Work is on the brink of a revolution – we need office buildings to match

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Coen van Oostrom, Founder and Chief Executive Officer, EDGE, OVG Real Estate

COVID is ushering in a new era of flexible working; it is an opportunity to rethink office design.

• Smart facilities in buildings are currently poorly coordinated.

• Developers need uniform standards to fully implement innovative construction methods.

Picture this: It’s a Sunday, sometime in the not-too-distant future, and you’ve just walked into a mostly empty office building. You’re there to attend a meeting – one of the few times per week you actually have to go to the office any more, since so much of your work is done at home now. The moment you enter the dimly lit reception, the lights go up; you cross the open office floor, and then ascend a sweeping wooden staircase, saying hello to a few stray colleagues sprawled on the steps drinking coffee. Having scheduled your meeting in advance, the conference room is already prepped for your arrival, freshly cleaned, and the air set to the perfect temperature. Once the meeting is over, you stop at an unoccupied desk, fire off a couple of emails, and in minutes you’re back in light traffic on weekend streets, headed home.

None of this, of course, is so difficult to imagine. And that’s the point: heat and motion sensors; automated mechanical features; cloud-based data aggregation, readily accessible via easy-to-use digital platforms – as we approach the quarter-century, all of the ingredients for a more energy-efficient, humane and healthier work environment are already in place. The technology is there, the expertise is there, and with the advent of COVID, safer and more flexible working patterns are coming into play as well. Conditions seem ripe for a paradigm shift in how our office buildings are designed and managed.

The only problem? These new patterns, along with the tools that allow us to maximize the new office’s potential, have yet to be fully and consistently integrated. From the materials we build with, to the leases we sign, to the day-to-day minutiae of operation, a whole new way of doing business is at hand – but the building-development industry is held in check, stymied by an array of factors. Fortunately, these challenges can be overcome if only we meet them squarely.

The imperative to do so could hardly be clearer. Even before the current pandemic, it was obvious that we had to rethink the way we build and work. With the European Union poring over its ambitious Green Deal – and with the possibility that the United States could adopt a comparable programme in the near future – pressure has been mounting on industries of all kinds to take action on climate change. Buildings and the building trades have long been a major part of the world’s carbon problem, accounting for 39% of global emissions according to the United Nations Environment Programme. At the same time, the buildings market also represents low-hanging fruit, a highly controlled, closed-system economy where inputs and outputs can be measured and adjusted with relative ease. Already, great strides have been made in the field: Zero-waste work sites are fast becoming the norm, while material makers, architects and municipal governments are racing to meet the World Green Building Council’s goal of total carbon neutrality by 2050.

What’s holding them back is a lack of coordination – as well as a pervasive misunderstanding on the part of end users about what today’s smart buildings can do.

As regards the former: While developers and operators are well aware that the internet of things is coming to buildings, its implications for efficient management are still going unrecognized. The myriad suppliers whose work goes into any office building – the elevator manufacturers, lighting companies and heating, ventilation and air-conditioning firms – all are adding digital features to their products; and yet the products are not adequately connected, either to one another or to a central command module. In several recent and ongoing office projects from my firm, we deployed a new platform we call EDGE Next, an office-wide digital system that allows both workers and facilities teams to access information on almost every aspect of building performance.

Failure to coordinate within buildings is paralleled by a broader failure to coordinate between builders, and between different building cultures. The lack of uniform standards among developers, among nations, even among cities in the same nation, makes it necessary to reinvent the wheel over and over, both in the construction process and afterwards. To consider one example, new structural applications for wood, including in high-rise buildings, have proven it to be a safe and sustainable alternative to steel, with the added benefit of enhanced carbon capture. But in too many markets, neither the regulatory regime nor local trades organizations have kept pace with material science, making it practically and often legally impossible to create large-scale wooden office buildings. As in construction, so in management: If both bureaucracies and business leaders would adhere to general performance guidelines, networked digital platforms could make it possible, not just for individual businesses, but for entire business districts to reach optimal efficiency.

Finally, there is the problem of perception. In large measure, the reason for our overall lack of coordination is due to misplaced fears about the economic costs of greener, cleaner offices. In New Jersey in 2018, our company completed a new headquarters for Unilever. To overcome anxiety about prohibitive cost, we devised a financially backed performance guarantee – and then we beat that guarantee, bringing operating expenses to a previously unimaginable low. Through similar contractual incentives, as well as through intelligent tax and subsidy schemes, we can change the maths behind smart buildings, and with it the minds of the public.

Because in the end, this isn’t just about office buildings. Yes, the office of the future will be less crowded; it will have fewer assigned desks, fewer vertical floors, more staircases doubling as social spaces; the people who work there will have shorter commutes and commute less frequently, signing up for meetings from home; and their schedules will be instantly posted to the building network, allowing the cleaners to finish up, and the climate control to kick in exactly on time.

What is the World Economic Forum doing to support the Future of Real Estate?

While investable real estate has grown by more than 55% since 2012 (PwC), the COVID-19 crisis has underscored weaknesses in relation to human and planetary health along with drastic inequalities, leaving a stark reminder of the influence the built environment has on societies and the vulnerabilities that exist in times of crisis regarding how spaces perform.

As the real estate industry looks towards recovery, the need for transformation is clear. Portfolios must be rebalanced, and distressed assets repurposed. Technology must be fully embraced, and sustainability and wellness must be at the core of design and operation. The affordable housing crisis that already existed pre COVID-19 must be systemically approached to ensure access to adequate and affordable housing. If the Real Estate industry is to deliver transformation, it is more important than ever to ensure that policy, financing and business solutions are aligned in delivering better buildings and cities.

The World Economic Forum has brought together CEOs from the Real Estate industry to develop a Framework for the Future of Real Estate to help drive the industry’s transition to a healthier, more affordable, resilient and sustainable world.

But what all this truly points to is the next frontier for smart buildings: the home. If we in the development community can show what’s possible in the workplace, we will have taken one giant step towards persuading people everywhere to expect more from their living places, to demand houses that are healthy for them and healthy for the environment. That is the transformation we ultimately must see, and that is where all our efforts must now be focused.