Reimagining Real Estate

August 23, 2007

By David Barry, News@Cisco

A new city is being built in South Korea that will be unlike any city ever built: it will be designed from its inception to be a digital city. From electric or hydrogen cars connected into a city-wide grid, to pneumatic garbage disposals in homes shuttling waste directly to methane-producing garbage processing centers for fuel, to digital signage in parks changing based on sensor-based pedestrian activity, New Songdo City in South Korea will be a test bed for innovation on an unprecedented scale.

"The goal of New Songdo is not to build wired buildings and cities, but to create inspirational buildings and sustainable cities in which technology enables personal lifestyle choice and corporate innovation," says Stanley C. Gale, chairman and managing partner, Gale International, designing and building New Songdo City. "Do you want to access information through a computer or would you prefer to work off the surface of a wall? If you need personal transportation, swipe your Songdo card at one of 10,000 hydrogen electric cars that will be circulating throughout the city. Ultimately, we want technology to be less evident and to be intuitive to the nature of how people move around the city and do business."

"We believe that digital technology's impact on real estate will be as profound and far reaching as that of power, water and transportation's impact on buildings and cities during the last 150 years ," says Wolfgang Wagener, head of sustainable cities, Connected Urban Development for Cisco's Internet Business Solutions Group (IBSG, and a lead editor of "Connected Real Estate," released by Cisco Press in June 2007. "Real estate contributes 10 percent to the worldwide GDP and employs more than 100 million people and yet it has barely been touched by new digital technology."

"Connectivity is playing a pivotal role in transforming the built environment," said Mark Golan, vice president and worldwide lead of the Connected Real Estate practice at Cisco IBSG. "In 'Connected Real Estate', industry leaders from around the world have examined how technology is changing user experiences, streamlining processes, reducing cost and fostering environmental sustainability."

Through a series of essays by thought leaders in the real estate, design and construction industry, 'Connected Real Estate' identifies the profound ways in which real estate and technology are becoming inseparable to include:

• 4th Utility-building communications infrastructures will no longer be only an afterthought for providing Internet access or phone service but will become the 4th utility--an integral part of the building itself and as relevant as water and electricity and gas. In fact, all building systems will converge onto one building communications infrastructure based on the IP protocol.
• Evolution of the Workspace--it's generally estimated that as much as 60 percent of a building's workspace is wasted because workers are not at their desks working--they're either off-site or attending meetings. This will change as companies cannot afford to so drastically underutilize a costly asset. According to Mark Nicholls, Bank of America's corporate workplace executive, "empty offices during working hours echo with the sound of coins rattling up the air vents."
• Transformation of Urban Environment--the impact of digital technology will transcend the buildings themselves and begin to transform the urban environment. New Songdo City is a dramatic example of this, but other cities such as Zaragoza in Spain are also deploying digital city environments. These new urban environments are also known as "ubiquitous cities," or "U-Cities," where all major information systems and "sensor dust" will be built into the houses, streets, cars, and office and medical buildings and will be completely integrated.

Reimagining the Workspace

Estimates vary on the utilization rate of office buildings, but some industry observers believe that an estimated 60 percent of office building interiors sit idle, as workers are increasingly mobile and away from their offices a majority of the time. Mark Nicholls of Bank of America writes in Connected Real Estate that with "employees spending significant time in meetings, training, or at client sites and factoring in several weeks of vacation and sick days, it's understandable why office utilization rates sometimes dip as low as 14 percent--compared to a minimum generally acceptable level of around 70 percent for alternative capital investments in manufacturing."

As a result, leading thinkers are re-imagining the premise upon which office buildings have been designed and built for the last 50 years.

"Why should office buildings continue to be built based on rigid concepts of space use--interiors with private office space, meeting rooms, or social spaces--when this rigidity is unable to adapt to a new reality in the world of work--that people are increasingly mobile and away from their desks," says Bill Mitchell, professor of architecture and media arts and sciences, at MIT and also a contributor to "Connected Real Estate."

Mitchell believes that the growth of ubiquitous connectivity and portable and mobile devices means that the use of space can become much more fluid. "Anywhere you sit down with a network-connected laptop, or use your cell phone, becomes a potential workspace. Where work materials and tools are stored in portable memory, or delivered via the network, moving costs are reduced to almost zero; to change offices, you simply pick up your laptop and go."

Mitchell likens the fluidity of the new office environment to that of a computer hard disk.

Mitchell points to the Student Street within the Stata Center at the Massachusettes Institute of Technology (MIT) in Cambridge as an example of a fluid environment. Part of a multimillion dollar expansion of the MIT campus during the late 90s with the goal of reinventing architecture using technology, the Student Street is part of the Stata Center's infinite corridor system. Its various nooks and crannies offers students places to socialize, work in an informal setting, or escape with a book. Use of the space is fluid and changeable as needed and conducive to many types of uses.

Younger Generation Primed for New Work Environments

The students who are studying at the Stata Center, like students and young people the world over, are comfortable with the new technologies. In fact, Wagener believes that the work environment will need to adapt to accommodate the new generation that is as comfortable with instant messaging, social networking and mobility as today's generation is with spreadsheets and word processing.

"Visionary companies such as B of A, which is constructing a spectacular building in New York set to open in 2008 that employs cutting-edge energy features, sustainability design and flexible work spaces, understand this, " says Wagener. "They see the demographics of the younger workforce that grew up with technology and needs a completely different work environment to function best. Combined with the imperative to gain much better utilization rates from their costly real estate assets, these leaders are at the forefront of a thrilling new era of building design."