Johnson Controls on Commercial Real Estate Security Trends: Part One

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Cutting Costs, Attracting Tenants with Security Solutions

Physical identity management is hot in commercial real estate.

That's an early finding as we've begun research into security best practices in several vertical industries, including commercial real estate. One expert we consulted was Steve Cory, Director, Network Alliances, for Johnson Controls (pictured). Cory_Steve_Picture.jpgCory spoke with us about several key security trends he is seeing in that space, which he defines as "any facility used as a place of work or for the production of goods and services." He discussed how such security stalwarts as access control and video surveillance are gaining new security--and business--utility in the commercial real estate sector.

What follows is Part One of a transcription of our conversation, edited for clarity and length.


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Sharon J. Watson: Typically when you're thinking of your client, is that the entity that owns that facility or the tenant within that facility or a mix?

Steve Cory: It could be a mix. There are typically three entities that could be present at a facility. There's the owner/developer who owns the property; there are the tenants that utilize the space on an owned, leased or rental basis; and then there's often a property management company that manages the facility on behalf of the owner.

SJW: Of those parties, who is most vocal about their security needs?

SC: It depends on the stage of the engagement. If it's new construction, a building under development for example, then we'd be talking to the owner, the architect and the construction manager about the requirements of security infrastructure during the design and construction process. Once that building is completed and we start to move into occupancy, then the tenant or owner-operator would have a lot more say.

It's interesting that while we put fire and security together as a discipline--because they are very similar in terms of protecting people, property, assets and so on--fire most often gets specified during the construction phase of the project, while historically security tends to get specified by the owner.

Imagine that I'm a commercial developer and I am building a new speculative office space, say, a 50-story commercial high-rise in downtown Atlanta, I can put that building together, I can get fire marshal approval, I can get a certificate of occupancy--and I don't necessarily need to have any security in that building....
Now let's say I'm leasing that facility out and three separate companies are going to become tenants. Those three companies may already have standards for their own security systems, and they want to be consistent with those existing standards. For example, let's say one company is committed to Lenel, another company is committed to GE and another company is committed to Johnson Controls as its security platform. The [tenants] typically will want to put their own security system in so they can manage their global security infrastructure with as few variations in technology as possible.

For example, I'm working with a global client where about 70% of their real estate is owned and about 30% of their real estate is leased. For the 70% of the real estate that's owned, they've got a standard for security. Another company I can think of [has] got five different security systems in one country. Imagine trying to manage access control identities and access rights across those five different systems. If I'm an executive and I regularly visit all five facilities-- does that mean I need to have five badges to get in and out of those facilities?

SJW: I hear that is common.

SC: Yes. So what's happening in the industry is that there are integration platforms that have been developed and introduced -- and Johnson Controls is delivering these platforms -- that will allow you to integrate disparate systems. In the commercial real estate world, for example, I could have a Lenel system in Seattle, a Johnson Controls system in Boston and a GE system in Atlanta. As an integrator, I can now deliver a unified platform that will enable the customer to have one central database for managing identities across the enterprise that will also be synchronized with those three different access control systems in the different facilities.

SJW: You are talking about something like a [physical identity management] solution offered by a Quantum Secure?

SC: Exactly. There are several out there; Quantum Secure is one of the most popular and probably the benchmark, I would say. The other thing is that with all of the systems going to Internet Protocol, becoming IP-centric, there's a lot more standardization of technology and much more open architecture that makes it a lot easier to manage multiple platforms across a widespread commercial real estate portfolio.

Another important consideration of managing a portfolio for the real estate professional is that acquisitions and mergers can quickly change the facility landscape. The company may have a security person who says 'we are only going to have Johnson Controls.' If the organization acquires another company that's got, for example, a GE platform, you've got two choices. Some companies are big enough they execute a 'rip and replace' approach: they take out the existing system and replace it with the company standard. They can often reuse existing infrastructure but they would have to go in and potentially replace the card readers and controllers. That can be expensive; that might cost you millions of dollars to replace all those systems over time.

The Quantum Secure solution for example allows you to have some variation in your systems globally without the need to implement a rip and replace strategy. Now you can have regional or even country variations. So you might have one type of platform for Europe, another type for North America and another for Asia.

"Connected" Real Estate

SC:
One of the initiatives we are working on--and we're finding a great deal of interest on behalf of customers in it--is to how we can help customers more efficiently manage their real estate portfolios with technology and how to get more productivity from their investment. One trend that's driving this is the virtualization of the workforce. Look at me: I'm calling you today from my home office. I don't have a permanent office in a Johnson Controls facility so I work from home and then I travel.

Page:   1   2  Next  »

Cutting Costs, Attracting Tenants with Security Solutions

Physical identity management is hot in commercial real estate.

That's an early finding as we've begun research into security best practices in several vertical industries, including commercial real estate. One expert we consulted was Steve Cory, Director, Network Alliances, for Johnson Controls (pictured). Cory_Steve_Picture.jpgCory spoke with us about several key security trends he is seeing in that space, which he defines as "any facility used as a place of work or for the production of goods and services." He discussed how such security stalwarts as access control and video surveillance are gaining new security--and business--utility in the commercial real estate sector.

What follows is Part One of a transcription of our conversation, edited for clarity and length.


****
Sharon J. Watson: Typically when you're thinking of your client, is that the entity that owns that facility or the tenant within that facility or a mix?

Steve Cory: It could be a mix. There are typically three entities that could be present at a facility. There's the owner/developer who owns the property; there are the tenants that utilize the space on an owned, leased or rental basis; and then there's often a property management company that manages the facility on behalf of the owner.

SJW: Of those parties, who is most vocal about their security needs?

SC: It depends on the stage of the engagement. If it's new construction, a building under development for example, then we'd be talking to the owner, the architect and the construction manager about the requirements of security infrastructure during the design and construction process. Once that building is completed and we start to move into occupancy, then the tenant or owner-operator would have a lot more say.

It's interesting that while we put fire and security together as a discipline--because they are very similar in terms of protecting people, property, assets and so on--fire most often gets specified during the construction phase of the project, while historically security tends to get specified by the owner.

Imagine that I'm a commercial developer and I am building a new speculative office space, say, a 50-story commercial high-rise in downtown Atlanta, I can put that building together, I can get fire marshal approval, I can get a certificate of occupancy--and I don't necessarily need to have any security in that building....
Now let's say I'm leasing that facility out and three separate companies are going to become tenants. Those three companies may already have standards for their own security systems, and they want to be consistent with those existing standards. For example, let's say one company is committed to Lenel, another company is committed to GE and another company is committed to Johnson Controls as its security platform. The [tenants] typically will want to put their own security system in so they can manage their global security infrastructure with as few variations in technology as possible.

For example, I'm working with a global client where about 70% of their real estate is owned and about 30% of their real estate is leased. For the 70% of the real estate that's owned, they've got a standard for security. Another company I can think of [has] got five different security systems in one country. Imagine trying to manage access control identities and access rights across those five different systems. If I'm an executive and I regularly visit all five facilities-- does that mean I need to have five badges to get in and out of those facilities?

SJW: I hear that is common.

SC: Yes. So what's happening in the industry is that there are integration platforms that have been developed and introduced -- and Johnson Controls is delivering these platforms -- that will allow you to integrate disparate systems. In the commercial real estate world, for example, I could have a Lenel system in Seattle, a Johnson Controls system in Boston and a GE system in Atlanta. As an integrator, I can now deliver a unified platform that will enable the customer to have one central database for managing identities across the enterprise that will also be synchronized with those three different access control systems in the different facilities.

SJW: You are talking about something like a [physical identity management] solution offered by a Quantum Secure?

SC: Exactly. There are several out there; Quantum Secure is one of the most popular and probably the benchmark, I would say. The other thing is that with all of the systems going to Internet Protocol, becoming IP-centric, there's a lot more standardization of technology and much more open architecture that makes it a lot easier to manage multiple platforms across a widespread commercial real estate portfolio.

Another important consideration of managing a portfolio for the real estate professional is that acquisitions and mergers can quickly change the facility landscape. The company may have a security person who says 'we are only going to have Johnson Controls.' If the organization acquires another company that's got, for example, a GE platform, you've got two choices. Some companies are big enough they execute a 'rip and replace' approach: they take out the existing system and replace it with the company standard. They can often reuse existing infrastructure but they would have to go in and potentially replace the card readers and controllers. That can be expensive; that might cost you millions of dollars to replace all those systems over time.

The Quantum Secure solution for example allows you to have some variation in your systems globally without the need to implement a rip and replace strategy. Now you can have regional or even country variations. So you might have one type of platform for Europe, another type for North America and another for Asia.

"Connected" Real Estate

SC:
One of the initiatives we are working on--and we're finding a great deal of interest on behalf of customers in it--is to how we can help customers more efficiently manage their real estate portfolios with technology and how to get more productivity from their investment. One trend that's driving this is the virtualization of the workforce. Look at me: I'm calling you today from my home office. I don't have a permanent office in a Johnson Controls facility so I work from home and then I travel.

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 As we virtualize the workspace, and more and more of us are becoming less and less dependent on a fixed office, we potentially don't need as much physical real estate. However, let's say I'm traveling to Seattle and going into my company's local office, I would personally like the ability to ensure that I have an office available for my use ahead of time. Again, this is not being implemented yet but the technology to do this is available already.

So I'd like to go to my PC and look up the office in Seattle and book an office space [there] on Wednesday between 8:00 a.m. and 5:00 p.m. using my online booking tool. When I arrive in Seattle, I present my badge to the security system and I badge into the building [to an] outer door or a kiosk in the lobby. The kiosk says, 'Welcome, Steve. Here is the emergency egress information, the fire and safety rules for the building, and you've been booked into office number six, and here's a map.'

So now I follow the map. I go to office number six and as I walk into office number six, the LCD screen on the door shows my name, the office temperature is set the way I want it, the light source is the way I want it, the environment of that office is set just the way I want it. The system can also tell my global directory that Steve Cory is in the Seattle office today, and it can route all my phone calls to the IP phone in that office for the day.

That is what is often referred broadly to as connected real estate or smart environments. What we're effectively doing is using a security system identity, the enterprise identity management tool, as a solution component of connecting my real estate together so I can go from facility to facility to facility and each will always know who I am and what my preferences are and I can make better use of the corporate real estate.

SJW: The infrastructure for accomplishing this--this would be owned by the tenant in the building or is this something that a building owner would install in a facility to offer as a potential profit-making service?

SC: It could be both. When you build a building, you put in the electrical connections, mechanical connections, the lighting. Now what we call the fourth utility, you're putting in place the IP network. So when buildings get built, they're also building wired and wireless networking infrastructure into that building. That could be offered as a profit center, a revenue producing service by the owner of the building.

At the same time, though, the actual connected real estate I use to badge into my own company would probably be more tenant-oriented. But for...commercial property developers and facility management organizations [that] understand the connected real estate and have network infrastructure in their building, there are definitely revenue opportunities for them in terms of offering services to tenants.

SJW: Steve, what is driving that kind of [identity] connectivity? Are they thinking in terms of preventing security issues or is it about being more streamlined and saving cost?

SC: There are probably three issues. The overriding issue is economics: Help me make better use of my real estate at lower cost. So there's the economics of maximizing the utility I get from my real estate. If I need fewer offices I've lowered costs.

Also, in terms of a Quantum Secure solution, I can manage identities in one place rather than multiple places in terms of issuing and [revoking] badges. There's a cost associated with managing that identity across multiple security systems. So there's a capital cost reduction and there is an operational cost-reduction. That's the economics.

The second thing in specifically security terms is there is an expectation on the part of the workforce for a certain level of safety and security in the building. Just like you have an operational fire alarm system that will protect them in the case of fire, they expect you to have an operational security capability that will protect them in the event of an incident.

The third one probably is if you are an owner/developer and you're trying to attract tenants to your building, the more features and value you can bring to that tenant for that space, the more competitive you're going to be. For example, I'm thinking of a building here in Atlanta where we did a lighting retrofit a couple years ago....a really nice facility. In the basement they had a small facility with a florist, a [pharmacy], a small store. The reason they offered [those convenience services] was so the building would be more attractive [to professional tenants].

It would be the same with the connected building: as a tenant, I would expect you to have high speed broadband, a high-speed wireless infrastructure so I can go to the coffee shop, grab a cup of coffee and take my laptop or my smart phone with me and use the wireless network to remain productive. So there is a competitive advantage to having a smart environment.

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In part two of our conversation, posting Monday, we discuss other security trends, including the rise of interest in the smart badge and the future relationship between IT and security professionals.

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