Fortune 500 consulting firm Accenture (NYSE: ACN) just put digital twin technology on its list of the top five tech trends in 2021.
A digital twin is a virtually built replica of an object or system created using sensors to gather real-world, real-time data about the particular object or system. These sensors are connected to a cloud-based system that gathers, processes, and aggregates the data. So what are the implications for the real estate industry?
More on digital twins
Digital twins are a virtual representation of a physical asset in the real world. Using remote sensors and Internet of Things technology (or IoT), digital twins are used to deliver insights about what's happening remotely in an asset, which allows users to react accordingly without having to be physically present. The clear-use cases, and thus early adopters, for digital twins are industries with remote assets, such as aerospace, and large, process-heavy industries, such as chemical manufacturing.
Although landlords don’t own buildings in outer space (yet) and building operations processes aren’t quite as sophisticated as manufacturing plants, the potential benefits to large landlords and property managers are clear.
The implications for real estate
Imagine a landlord with hundreds of commercial buildings spread across the globe having the ability to see real-time, digital versions of their assets. They would be able to capture energy usage, measure air quality, track facilities and maintenance patterns, and gather traffic tendencies within the buildings.
For example, when a landlord pairs the ability to control energy usage, such as HVAC and lighting, with the ability to predict where and when their tenants will be, the owner or manager will be able to make informed decisions that can lead to energy cost savings. At the same time, large-scale building managers will require fewer operational layers.
This energy-saving use case just described can be thought of as a “first-level” type of benefit. It is clear, obvious, and delivers an immediate impact. An example of a more complex use case would be having the ability to give tenants more meaningful data around how they are using their rented space and how to better plan for the future. For example, do they really need 10,000 square feet of space, or could their work space be set up more efficiently?
Another benefit to the landlord is the ability to show detailed 3D models of their offices, retail locations, and work spaces that can adjust to different scenarios with digital twins. For example, a prospective tenant could visualize different office layout options.
Given the continued development and deployment of digital twin technology, a truly self-maintaining building could be possible. In this scenario, a building would be able to predict or recognize when something fails, then call out a technician or hire a contractor and direct them to the issue at hand, all while providing specs and historical records about the asset.
Digital twins and real estate in the news
Matterport recently announced its intentions to go public through a special purpose acquisition company (SPAC), an accelerating trend for proptech companies.
Matterport gives landlords and property managers the ability to capture 3D renderings (or digital twins) of their properties, allowing prospective tenants to take virtual tours. Matterport's technology even integrates with an iPhone camera.
The company’s technology is also used during construction projects to streamline documentation and collaboration. Other applications include facilities management, hospitals, property disaster restoration, and insurance.
The Millionacres bottom line
The pieces are starting to come together to bring digital twins mainstream in the real estate sector. While we’re still in the early days, further development and adoption of digital twins will help boost efficiencies in the industry, create greater transparency, and deliver bottom-line impact. It's definitely a trend for real estate investors to watch.