What can your building handle digitally?

Back to School. RE-SEARCH was invited by Tio Business School to give a guest lecture on Digital Real Estate to students in the Real Estate Brokerage program. The next generation of real estate professionals, in other words, who will soon be leasing, letting, appraising and advising.

The fact that this topic belongs in a real estate program is no coincidence. Technology and real estate are becoming increasingly intertwined. A building is no longer simply a collection of square meters with a roof and a power connection. It is also a place where organizations run on cloud software, video communication, AI tools and a growing number of connected devices.

The central idea of the lecture can be summarized simply. Alongside the classic question of what a building costs, and the by now familiar question of how sustainable a building is, a third fundamental question arises: what can this building handle digitally? This article explores why that question is becoming increasingly important.

From phone line to AI building

To understand where we stand today, it helps to look back briefly. Not so long ago, a phone line and a simple internet connection were enough. A building had a connection, and that answered the digital question.

Much has changed since then. Broadly speaking, that development looked like this:

• telephony and the first internet connections;
• broadband and fiber optics;
• internal data cabling throughout the building;
• WiFi and mobile coverage;
• cloud software and SaaS;
• Smart Buildings that centrally control installations;
• the Internet of Things, meaning devices that communicate with each other;
• sensors that collect building data;
• digital access control and security;
• AI applications and steadily rising data consumption.

Each step in this list placed slightly higher demands on the building. Where a single cable once sufficed, the focus now is on capacity, reliability and the ability to grow along with demand. Our overview on the path from phone line to digital lifeline describes this development in more detail.

The AI revolution is changing the demand for real estate

AI deserves special attention here. Its impact is visible not only in software and business processes, but also works its way indirectly into the building itself. Organizations use more cloud applications, more real-time data and more connected devices than they did just a few years ago. As a result, a reliable digital connection becomes a precondition for daily operations.

The comparison with energy is obvious. Without energy, a building does not function. But without a digital connection, a modern organization does not function either. That makes digital infrastructure no less important than a power connection, only less visible. We previously wrote about how AI and real estate are increasingly influencing each other in this way.

We naturally examine whether a building can supply enough energy. The question of whether it has enough digital capacity is far too often skipped.

It is important to note that not every tenant has the same digital needs. A law firm, an AI start-up, a healthcare organization, a logistics company and a creative business can all have very different digital usage profiles. To make that difference discussable, we use the term data consumption: an indication of how much, and how intensively, an organization makes use of digital connections and applications. You can read more about this in our article on data consumption as the new square meter.

Grid congestion and data congestion are not the same

Grid congestion is now high on the real estate agenda. Everyone understands that a shortage of energy capacity can stand in a building's way. The quality and capacity of digital infrastructure, by contrast, often still receives far less attention.

With the concept of data congestion, IT-Label draws attention to situations in which digital infrastructure does not sufficiently match actual use or the future needs of users. This is explicitly not the same phenomenon as congestion on the electricity grid. It is a separate issue, with its own logic.

The core point is this: we are used to examining whether a building has sufficient energy capacity. Why do we not routinely examine whether it has sufficient digital capacity and quality? Anyone wanting to explore this further can turn to our explanation of whether we will soon face digital congestion too.

The blind spot in real estate

In many leasing, acquisition and advisory processes, digital infrastructure only comes up late in the discussion. A tenant usually has no trouble obtaining information about a building's key characteristics.

• square meters;
• rent and service costs;
• energy label;
• parking spaces;
• accessibility;
• installations;
• delivery condition.

Information about internet connections, fiber optics, mobile coverage, data cabling, WiFi infrastructure, server facilities, redundancy and Smart Building technology is not always readily available. Yet these are precisely the elements that determine whether an organization can start working the day after handover. We previously described how IT infrastructure is missing from almost every leasing brochure.

That raises a logical question. Why do we make so many real estate characteristics transparent, while a building's digital quality often remains invisible? Not because that quality is unimportant, but because for a long time there was no shared language for it.

The role of IT-Label

IT-Label is an initiative to make the digital quality and digital delivery level of real estate more understandable, measurable and transparent. It is not a certification with legal status, but an independent classification methodology and a knowledge collective. What it entails exactly is described on the page what is the IT-label.

The ambition is to translate technology into real estate language and user language. A tenant does not need to become an IT specialist to understand what is being delivered digitally. A broker does not need to be a network engineer to ask the right questions. And an owner does not need to read a technical manual to gain insight into the digital readiness of their building.

It is important that IT-Label does not replace existing standards such as energy labels, BREEAM, WELL or NEN and ISO standards. It focuses specifically on digital quality and digital readiness. We explain how that relationship works in our overview of the difference between ISO, NEN, BREEAM, WELL and IT-Label.

Tomorrow's real estate professional

This is where the core of the guest lecture comes together. Tomorrow's real estate professional does not need to become an IT specialist. But they do need to understand which digital questions are relevant. Consider questions such as:

• Is fiber optic available?
• What capacity is available?
• How good is mobile coverage inside the building?
• What is delivered to a tenant digitally?
• What infrastructure already exists, and what does the tenant need to arrange themselves?
• Is the building prepared for Smart Building and IoT applications?
• Does the infrastructure match the data consumption of the future user?
• Is future expansion possible?

The parallel with sustainability is illuminating. A broker does not need to be an electrical engineer to understand the importance of an energy label. In the same way, digital infrastructure should become a natural part of the professional real estate conversation. Anyone who wants to see both foundations side by side can read further in energy and IT as two equally important foundations.

From luxury to basic knowledge

Digital knowledge was, for years, a subject for specialists. That is shifting. In a market where tenants increasingly ask first what kind of connection is available, digital readiness becomes a topic at the negotiating table. For brokers, appraisers, asset managers and property managers, this also changes what is expected of their advice.

Sharing knowledge with the next generation

The fact that topics such as AI, Smart Buildings, IoT and digital infrastructure are finding their way into real estate education is a positive development. Students who learn today what digital quality means will ask better questions in practice tomorrow.

RE-SEARCH shares knowledge from both research and daily real estate practice with the new generation of professionals. You can read more about this collaboration and its background in RE-SEARCH makes IT-Label part of the search. IT-Label works from that same development to make digital quality discussable and understandable. More about the organization behind RE-SEARCH can be found at re-search.com.

Sharing knowledge multiplies knowledge. The connection between education, real estate and technology ensures that a new generation of professionals will not see a building's digital layer as a side issue, but as a standard part of the assessment.

Take the next step yourself

Tomorrow's real estate professional no longer looks only at location, square meters, rent and sustainability. Increasingly, something is added to that list: digital infrastructure, connectivity, data consumption and digital readiness.

The message remains simple. No one needs to become an IT specialist. But in a world of AI, Smart Buildings and growing data consumption, a real estate professional can increasingly less afford not to understand digital infrastructure.

Want to see how digital quality is described in real estate language? Take a look at how the IT-label works and explore the smart building technology that will keep driving demand for digital readiness in the coming years. And when assessing the next building, ask the question that matters more and more: what can this building handle digitally?