CFO Corner: Is Your City Future-Ready?
- Nov 24, 2016
In recent years, urban infrastructure has run a gauntlet of challenges created by dramatically changing demographics. Commercial real estate developers, elected officials, urban planners and
other stakeholders are searching for innovative ways to manage the needs of growing cities. The solutions, which often center on the built environment and technological advances, point to one important trend: the rise of smart cities.
While some CRE owners maintain that the city of tomorrow is still far off, many others recognize that powerful forces ranging from Millennials’ lifestyle patterns to fast-changing technology demand a more immediate call to action.
Building a Future City
Cities are considered smart based on their ability to serve three main purposes: enhancing quality of life, improving economic competitiveness and fostering sustainable living. These missions can be achieved through a foundational layer of communication technologies built into the environment and addressing key areas, including living, economy, mobility, energy/environment/waste/water, security, and smart education.
Let’s dig deeper into a few of these areas to understand how each can be built out in the smart city of tomorrow.
Smart buildings. The notion around smart buildings is to increase quality of life and sustainability across office, retail and residential spaces. A premier example is The Edge, an office high-rise in Amsterdam that has been dubbed “the smartest building in the world.” (As the proactive lead tenant, Deloitte was responsible for the building’s innovations.)
The Edge is also among the greenest buildings in the world, constructed on the concept of resource efficiency. For instance, the building’s digital ceilings power lights, Internet and sensors through the same cables. The building is powered by a smartphone app that enhances the workplace by tracking how much sugar you put in your coffee and finding you a parking spot upon your arrival. Bonus: The Edge’s smart design is also an economic boon for its owner and tenants, attracting new business for its resident companies. All in all, The Edge is an innovative showcase for bringing together analytics, real estate and workplace dynamics.
Smart environment. Here, elements of real estate in public spaces that are often deficient—such as lighting, benches and garbage bins —can be intelligently transformed. Urban planners can employ sensor technology to turn these low-impact pieces of infrastructure into high-impact enablers. Sensors can intelligently activate outdoor lighting to save on electricity costs, monitor air quality while affixed to benches, help track climate change and inform policy, and streamline waste management by sending out alerts when trash bins reach capacity.
Smart mobility. When we dig further into city infrastructure, we cannot forget transportation, which will become increasingly important as we approach the age of the driverless car. Accommodating this future trend will enable cities to create efficient traffic flows and even allow mobile-restricted persons of all ages to participate more fully in the local economy. Urban planners should consider whether new or upgraded roads should incorporate dedicated lanes for driverless vehicles. For their part, CRE owners should look at ways to modify the designs of parking structures in order to accommodate both driverless and conventionally operated cars.
Steven Bandolik is a director with Deloitte Services LP and a senior leader in Deloitte’s real estate services practice. A three-decade industry veteran, Bandolik provides advisory services in a wide range of areas, including capital markets, corporate finance, mergers and acquisitions, investments, restructuring and reorganization, workouts and asset recovery.
Rana Sen is a managing director with Deloitte Consulting LLP. He has more than 18 years of experience implementing and leading major government transformation initiatives in public health, human services, transportation, and finance and administration. Besides advising government clients, Rana leads the firm’s smart city initiative for the U.S. public sector practice and supports Deloitte’s work with cities nationally. He also supports Deloitte’s work globally.
Images by Ronald Tilleman
Originally appearing in the November 2016 issue of CPE.