Digital Twins in CRE: Copy, Paste, Operationalize

Why this technology should be on the radar of property operators.

This month I want to take a closer look at digital twins—virtual representations of physical assets, such as real estate—which I introduced in last month’s column, “Digital Trends for 2021 and Beyond.”


Image by ptra via
Image by ptra via

If you own, operate, or maintain a property, digital twins should be on your radar. For one, their growth rate is accelerating; according to MarketsandMarkets, the digital twin market is projected to hit $48.2 billion by 2026, up from $3.1 billion in 2020. Second, this growth means we will likely see more pervasive use of digital twins in real estate as a tool to understand more accurately and granularly what’s happening throughout a property and improve operations.

As a result, those who use digital twins will be able to create more efficiencies for their properties and tenants, such as triggering intelligent, deliberate maintenance and cleaning; reaching sustainability goals; and reducing operating costs. Let’s look at some of these examples more prescriptively.

Intelligent, deliberate maintenance and cleaning. Unfortunately, “run to fail” maintenance policies are more common than not. While routine maintenance on critical building systems is a mainstay, many CRE executives are less focused on advance warning systems for major mechanical components that are important to keeping occupants, shoppers, residents and customers safe and comfortable. The Internet of Things, along with digital twins, can be used to manage recommended maintenance for these critical systems, as well as to generate equipment health reports based on data trends and patterns. Importantly, should the data find signs of trouble, it can be programmed to send an alert, trigger a maintenance event, or make recommendations based on failure rates or building-use habits. For example, maybe a new chiller is needed to handle heat load more efficiently.

Digital twins and sensors can similarly help with building hygiene. As we return to commercial real estate spaces, tenants will want to be assured that their buildings won’t get them sick. Digital twins and sensors can also work together to trigger cleanings on demand or change the intensity and frequency of scheduled cleanings. It’s likely that the pandemic is heightening sensitivity to what a “clean” building means. Digital twins can help companies automate sanitation procedures to meet a new era of safety standards and build trust with tenants.

John D'Angelo
John D’Angelo

Equipment or cleanliness failures and the resulting downtimes cost time and money, and sometimes lead to the loss of unhappy tenants or to reputation damage. While such significant problems don’t happen often, it’s nevertheless important to decide whether it’s valuable to prevent them. If it is, digital twins could be your solution.

Lower operating costs. Building control systems and digital twins can also work together to intelligently monitor space use and maximize the energy efficiency of mechanical systems, like lighting, temperature, and airflow. Intelligent thermostats are a great example. I thought the biggest benefit of the one I recently installed at home would be turning down the temperature from bed. I discovered a larger benefit, though. Our intelligent thermostat pays attention to my family’s behavior and activity; “learns” what we do and how we like the temperature; autonomously implements what it thinks we want; and reports monthly on energy savings. Imagine that on a larger scale for a commercial building—along with lighting and controls for mechanical systems—and you get an idea of what’s possible with connected systems, sensor information, artificial intelligence and action triggers.

Protecting leases. Digital twins paired with sensor data can also help monitor shifting tenant use patterns, potentially signaling when a lease may be at increased risk of non-renewal. Landlords may be able to act on the information to either help retain that lease or plan farther ahead for turnover.

The possibilities offered by digital twins seem practically endless. They have the power to provide valuable, unbiased information to understand the health of an asset (based on use) or a lease. Ultimately, the goal is to use this technology to improve asset performance and returns and free up time for owners, operators and managers to focus on more strategic initiatives—such as the next digital trend that will best strengthen their operations.

John D’Angelo is a managing director with Deloitte Consulting and leads the real estate industry sector for Deloitte Consulting in the U.S. His experience as a management consultant to the global real estate industry spans more than three decades.

Read the March 2021 issue of CPE.