The following blog post is shared by our friend Scott Martin, SIOR, the CEO and President of inteliGlas.
The 1980’s saw an explosion of new office buildings. They were often built at the best addresses in the suburbs and surrounded by amenities. Some were designed by famous architects.
The boom happened across the US, including Texas, Massachusetts, Georgia, Florida, Illinois, Arizona, and District of Columbia. In Southern California there are 1,265 office buildings with more than 75,000 SF, and 59% of them (749) were built between 1979 and 1990 (source: CoStar). Nationwide, inteliGlas estimates that 40% of office buildings over 75,000 SF (144,000 out of 360,000) were built in the 1980’s.
Lifecycles of Buildings from the 1980’s
We find that office buildings from the 1980’s are experiencing four life cycle patterns:
- Continuously running as an office building with a patchwork of upgrades and repairs.
- Operating as an office, but fully rehabbed with upgraded mechanical systems.
- Repurposed for another use, such as a hotel, mixed-use or residential property.
- Torn down for a new development.
Contemporary Challenges for the 1980’s Office Buildings
The owners of office buildings from the 1980’s face a number of challenges:
Low Occupancy Rates: Covid, Hybrid Work,
COVID-19 accelerated the adoption of business and communications technologies that have made remote
and hybrid work environments the new normal. And record low physical occupancies are the result.
Regulatory And Environmental Challenges
Building owners are also facing new environmental standards and state/federal legislation with mandates for
energy efficiency and carbon reduction. Now, missing an efficiency target or report can cost you thousands of
dollars per month. In addition, building owners and employers are facing growing expectations about the
health and sustainability of their properties, as measured by ESG, EnergyStar, and WELL standards.
A Patchwork of Systems
In our experience, 90% of office buildings from the 1980’s have a debilitating ‘patchwork’ of upgrades and
repairs. This patchwork has a variety of causes:
- Buildings are often on their third or fourth owner, and each generation of upgrades/repairs reflects
- the goals and biases of a particular owner.
- Building systems (lighting, elevators, access controls) have become more sophisticated over time. For
- example, the first digital controls for mechanical systems were built in 1996.
- Upgrades to physical systems are typically done when tenants leave a space, so different floors and
- suites may have systems with vastly different ages and capabilities.
- Tenant improvements have changed the physical spaces and the mechanical systems over time.
- The adoption of Master Building Systems Integration has been slow, which results in ‘silos’ of
- systems that do not communicate or work together effectively.
Together, these challenges have created an expensive spectrum of obsolescence in older buildings with record vacancy rates.
Solutions for Office Buildings from the 1980’s
The patchwork in buildings from the 1980s is an opportunity, not an obstacle. Three innovations are enabling dramatic improvements in the performance of older office buildings:
- Open Building Management Systems
- Master Systems Integrators
Progressive building owners are using retro-commissioning to keep their competitive edge. With this approach, owners upgrade their buildings in phases, beginning with new building management software and control systems that enable their existing equipment to operate more efficiently and effectively. In many cases, the cashflow from each phase of upgrades provides funds for the next phase of upgrades.
Open Systems for Building Management
Before the early 2000’s, building systems were controlled by proprietary, or ‘closed’ systems that only worked with the manufacturer’s equipment. Closed systems reflected the technical limitations of that era, but they also provided a powerful way for manufacturers to lock-in their customers and lock-out competing products.
Over the last decade, ‘open’ software systems have emerged as powerful forces in many industries. These systems enable equipment from different manufacturers to communicate with each other and operate as a ‘system of systems.’ Building Access Control companies have also experienced a similar evolution of closed versus open systems.
Master Building Systems Integration
The practice of Master Building Systems Integration (MBSI) has developed rapidly over the last five years. MBSIs have a wide range of implementations, from a few sensors and simple IF-THEN rules for control, to AI-based systems that monitor the entire building, predict and plan based on multiple goals, orchestrate the operation and interaction of each system, and learn from every day’s operating experience. Instead of ‘soloists playing in silos,’ the building’s systems and work together like a finely tuned orchestra.
inteliGlas is a master building systems integrator with intelligent autonomous control and decades of experience in owning, marketing, and managing commercial real estate. inteliGlas brings you the following benefits:
- Simultaneously optimized for the key goals of all the building’s stakeholders: create economic value, health and wellness, reducing risks including cyberattacks, and sustainability.
- Fast installation without disrupting tenants
- Integrates with your existing building systems
- Powerful operational insights that lead to better retro-commissioning decisions
- Fast ROI that helps to finance your future upgrades
With inteliGlas as a trusted partner, the older buildings in your portfolio can deliver the benefits of 21st Century buildings.