The concept of “smart cities” aims to integrate technology within our current and future communities. The idea is to improve quality of life for a community using urban informatics, which monitor and shape the infrastructure of a city. This affects highways, homes, local businesses and much more, meaning smart cities will also have a huge impact on commercial real estate in the coming years.
All commercial real estate brokers should know the basic facts of this trend so they can share their knowledge with prospects and clients.
The beginning of smart city initiatives
The Obama administration announced a $160 million ‘smart cities’ initiative last September that will foster collaboration between technology and 25 communities. The federal research initiative aims to help local communities tackle some of their biggest challenges through the use of technology, including crime, traffic congestion, economic growth and the delivery of city services.
The private sector is also gearing up to support this massive trend. The first-ever smart city project is currently underway in Washington, D.C.: a $500 million-plus development called Gramercy District. It will contain luxury apartments, retail space and rooftop amenities, along with a high-tech business center to create an “intelligent living” platform that can be replicated the world over.
What brokers should know about smart cities
Though this trend is relatively fresh, many experts agree the marriage between technology and real estate will only grow stronger with time. With that in mind, here are a few key fundamentals about smart cities to keep in mind as new projects hit the market.
Sustainability: Eco-friendly, design-build features are particularly important as our population grows, turning this one-time selling point into a must-have in the future. Everything from lighting to water fixtures, appliances and landscaping will contain some element of sustainable design.
Security: Surveillance cameras, motion sensors, fob-enabled access to buildings, and sophisticated information technology systems that can back up and protect data are becoming an important priority for tenants (and therefore landlords). This need extends to retail, offices, medical space, industrial and multifamily properties.
Convenience: Smart cities aren’t just about technology. They’re about efficiency in all forms, including travel. A significant component of smart cities will have little to do with technology at all, but will instead focus on public spaces such as pedestrian- and bike-friendly pathways and outdoor plazas that bisect massive properties, providing shortcuts and sitting spaces for patrons. This aspect of smart cities also supports sustainability efforts, as more pedestrians and bikers mean fewer cars on the road and less strain on a city’s transportation network.
Convenience extends to the live, work, play lifestyle as well. Thanks to smartphones and tablets, we can now control key features in our homes, offices and even retail stores from the apps found on these devices. Though this convenience tends to require accessories like thermostats and lighting fixtures that are compatible with these apps, the concepts of smart homes, smart offices and smart stores have all converged into what we now call smart cities.
Those who work with innovative clients who like to be in-the-know should spend some time studying this new phenomenon. It won’t be long before it catches fire in DC, San Francisco and elsewhere. You’ll have clients asking about it soon enough, so make sure you’re prepared.