lot in your organization that you can take advantage of. And if you get these things integrated first, and start to take advantage of those, you'll get really quick early are ROI (return on investment). So you'll get those early wins, you'll get the buy in of your management and the organization, and you'll get those wins that support your program going forward.

So commercial buildings are generating more data than ever before. This is going to be a brand new lucrative opportunity for many people in the industry. But what we would say to you is don't wait. Start now.

Mayank Agrawal: Finding Your Zen In A Noisy World

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Finding a quiet, comfortable and private technology enabled workspace on the go is no easy feat. Zenspace CEO Mayank Agrawal discuss the challenges of finding your zen in a noisy world and introduces concepts to help solve this problem, as well as maximizing use of underutilized space.



Mayank Agrawal, Founder & CEO, Zenspace




This video was filmed at a Peerspace, the leading online marketplace for meeting and event spaces. Click here to Learn More.

Hi everyone My name is Mayank Agrawal. I'm the founder and CEO of Zenspace. Today I want to talk about finding your zen in a noisy world. Zen to us stands for that quite, private comfortable moment that you need to conduct your business. It's the place where you can actually go and meet someone, take a video conference call or just focus on what you are doing but without the distraction of noise. Building on that, I'm gonna establish in this presentation through statistics, why is this a big need at this point in time. I will also talk about the lack of quietness or like lack of Zen spaces in public spaces like airports and conventions. I will also talk about what is Zenspace doing to address that need.

This was my life last ten years, working in a technology sales for last almost a decade. I used to go to conventions almost every quarter and now after 3 o'clock when I'm tired my legs give up this is what I used to do, find a little quiet little space where I can sit and do some work. I used to take my conference calls with my boss who wants to do a sales review when I'm traveling inside a car by turning on my hotspot and also at the airport. As you can see I mean whenever I travel I mean I have two hours waiting for the next United flight. Even at the open office layouts it's very interesting in the last decade. We talked about that the offices should be more open. There should be more collaboration and open office layout became the cool thing. But it's a paradox, suddenly the new research and new studies from Harvard and from many of the big magazines they are actually talking about the lack of privacy in open offices.

But what can the facility managers do now that they have invested billions and billions of dollars to set up those open open offices but there is a lack of privacy for taking a phone call taking a even topic to a remote workers which are outside the country switching onto some staggering numbers and some statistics which are my favorite while doing research for Zenspace. We came across this number - Global Business Travel in 2017 alone was $1.33 trillion. It's been growing at a rate of 5 percent on an average for the last seven years after we came out of the big dip. And it's growing faster than ever. By 2022 it will hit $1.7 trillion almost the size of a big country. On the other hand. Flexible work space is growing. We all know what is the valuation of we work today. We all know workspace as a service is actually evolving. How can you actually refactor your space so it's flexible is reusable? It's not an office space where you have a permanent office but it's reusable by another other companies simultaneously.

That's what flexible work space is all about. JLL did research as in 2017 five percent of the work space has already been converted into flexible thanks to companies like Regus and WeWork the trend will continue and it will become 30 percent in future. We are talking about trillions of dollars of commercial real estate here. The third number which I would like to establish is remote workers in North America 40 percent of employed Americans last year alone work either in part time or full time outside their offices, remote workers. 3.9 million employed Americans work full time outside their office. They did not have dedicated offices and these are freelancers consultants. These are photographers, videographers, architects, these are sales executive, C-level executives of large companies. We call them digital nomads. Digital nomads are those people who don't have a dedicated office but they work outside. And how do the work is what we are trying to address at Zenspace. Most of the time you have some privacy and quietness there. But when they go out in coffee shops and conventions and airports that's where the big problem is.

There is space. Space is not a problem, we talk about real estate being prime. We talk about you know, how can we actually create more space out of space? There is space out there, and we actually did this while setting up Zenspace. We did research of top 10 airports and convention centers across the world, and staggeringly, 40 percent of that space is underutilized. When I call them underutilized, they look like this.  They’re the the lobby, the patios, the hallways. Las Vegas commercial center as you know, the convention capital of the world, where you have consumer electronics show and shows like anybody, 4 million square feet 2.2 million square feet of which is actually exhibit halls and we're just the remaining of that is hallways lobbies and bodies. What do you do there actually? What can we do to convert those spaces? What can we do to convert those spaces without a huge transformational construction cost? What can we do to convert them into private workspaces?

We actually combined three experiences. We started with the on demand ubiquity aspects of Uber that my care is available within five minutes of me pushing that button. Wherever I am. Then the concept of WeWork which is workspace as a service. Workspace as a service meaning, how can you you reuse the existing space and share it with people? One of my favorites is Starbucks. The consistency of experience attribute which comes from Starbucks. When I'm outside of my home and office and I don't know where to go. I search for Starbucks. I search for Starbucks because I know that there is a Starbucks within 15 minutes of wherever I am. I also know that I will get free Wi-Fi, I also know the coffee I want to order and I have my space there so that to me is my Zenspace until we have enough Zenspaces and that's the consistency of experience, that consistency and guaranteed experience is very important. Uber does not offer that vehicle does that but it's not pervasive enough. Starbucks is pervasive. We combine those in our product called Zen Pod.

What is a Zen Pod? Zen Pod is quite comfortable and private technology enabled workspace which can be set up and as small as 10 square feet the size of a phone booth. And we have three different form factors for one person to person and four person and can be can be set up in less than two hours. Costs are really less than half of what you would spend on construction of a room and they are private, there are tech enabled that can be operated with a mobile app. You can actually download the Zenspace app and book that little room for yourself, pay for it and open the door yourself. It also offers a huge opportunity for generating revenue out of underutilized spaces. Through micro leasing and advertising it’s a big source of revenue. These are some visuals of how a looks like we play is what we have on offer boards upcoming in fairly large shopping mall in San Francisco where we are doing a pilot one of our parts has been placed in a coworking space as you can see here and we the biggest success we actually see and biggest need, we talked about conventions and this is where actually where we had this in one of the big events in Las Vegas. This is hard to find. The Zen moment is hard to find. And so we exist to solve the business traveler and remote workers problem. That's about Zenspace. Thank you so much.

Shannon Smith: Does A Building Have A Mission?

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Buildings need to have a mission. Shannon Smith, CEO of PointGuard says the mission of a building is not to save energy but rather to serve occupancy comfort. Smith shares how to weaponize your building management system by harnessing the wealth of data it holds and turn it into meaningful insights.



Shannon Smith, CEO, PointGuard




Hello everybody, I'm Shannon Smith, I'm glad to be here. I'm the CEO of Abundant Power now known as PointGuard. At PointGuard we're committed to innovative and impactful technologies for building teams to help them realize higher building performance. But I'm not here to talk about me and hopefully here to talk about something that's important to you and not often discussed. And that's a question of whether or not buildings have a mission? How many of you have mission statements? I know we do at PointGuard. Missions are important. It helps you determine where you're going, what you're all about, and what's your purpose? I believe buildings do have a mission and if building is complete their mission, they will have an amazing impact on your businesses and on the people who come to work and to live in them every day.

So this conversation we're going to have today is going to be about what is a buildings mission? What are some of the things that are keeping buildings from completing their mission, and how certain older technologies maybe are failing on the job and what new technologies, new software like PointGuard can do to help buildings complete their mission. So let's get going.

Now one of the things has always found curious in the conversation about analytics and building and building software is that so much focus is on energy analytics. But we don't build buildings to save energy do we? We actually build buildings to provide an amazing workplace experience and to last as long as they can at the lowest possible operating and capital costs. Energy costs just come along for the ride. So if your building completes it’s mission and does those things, great workplace experience at lowest capital and operating costs. What happens? Profit for the owners and great enjoyment for the occupants and the tenants. So I want to talk a little bit now about what can be done or what stands in the way of buildings completing their mission. They're really six things that come to mind to me and I want to talk about it and maybe some you know. But here listing them out can tell you a little bit about why it's so hard for building to complete their mission. And then what and why software sometimes doesn't really do the job.

What is time? It’s a tyranny of the urgent today. We have so little time we had one building manager say I have one click in one minute. The next is talent. There's a major talent gap today saying a recent study by RIBEX says that there are more people over the age of 70 in facility management than under the age of 30. The third thing and this is really builds off of time and talent, is stability. We have less time and less people. You're moving teams around more and the knowledge is embedded in the building and how it performs is being lost. There's a lot of lack of stability today. Comfort is an important aspect of a building's mission. We found at PointGuard buildings are not within three degrees a set point, one out of every five days during occupied hours. It's the one thing you can’t control in your operating of a building and it's the one thing you don't. Knowledge everyone knows in the facilities space that knowledge is reactionary, it’s static is based on the things that the vendors are telling you to do and is still visual today so little data is being used deeply in buildings to help them complete their mission.

And the last the most important thing that keeps buildings from completing their mission is action. Nothing good happens in a building unless you know exactly where to go to turn a wrench and so much of energy analytic software and software is being used a day in facility management doesn't have any idea where to tell people to go to improve their buildings. So here's your analytics, is a long way away from helping millions complete their mission. Recent Energy Star score recalibration might even tell you that even more, the average office building lost 12 points of Energy Star score in August. Energy analytics is just a small part of the data opportunity deeper building analytics is the real picture that you have today. So what can be done? How do you begin to take technology and help a building complete its mission?

We believe at PointGuard to the answers right in front of you. What you already have invested in the building, you're building management system. There's a wealth of data there that is underutilized. It may be the most important asset you have in this journey. How does that work? You start with your energy bill data, that's a very small part of it. Then you take all your BMS data. The next most important thing is having some form of software solution that can help you process said data. But it has to do the most important thing of all and lead to meaningful action. If it does that the building can complete their mission. If you take a look at all the pieces of equipment that are available and you're BMS you can begin to look at it in terms of comfort and asset health and with the right kind of software tools you can take all those pieces of equipment and move them into the highest asset life in the highest possible comfort delivery.

So at PointGuard we think that the next platform has to meet a number of goals and that’s how we designed our facility management platform. It has to maximize time, has to be intuitive, straightforward, easy to use, it has to solve the talent gap. It has got to allow one person do a lot more work than before and also attract younger talent into the facility's space. And if you're outsourcing your facility services, they're facing the same challenge. Using a PointGuard software, one person can manage over 20 million square feet. That's over 20 times the current rubic used by facility management today. It needs to remain with your building. It has to amplify local knowledge all the people that have come through all the people that know that building, that information has to be captured and algorithms and machine learning, and it has to stay with that building for the next owner and the next management team. We have to eliminate comfort mistakes. You have to be able to deliver 100 percent comfort 100 percent of occupied hours. If you do that you eliminate over half of your comfort complaints. It's an amazing outcome and it's something that building management is not doing today at all.

Instead of focusing on energy we've got to move to something bigger and more important, something in the mainstream of what real estate is all about. It's about your assets. It's about operating expenses. You want to extend your asset life. You want to replace assets when you want to replace them, not when the vendors tell you to replace them. Operating data is single most important piece of information missing from building management. They were the only asset class it doesn't replace equipment based on operating information, replacing static nameplate maintenance information that's not accurate and billions of dollars are being wasted today. Lastly it's got to be precise. It’s got to stop wasting time, tell people where to go to turn a wrench to improve your buildings and help them fulfill their mission. And those are the six points that we designed our platform around to deliver that kind of value to the people that use it. So it's time to go beyond energy Analytics. In my opinion it's time to for buildings to help complete their mission to provide maximum occupant comfort. To have the lowest possible capital and operating costs and as a result, help you have maximum amount of profit and have the occupants have the most enjoyable workplace experience possible. We can do that and PointGuard.

Jamie Hodari: A Better Way to Workplace as a Service (WaaS)

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Jamie Hodari, CEO of workplace provider Industrious, describes the latest office strategy: Workplace as a Service (Waas).



Jamie Hodari, CEO & Co-Founder, Industrious

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My name is Jamie Hodari, I run a company called Industrious. We're the largest premium workplace provider in the country so we're in about 35 cities and launching three or four units a month. Within that context I wanted to talk a little bit about what our industry actually is and then to talk about risk in our business. So when we started our business, in those initial sort of pitch meetings, all anybody wanted to talk about is coworking the real deal and how long is it going to be around for or is it just a trend? And I think at this point that's really receded but people do want to know. Okay I believe it's here to stay.

I know that adoption is growing really quickly but how risky is it? And so I wanted to focus a little bit on that and then in particular what landlords can do to take advantage of the rapid rise in adoption of this product category and in a way that mitigates risk. So what is our business? Here's the truth about workplace as a service, it is in large sense an outsourcing business. So when we started the business the premise at the time was that the white space in the coworking industry was for a more professional, more elegant product and that was true and I think that remains true to this day.

About a year in we had a customer, a large Silicon Valley firm that was growing out of one of our spaces and they approached us and said, hey we actually really need your help. Would you be willing to build out our headquarters in Chicago for us, we think that you'll deliver a better product than if we did it ourselves.

And in that moment I think my Co-Founder and I had sort of a light bulb moment where he said this is an outsourcing industry. This is basically where a large sophisticated company is taking a major cost line non-core complex out of their business and handing it off to a third party. And the observation is that in a lot of outsourcing industries, they kind of exist as niches for decades. So if you think about manufacturing outsourcing that was around in the 70s and the 80s as 1% of the market, your factories are overloaded so you use an outsourced manufacturer in data storage. You've run out of server space, so you outsource some portion of your data storage. Until someday when you see this rapid rise in adoption, and in a lot of outsourcing industries it goes from 1% to 5% to 50% in data storage. 95% adoption, and the question is what causes that rise in adoption?

For us it's clear that in most outsourcing industries it's the moment when someone can walk in your door and say I can do this better than if you did it yourself. So I can manufacture the iPhone more efficiently, more effectively, with less errors than if Apple did it. I can store your data more effectively with less downtime, fewer service interruptions than when you hosted on your own servers and we've basically spent five years trying to cross that exact threshold to be able to walk into Johnson & Johnson's Head of Workplace's office or Pinterest or Twitter or Spotify or Bank of America and say we are going to deliver a better workplace experience to your employees. You're going to have happier, more engaged, more productive employees if you let us deliver your workplace experience for you rather than if you do it yourself.

I think about a year and a half ago Industrious and a few other providers were actually able to start crossing that threshold. And that's why when you look at our business and you say what's going on here? Why is this cropping up everywhere? Why are large enterprise customers starting to really crank up their adoption? It's because like a lot of outsourcing industries it's also addictive once you started doing it and you see that you get a better outcome. It's really hard to go back to doing it yourself. So that would be kind of my framework for where we are today.

I don't want to oversell it. I think for small businesses and teams of 20 and below that ship has sailed. You're going to be in some sort of outsource setting. For larger teams from big businesses, I think we're in the experimental phase. If you look at most big Fortune 500 hundreds they're doing one or two major experiments with putting a team of 200, 300, 400 people in an outsourced setting and they're testing, how happy are my employees? How many people quit in an 18 month period. They're taking stock and a lot of those companies are coming to the end of that experimental period and I think, look I'm biased here but I think most of them are coming to the conclusion that they actually did get a better outcome and they're now starting the wave of really pushing adoption, at least outside of their headquarters, moving a lot of their workforce portfolio to a third party setting. So the question I think at hand is what does that mean for landlords?

This is, I think, very clearly becoming the most important amenity in a building. Meaning, Ernst and Young comes with a 300,000 square foot lease in a building and they're trying to decide if they're going to be in you know Columbus Circle or the building three blocks south of here. And it matters if the gym is nice, and it matters if there's a roof deck, but really if you can say look, I have four floors of the building that are dedicated to highly serviced flexible space that you can grow your team into, that really is an amenity that moves the needle on how corporate occupiers are deciding where to go. We're in the building already having whisky tasting classes and lectures and a highly serviced sort of amenity base and we're able to deliver that to the entire tenant base of the building not just to the flexible workplace customers and you find that increasingly are saying I really want this in my building but this feels risky.

What I will say is the knock on our business, which is that it is a mismatch of long-term liabilities and short-term asset, and I think if you talk to any coworking skeptic that's the first thing they will point to is a very valid criticism of our business. I think people bend over backwards in our business to try to say it's not true and here's why it's not true and you don't have to worry about that. The reality is, it is true. I think as our business becomes an increasingly large part of the commercial real estate industry more broadly, that's a problem because you're amassing a lot of risk and we think there's a better way to do this. So this would be an exhaustive sort of you know revenue of a coworking operator over various ups and downs, various cycles and it probably looks a lot like other revenue management businesses which is to say you know if you look at lodging over the last eight recessions there tends to be a 15% swing in revenue. If you look at Regus, which is comparable to the different businesses in the last recession in North America where they have twelve hundred units they saw about an 11% reduction in revenue at the unit level. That's not that risky of a business within the framework of most industries. I think that's a relatively reasonable risk profile.

The problem is when you put a lease underneath that, it's basically like putting leverage on our business. It's like if you put debt on your house and you get all of the upside from appreciation and you're underwater immediately if you go below the loan amount. What it does is creates these wild swings in profitability for coworking providers where in good years they're printing money and in bad years they're in the red. And the problem for landlords is if you look at a WeWork, Industrious or any other coworking provider and this is brutally honest, they will put money into a unit for 3-7 months perhaps if it's losing money in a recession but they're not going to forever. It means the landlord is bearing a lot of the downside risk and participating in none of the upside risk.

We believe very strongly that it's time for our industry to start shifting over to the model of the hotel industry where coworking providers and workplace service providers partner with landlords. They program the whole building, they have coworking floors of essentially custom suites for teams of 20 to 400, and you do that in a profit sharing arrangement rather than on top of a fixed lease. This is something that doesn't sound that cutting edge but it's at the very forefront of the industry right now.

This Reuters article from I think four days ago is the first time I've seen a major publication talk about the fact that providers like us are starting to move to management contracts. It's happening very quickly. So for Industrious for example, a year ago 95% of our pipeline was arm's length leases and 5% were partnerships with landlords. It's now about 75% partnerships with landlords and I really think this is not just about Industrious. This is something that's going to turn our industry into a more sustainable, safer business. That large occupiers can really use with peace of mind that it's not going anywhere and that landlords can take advantage of without taking on undue risk.

This for example is a project we just announced with Blackstone in Los Angeles to manage an entire campus of buildings for them under a profit sharing arrangement where we're managing coworking or managing custom suites and also all of the building common amenities. So let's say your the landlord and you decide, this makes sense, I do think I want to partner up with a provider under a sort of management or partnership arrangement. And then you've got to really dig in on who you're going to partner with because more so than an arm's length lease scenario, you're really shoulder to shoulder with that operator.

I'll go very quickly through some of the ways in which a landlord should approach this question.

So first what is the quality of the provider to go back to the earlier point. The name of the game in this business is to walk in the door of Pandora's Head of Workplace and say, we can deliver as good or better of a workplace experience than when you do it yourself. That's a high bar to cross and it's very important when you're working with your workplace-as-a-service provider, to be working with a quality provider that can actually make that pitch. Here's some images of industrial cities across the country. Increasingly it's a relationship business where the coworking provider, whether it's WeWork or Industrious, is working directly with the occupier. So it's important to be working with one that already has a series of existing relationships with those occupiers to start to deploy more and more of their workplace portfolio across the country.

The next is what is the profile of the actual people to walk into work everyday? Some buildings want a very young engineering-heavy sort of workplace, some want more mature, broad national businesses and there's no wrong answer to it but it's worth thinking for your building about matching the type of workplace provider you're bringing in, with the general brand tone of the building.

The next is, and I do think this is quite important, you need a national provider. So this is true for a Johnson & Johnson, they're looking for one or two providers to do 7, 8 markets with and it becomes increasingly hard for single point local providers to compete. So that's part of why you're seeing a lot of consolidation in the business.

Andrew Farah: People Are Weird

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Andrew Farah is the Founder & CEO of Density, a sensor technology company who measures the, at times, unusual behavior of people and how they interact with the space around them.



Andrew Farah, CEO, Density

Website | Twitter | Linkedin



My name is Andrew Farah Co-Founder and CEO of a company called Density. My talk is called People are weird. So I'm going to explain a little bit more about what we're going to go through today.

So first off, the population has grown into a fixed amount of space, like we're not creating more earth. So the way that we solve that problem is obviously by building in three dimensions. This is kind of a staggering number. Now this is 10 billion humans by 2040. But this curve actually shows what would happen in the event of some serious catastrophe. So we're going to skip that and sort of look at the general trend is up and to the right.

It turns out that you all are very weird. You walk in different directions. You bring stuff with you. Sometimes you even will hide in your natural environment, so these are like beneath hinges. Often times there are packs of people and you tend to bring plates with you which is very difficult for us to count. This happens usually very late at night about 2:00 o'clock in the morning. People come by and pick up all the stuff that we've left behind. And then sometimes you bring your dogs, and that's also very challenging because that's an organic object inside of a space where we should be counting the human. OK. So how we know all of this is that we built a people counter.

Density is essentially a space analytics company, we measure how people use space inside of large corporate buildings that we work with predominantly the Fortune 1000 and we build this device. And so it gets mounted above an entryway, it is powered with PoE (power over ethernet) connected to the Internet and we essentially anonymously count entrances and exits as people go through space.

Kind of looks like this and can support any double or single entryway. There's a lot of complexity inside the device. It looks super simple. I'm not going to go into the engineering behind it, more years of my life have been poured into this than I care to admit, but all this happens locally so none of this is streamed to our system. Instead it's just happening on the device and we process plus one minus one and all the errant behavior that humans exhibit inside space.

We built this because we just wanted to know how busy our favorite coffee shop was when we first started about four years ago. It turns out it's a much more interesting problem when you deploy this into really large corporate space just because the size of the the square footage is colossal. This is observed behavior about 40 to 60 percent of all entrances to secure doors include tailgating. If you're familiar with tailgating it’s just essentially two people going into a secure door and it's typically because someone's being polite and there's holding the door for another employee. But that's a problem, it's a very serious problem. In fact it's so much of a problem that they've created these ridiculous products called people leaders. Does anyone know what a people eater is? It is not this.

This is definitely not it although as much as I would love a giant purple person to come running after the person who tailgates. It is also not this although we're getting closer. It is not a door. It's actually this. This is the people here and this sort of ensures that only one person goes through an entryway at a time. Do we know what a man trap is? OK. This is not a man trap. This is a bear trap. This is also not a man trap. This is a mouse trap. This is a man trap and these are both very unfortunate names for products.

But this is how we solve tailgating today. You'll see these at airports where people will go through and it can ensure that only one person goes through. So this video actually came from one of our partners who solved tailgating in a slightly different way. They deployed our product on the inside of the store and as the person goes through there using our API in real time, like 400 second latencies spare a milliseconds, very very quickly count the number of people who go through and then compare it with the badge data. And if there's a discrepancy, they take a photograph. We don't build the camera but they set up a process that takes a photograph. I was really hoping there might be like a trapdoor or some other type of interesting thing like a net.

So we periodically will do space studies so it will take data and help answer what to deploy into different rooms and then we'll analyze the data and we'll provide a customer with what's happening inside their space. We answer questions like are people using these conference rooms? Is the conference room or space sized properly? And what are the most used rooms or least used rooms? So we are going through this data but we were going through this with one of our customers and we sort of pointed out that one of the rooms that they had was essentially used by two people but it was designed for 12 and it is a really large space and they decided that they were going to break it up into essentially a space that was more like a lounge.

And we sort of went through each of these rooms and we landed on one of the last ones. We said this one is actually optimally used. It's designed for four people it's consistently used by three or four people and it's the most popular room.

Now we have no idea why but it just is. And they said oh my god it's the television. And we said what does that mean. And they said well it's the only room that we put a television in. So everyone goes to that room because there is a television there. Now I'm not suggesting that you should put televisions everywhere, I'm simply suggesting that once you understand how people use space you can draw some very interesting conclusions about what to do next.

10.9 billion square feet. That's cumulative leased or owned corporate office space in the U.S.. It is an enormous amount of square feet. So periodically we'll go to the SEC and we'll scrape the 10k filings and just to pull interesting data. And one of the things that we found was that these companies own just incredible amount of space and they are constantly recalibrating, they're either constantly acquiring or they're consolidating. This is just a snapshot of the numbers.

You'd think with this problem of human population rapidly growing and our willingness to sort of solve the problem in three dimensions that we'd be constantly trying to catch up with the population but that's actually not true. So 41 percent of all leased or owned corporate office space in the U.S. is empty but paid for it. It's just not used. I mean it's not used. It's just empty. And the problem isn't that people don't know they have a problem, they know they have the problem. They just can't agree on which 41 percent. And so that's one of the reasons we get it we get a call periodically. The cost is roughly 150 billion dollars in the U.S. spent on space that's not used. And what's really cool actually about this is that the percentages are pretty consistent internationally. So 41 percent 39 percent 40 percent is pretty consistent although China is more like 28 percent although I’m not exactly sure how they did that. Japan is like is like 49 percent or something. It's really amazing.

Does anyone know what COPPA is? It is a federal legislation that came about in 1988 and it has to do with Child Online Privacy Protection and even updating this periodically, they updated it in 2013, they updated it in 2017, so as the technology has changed they've made changes to the rules. So you may not be familiar with COPPA but you may be familiar with how YouTube requires you to be a certain age or certain systems require you to be a certain age. This is why. And I bring this up for a particular reason. COPPA has never encountered smart cameras before. When you encounter smart when you sort of mash up smart cameras and the requirement to have parental consent on any data that you're collecting about someone who's below 13, then you run into some pretty interesting issues. As you think about sort of your space, public spaces are perfectly OK with cameras but you should sort of be mindful as you're deploying cameras inside of spaces. I don't believe that most of you are are employing 12 year olds but just something to bear in mind.

So we did a deployment inside of a large corporate in a financial institution and it was the head of global I.T. who was our was our primary point of contact and he had a bunch of engineers that were milling about and this is a couple of years ago and we had deployed one of our devices which is about four times the size of the device that I had here is a prototype that we're collecting data trying to understand how the space is being used and also just trying to improve accuracy. And ahead of I.T. looks at the the engineer and says “Hey that thing you're looking at it's a camera and it's spying on you.” And he was he was joking. And this is what the engineer did.

The thing that was very interesting about this, is that this is culture.

This is not rules. This is not policy. This is not your employment contract. This is what people feel and what's really funny it was so he turns around because we were laughing we're about ten feet behind we were on our laptops and we were like “Oh hey we heard laughing over want to show you what you look like on the device.” He came over and we showed him the algorithm we showed him the the depth data this is all depth data. And and he started laughing like man that's so cool like you have no idea who I am. I can literally stare up at it and have no idea. So anyway I just sort of another point is you really can't put cameras in conference rooms you really have to be able to protect privacy especially inside of secure facilities and so building something anonymous was very important to us and it's very important to the Fortune 1000 that we work with.

One last story and then I’ll wrap up. So we're in all U.S. cafeterias, culinary has sort of been a an interesting space that we work with heads of global real estate who we're trying to consolidate. We work with facilities managers who are trying to automate cleaning rooms. So it turns out that we clean rooms that are clean as opposed to clean rooms that have been used. So we help automate some of that. We also work with heads of workplace strategy who are trying to understand how to optimize space or better improve the space design or the furniture that goes into that. And we also work with culinary which was surprising to us. So we get deployed into this very large floor, there were five entrances to one cafeteria and we we started counting over a period of time the number of people that go through each of the points of entry and we can we reconciled count for that one space. And when we looked at the data we showed up to a meeting and we we presented the client with data. They had 91,000 entrances and exits through one door. One of these five doors over 120 day period. The next door over had 131,000 entrances and exits over the same 120 day period and then two, not one, but two doors to the elevators had 515,000 entrances and exits over the same 120 day period. They employ 5,000 people like it's one floor. It's five doors.

And we told them this and they said you’re lying. And we said we're not lying. It's 96.68 percent accurate or whatever it was at the time.

And we start going back and forth. They immediately deployed US sort of nationally which was cool but but the thing that I thought was really neat was one guy spoke up and said oh my god I think that's why our hinges are failing the doors just kept getting opened and closed and opened and closed.

So the point is your space is big, people are weird and it's totally normal to not know what's happening inside that space. And I think if there's sort of anything that I would leave everyone here with it's just simply that as you're thinking about space like why build any space without knowing how it's used thank you very much.

Angie Lee: What Working Outside Teaches Us About Working Inside

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Angie Lee, Head of Brand and Marketing for Industrious presents their outdoor co-working project with L.L. Bean and how owners and developers of office space need to embrace new lessons on creating an amazing day at work. 



Angie Lee, Head of Brand & Marketing, Industrious




Hi my name is Angie Lee and I'm the Head of Branding and Marketing for Industrious but I'm here to talk to you a little bit about a collaboration we did with L.L. Bean. It was an exciting opportunity for us to really understand what working outside teaches us about working inside.

We are committed to delivering an amazing day at work where thousands of members across our 50 locations across the country and over the past five years. Since we were founded we've helped over 2000 companies actually really grow and scale their businesses. And what makes it really interesting what really helped us stand apart is the fact that we can look across all of these 2000 companies to really distill what delivers on an amazing day at work and really the secret sauce boils down to two things that our ability to marry gorgeous high quality spaces that are designed really to drive productivity not just by creating beautiful spaces but about spaces that drive productivity and the other is to marry that where the workplace experience it really makes people proud and excited to come to work.

So we're talking about scale in terms of office space but then individualising the workplace experience and we're incredibly proud of what we've done. We have amazing space. This is actually our space in Chicago Fulton Market and of course we have our Center City location out in L.A. And what we've done is an amazing job of flooding all of our spaces with so much light and really filling it with green to really bring the outside in because we've all read the same research that having a lot of sunlight, having a lot of greenery can actually increase productivity in the workplace. But really at the end of the day what all of our 50 locations share is the fact that they're inside office buildings. So as much as we want to bring all of this outside in, we're still inside. And so when L.L. Bean came to us and said you know, what would it look like if we were to redefine what an office looks like when you actually have no walls? We really jumped at this opportunity ask ourselves if we're really challenging ourselves to deliver an amazing day at work. What can we learn from working outside that can actually influence the way we design spaces inside? So thus was the L.L. Bean be an outsider campaign.

So this past summer what we did is we built these amazing outdoor pods these pods were designed using some basic principles around the cost of the building itself but then what we did was peppered in the principles that really drive productivity and effectiveness in an Industrious space. And then we took this pod on the road. So first we started out in New York City Madison Square Park typical tenant doing a typical conference call except he's doing and stationary bike. Right. And you see a bunch of people on the corner of here who are kind of sitting around milling around outside. We went to Boston, we went to Philadelphia, and we went to Madison Wisconsin.

So in the course of taking this thing on the road four locations, three to four days in each location we spoke to over 15 hundred people who showed up to really take advantage of this opportunity to work outside. We learned some really interesting things that really reinforce some of the principles we knew already deliver an amazing day at work but also then helped us translate what working outside could tell us about creating productive workplaces inside.

So because these talks always end up with three takeaways I’m going to walk you through three of those ideas. So first and foremost working outdoors really drives productivity indoors. Now to some of you guys this may be a little bit counterintuitive because when you think about going outside when you're at work you think of it as a break from productivity. I'm going to take a walk to clear my head. I'm going to get away from my desk, you take a walk when you go out for lunch. Those are the moments in which we're thinking about that as being a break. But let's take a step back and ask ourselves what defines a modern workplace today? What's fundamentally changed the modern workplace from say a factory in the eighteen hundreds. Is the idea that we don't believe that individuals are cogs in a machine but that our role is to really design workplaces that bring out the best in individuals and bringing out the best in individuals means you have to offer different productivity based types throughout the day.

So think about your day, you start the morning you're a little tired you're getting kind of settled in, you might go into BuzzFeed you're sitting at your desk right. You go to get coffee to kind of stand up walk around and you go to the kitchen and all of a sudden you're interacting with your colleagues. You then have to go to a conference room and so on and so what you see is these spaces can actually either contribute to your productivity or they can actually in some cases zap your productivity. So if you take an average person's energy levels throughout the day you might see some patterns so here's an anonymized individual over a five day period and what you see is every morning they would sit down on their desk and you would see that they're not really a morning person. They start out on their energy levels starts to climb and then eventually they go through lunch and then they end up going to a conference room in the conference room either zap's their energy because meetings zap and diverts energy or because it's just later in the day your sugar levels are dropping or increasing. You are getting sleepy and then you go back to your desk. And so the idea is that if you actually design a space for humans you're designing them not to force humans into the spaces that they're in but to give as many opportunities for individuals to kind of work in those spaces.

Now what happens if we start to treat the outdoors not as a novelty as this crazy idea that we're encouraging people to work outside but we simply treat it as another productivity space time. All of a sudden you're like oh I'm going to have my conference meeting I'm going to do this I'm going to have a meeting outside. You go to S.F. people in S.F. are notorious for their walking meetings and that's kind of the same thing, if you're already having a one-on-one with someone, why not go outside get a little bit that the energy in and get the endorphins running. But if you start to think of it as simply another productivity space type and not as a novelty, then you start to think of it as well, what could the impact be? So you take that same person and you stick them inside for a little bit and all of a sudden you start to see spikes in energy that actually exist once they return back indoors.

Now all of you guys know this you take a walk at lunch and you come back feeling refreshed. How amazing does it feel? It feels like it can give you the energy to get through the rest of the day. But that brings it to the second principle is that simply being outdoors is not enough. Delivering an amazing day at work, what we have found across all of our members is that you really give folks the energy or the environment to feel truly productive. So even just take a moment to think about what makes an amazing good day for you, it might be that you felt proud about the accomplishments that you achieved or that you felt incredibly productive and you got a lot of things done. If you're a checklist person, you are checking things off.

Let's have some honest talk.

Landlords a while back. You guys come onto the idea that being outdoors is a really great idea. And so you build these things right. And this all of a sudden was your outdoor space. Hard surfaces, completely rigid. I mean you spend two minutes eating a bad pizza out there and you're ready to go back inside. So landlords are putting these up outside these pavilions and then they said well no one uses them. It's not a good use of my time or energy. So therefore this willy nilly stuff about creating outdoor workspaces is just a fad. But what we found working with L.L. Bean and creating this space is that in the same things that you need indoors you need outdoors and you begin to make those outside spaces as productive. So if you look at the way that we've designed these spaces you have a mix of task seating and you have soft seating.

So are you being heads down and working on that memo. Oh you're boss or are you having a conversation to further further the relationship you have with a colleague. Are you. Do you have a convening space where you and your team can stand around Jim white board where you can actually collaborate and kind of be on the same page and putting things up on a screen. Is there fast reliable Wi-Fi. I mean anyone who's been stuck in an airport with no Wi-Fi knows that without Wi-Fi in this modern age it's a little hard to be productive and most specifically is just screen friendly shade. I mean if you think about using a laptop outside the one thing that gets in the way is glare and if you have an old school I mean this compared to this is obviously a completely different experience.

And so what this tells us is that yes people want to be outside but in order to be outside you actually need to have a space that's designed for productivity outside. This brings us to our third principle which reinforces what many of us already know is that outdoor amenities can create an outsize workplace experience. Now in the course of going on the road with L.L. Bean we had 1500 people show up and the response was overwhelming. Teams show up to hold their weekly check ins outside. We had people coming up to us saying you know I feel so refresh I can go back and you know kind of really work.

But what was really interesting is a lot of the team members the individual that came to us had smaller offices they came from smaller companies and they were so excited to be have a novel experience but to be able to leave their smaller offices or come outside. And so when you zoom out a bit and you take our installation in Philadelphia which is in the middle of the park what you see all around it are big office buildings right. And so imagine if you were a landlord and you have large office buildings around it it's just a very small leap forward to think of it as a campus right. It's really the difference when you want to brag about having a campus is about activating the outdoor spaces and the common areas.

And what we're seeing more and more is more landlords are recognizing that by partnering by using your outerspace as an act of being a common areas you can actually optimize the tenant experience but also increase revenue. Right here you have a rendering of the partnership that we set industrious is working with Blackstone Q in order to reposition the Howard Hughes campus out in L.A. And essentially what that is is it is a reinvention of what the modern campus looks like.

And what we're doing is we're building up entire outdoor spaces you see over here as we're moving some of the walls completely and putting glass doors or bringing the outside in. We're creating all these areas. Everything is going to be a Wi-Fi optimize everything has to be designed for a truly mobile workplace. Now L.A. is the perfect place for this where you have I mean sunshine all the time. And so when we designed is really a campus that can reflect that coastal lifestyle. But then also just use all of the available real estate to create a truly modern workplace campus.

So what does that look like so you notice here you have convening spaces here like we talked about you have taxiing back here with tables and chairs you have open places where people can walk and talk. There is a lot of variety of spaces so they even within the outdoor space were bringing those same principles into creating a modern workplace experience.

So if we look at the outdoor areas you can also see that the the opportunities are to activate the indoor areas as well. But again removing some of the doors and designing experiences that bring the outside in means that we get the best of both worlds you have climate control here 5 all those details that enable folks to be productive throughout and so on reflection if we look at what we learned going through what many people look at perhaps as a novel stunt that we did with L.L. Bean what you really can take away is that there are many principles that really define how working outdoors can help define what happens indoors and if you go back to the ultimate question of what delivers on an amazing day at work.

Well we would argue, that an office with no walls is actually looks like just an amazing day at work.

Laura Patel: Building for the 21st Century

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We’ve been building in the same ways since 1916, and they’re all expensive. Laura Patel, Global Head of Partnerships for DIRTT takes us through the evolution of construction methodologies and how technology is able to solve for time and cost efficiency.  



Laura Patel, Director of Global Partnerships, DIRTT

Website | Twitter | Linkedin



My name is Laura Patel and I am one of your local DIRTTbags. I work for DIRTT environmental solutions and this morning we're going to talk to you about construction for the 21st century and why we need digital construction.

I gave a talk last week at the University of Buffalo, they asked me to come up and do a TED talk for some of the real estate community and their students. And in preparing for that TED talk, some of my research brought me to this postcard which is a postcard from 1890. So let that sink in. This is 126 years ago and in this postcard you can see that they predicted that by the year 2000, this is in 1890, we would have architects sitting in a fun little box somewhere far far away pushing buttons and through a series of mechanical levers and pulleys and robots, we would be building onsite, using no human beings. And at first I thought this is crazy. This is mind blowing to me that this is what they thought we would be doing in 126 years. And yet as I started to study this more, I realized that they actually got it half right. Because by the year 2000 we had started to make huge advances on the design side.

We went from hundreds and hundreds of years of paper drawings to CAD in the 1970s through the 1990s and this introduced some process and some standardization to the design industry, whereas two drawing sets may have been dramatically different for the last couple of hundred years before that. Then in the 90s we started to introduce different BIM technologies and this allowed for on the fly problem solving by smaller groups of teams, whereas making a building like this would have required dozens of people in the past to try and collaborate and figure out how to actually get this built. Then more recently, moving into the early 2000s up until today, we've obviously seen this onsurge of different design technologies that now allow us to actually visualize the space before it's even built. Yet, this is our graph for technological adoption in design.

So a pretty steep curve and only getting steeper. If we contrast that with construction though it looks like this. This is a study by McKinsey and Company and you can see green is high adoption of technology red is low adoption of technology and for this study of McKinsey and Company polled 23 different industry sectors and if you scroll all the way to the bottom just above agriculture and hunting you'll find construction. So construction innovates only more than agriculture and hunting in terms of our adoption of technology in the process. And this is going back again about twenty five years of this study.

I started to think about that and it's true if you look at any other industry, the automotive industry, electronics be that TVs, phones or even healthcare, we like to criticize healthcare but even healthcare has been disrupted multiple times over the last hundred years. Yet if you compare that with construction, we've actually been building the exact same way since about 1916. That was the last great innovation that's when drywall was invented everyone, 1916. Although design has come really far, we've gone from this to this. We're still building the same way which is resulting in what I like to call the Museum of fun things that happen in construction.

The reality is they are all expensive and some of the research that I came across suggests that in the United States and Great Britain for every dollar we spend on construction about 34 cents of that dollar goes towards repairing mistakes that happen on site or towards different costs that arise from schedule overruns related to again, mistakes, miscommunications or challenges throughout the process. And that might not seem like a big number but when you start to factor that into the overall construction that happens annually it actually works out to about 140 billion dollars in wasted money because we are again, not using construction in this process. So how can we use 21st century construction technologies to help bring us into this century and build better? Meet DIRTT.

Now I'm going to talk about how we're taking all of that sophisticated design intelligence and we're actually bringing that one step further into the construction process. So we do that using a really sophisticated pre-construction design technology and it's doing four really important things for us. The first is that it's actually connecting all of the different platforms in one software. So rather than having your architect who's then trying to communicate via paper to the subcontractors how to build the space, this is actually automating between a 3-D view and a 2D view, all of our elevations plan details everything is being sort of streamlined into this one platform. The second thing it's doing is it's engineering the entire building and all of the assemblies that we are producing, it's engineering them custom to a thousandth of an inch. So we never build the same things twice. Just like your general contractor never does. Everything is custom to a thousandth of an inch. And the way we do that is the software is actually behind the scenes doing all that heavy lifting for us. The third thing it's doing so we're engineering it we know it's buildable we're seeing it visually which really helps with the decision making process and we are also streamlining again the backend deliverables out to the design community. But the third thing it's doing is it's pricing everything in real time to the set. So I never have to call my client and say really sorry, but actually it's going to cost us another four thousand dollars or fifty thousand dollars. I know immediately what that cost is and this isn't a high level budget, this is my actual cost to the client.

And the last thing it's doing which is the coolest part is as soon as my client says I love the way it looks, that meets my budget and you haven't told me that I can't build it. It's actually written all of the A.I. required for us to go to work within minutes and start to build every part and piece offsite using robotics and manufacturing. So taking all of that design intelligence and now actually having it produce all of your building materials. So how does it look once we get on site? Well it starts to make the construction industry a lot more akin to what we do in the automotive industry. We're not bringing raw materials to site and then having Joe and his friends hopefully construct the space in a way that reflects the drawings, we're actually producing it all in a factory. And it's coming to site and clicking together kind of like Legos. So everything from the Electrical to the data whether that's Cat 6 or fiber through to all of the wall assemblies which are going to be stood on site and zip together, nothing's being cut or finished or sanded. Those come equipped with whatever they need to from a technology standpoint, with plumbing, with data, with electrical. We're going to level the frames because buildings are never quite straight and then make all of those above ceiling connections that we first installed, install any integrated technology that needs to go within the cavity of those walls and then snap the tiles on and we're done.

So I'm going to walk you through three case studies just to try and land this and show you some examples of the work that we're doing in the U.S. specifically we're a 400 million dollar firm and we operate in 11 countries, the U.S. is our biggest market. Saudi Arabia is actually our second biggest market with Canada coming in third. I'm going to focus on three projects in the U.S. So this is Microsoft's offices in Detroit Michigan. We finished this six months ago a couple of quick highlights and photos from the project you can kind of see the scope of work here so a pretty densely constructed space everything highlighted in blue is DIRTT, along with all of the casework and millwork in the pantry areas and highlights of the scope of construction. So this was about a 40000 square foot space. Our multiyear trade umbrella was forty five dollars a square foot and we had a nine week construction timeline for our scope of work. What was in our scope of work was all of the wall assemblies that you saw highlighted which was all of the interior wall assemblies we didn't do any of the core of the perimeter, all of the wall engineering so that's the acoustical treatment, the blocking any of the utility that was running through the walls. All of the finishes and then integrated technology. We also did all of the pantries and conference room millwork, all of the arm wires and then we took over 40% of the electrical package on this project.

Second project JDA Software in Phoenix. Again some quick project highlights quite a bit more open plan in this project but a ton of technology, they had about 25 integrated monitors throughout the space. They are a software companies so they really wanted this to be a reflection of the fact that they are a tech firm. And some highlights here, 15,000 square feet this was $67 a square foot for our scope of construction and a five week construction schedule for us. Very similar scope of work except that we also did passive optical networks on this job.

So we were providing all of their network infrastructure including the backbone to the building. And then the last project which I can't say the name of but is a confidential financial services firm here in New York City that we're working on some project highlights on that.

This is just in construction so I'm just including some renderings and this is a typical floor plan. We're working with four different architecture firms and for GC's because we are building one point two million square feet in six months so there weren't enough people at each of these firms they couldn't award it to one firm. But they did award it to us as a turnkey prefab method. In order for them to meet their schedule our cost is about $37 a square foot depending on the floor plate. Each building is different. And we have a five week per floor construction schedule, largely very similar scope of work as the other buildings but we're only providing partial electrical assemblies because of the code limitations in New York and we're not doing any data here. So to summarize this is probably a lot of what you guys are currently going through with your existing construction process. You have a lot of uncertainty, you never know exactly what you're gonna get, exactly how much it's going to cost or exactly how long it's going to take and hopefully I've given you some food for thought on how you could be using digital construction and 21st century construction methods to be able to provide cost certainty schedule certainty and ultimately future proof your space. Thank you.

Cindy McLaughlin: Navigating Regulatory Technology To Build The Future

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Cindy McLaughlin, CEO of Envelope discusses the challenges of navigating the current regulatory climate and how technology will level the acquisitions playing field, allowing mom and pop developers to acquire buildings better, faster, and with more information.



Cindy McLaughlin, CEO, Envelope

Website | Linkedin



My name is Cindy McLaughlin and I'm the CEO of Envelope. Somebody pretty smart on Twitter once said that technology is really good at taking what was once available only to the mega rich and bringing it down to the rest of us. So you have a vacation home in every city through Airbnb, you've got a personal driver through Uber, and you're in your bedroom is an in-home movie theater through Netflix. I'm here today to talk a little bit about how regulatory technology can do the same thing for real estate acquisitions. I'm also hoping to convince you that I will admit that regulatory technology is not the most exciting topic, but it's not as boring as you might think.

Before I start talking about regulation in real estate I want to start by pointing out that the vast majority of regulation is made by really thoughtful policy makers who have anti-corruption and safety in mind as well as managing growth and economic development. But as they say the road to hell is paved with good intentions. And regulation has a nasty habit of piling up. It happens because each new political administration has its own priorities that need to be encoded. It happens because you find loopholes that need to be closed and it happens because unintended consequences of prior regulation need new rules to dial them back.

To get very concrete about the problem in New York City, the index for amendments alone and to the construction code are 400 pages single spaced. The building code is 35 chapters with 19 appendices. The zoning code is 4,000 of legal text. It fits inside one of those big boxes of printer paper. As you can imagine an enormous cottage industry of lawyers, lobbyists, consultants, advisers, have sprung up to help real estate industry professionals access, understand, navigate, sometimes evade and often times lobby to change the rules.

I'm going to talk a little bit about zoning because it's the regulation that I know best. Practically speaking if you're a real estate developer in New York City and you want to know what's possible to build on a particular address you're probably going to call an architect or a zoning attorney. If they have time, they're probably going to print out the relevant portions of the zoning resolution with a highlighter pen. They're going to understand the rules and if they're fancy they're going to build a three dimensional model either hand drawn or they're going to build it in desktop software. They'll email it over to you, you'll take a look and you'll say, well what if I were to add a community facility to the ground floor of my building? Or what if I were to change the floor to floor height? What would happen. How much square footage could I get out of that building? And you're going to kick off a game of email ping pong that can take days or weeks and can rack up fees between twenty five hundred dollars up to twenty five thousand dollars depending on the complexity of the development. Assuming that you're going to look at more than one property before you make an offer on a single one, you need to have a cool 25 to 50 thousand dollars sitting around just to explore your options. To put this kind of capital in context. The median income of New York City households is fifty thousand dollars. So if you're an individual if you're a mom and pop development company you simply don't have the means to do smart real estate acquisition because you need to be able to do the level of analysis that I just addressed. But the big guys are very willing to pay.

Like most good government tools zoning sounds boring, but it is in fact a secret means by which cities are shaped and fortunes are made. Zoning essentially serves as a paywall. Only those who can afford to navigate it can make their fortune in the industry it regulates.

So circling back to the point of this talk, can regulatory technology help with this problem? I'm going to talk a little bit about my company envelope. There are companies like mine that are handling different portions of the regulation. We happen to be building the three building the 4,000 page zoning resolution into three dimensional software.

To walk you through what the software is doing, we let you enter an address and very quickly we show you what's built there today and we show you what the three dimensional spatial constraints of zoning allow you to do. So where there are height limits, where there are setbacks, where there are yard requirements and we do that across all of the cellblock conditions of that particular parcel. We then make a recommendation as to the use type that's going to allow you to maximize your floor area. This is a commercial building. But you could play. You could say what if I were to do a residential building with a commercial ground floor. Or have three floors of commercial. Or what if I were to change my floor to floor height, how much extra extra square footage could I get out of my building. Or what if I were to take that inclusionary housing bonus that happens to be available on that parcel. Or add air rights from my neighbor or my other neighbor. And what if I were to caterpiller my way around the block until I can fill out the zoning envelope. What would happen if I were to add dormers to get a little bit of extra square footage. And anything I can do on a single lot. I want to be able to do across multiple adjacent lots as an assemblage.

In essence we're building sim city for real life, trying to take the wild complexity of zoning and build it into something that's accessible, useful and even kind of beautiful. Companies like mine have started out working with industry because frankly, they're the ones who can pay us in a way that we can invest back in our technology but eventually we hope to be able to provide our software so cheap or free so that anybody who has a parcel of land can understand how to maximize the value or the productivity of that parcel. They might find air rights that they didn't know they had that they could sell to their neighbor and it would allow them to speculate themselves on other lots for investment properties.

Regulatory software is pretty siloed. We do zoning, it's our area of expertise. Somebody else does building codes, somebody else does mechanical code, but in the not too distant future, we're all going to be holding hands. And well we're showing you what you could build in terms of square footage. We'll be partnering with companies that are already building in three dimensions, the building code that shows you the egresses and and mechanical code, and plumbing code software. And eventually will form in three dimensions a regulatory scaffolding that will allow you as a potential acquirer to say, very quickly, what are the bones of my development going to look like, what is this going to take and is it worth it for me to acquire this parcel. In this way we think that regulatory software is going to level the playing field in acquisitions allowing mom and pops to be able to do the same kind of exploration as the big guys. We're going to try to make this industry a little bit more fair and a little bit less rigged in favor of the very wealthy. Thank you very much.