Commercial real estate is unique among industries, and not in a way owners should celebrate. According to Bill Douglas, CEO of OpticWise and co-author of “Peak Property Performance,” it’s the only industry that routinely allows vendors to install networks in their buildings and extract data from their own assets without compensation or oversight.
“I’ve worked in seven different industries in my professional career, and commercial real estate is one of the only industries I’ve ever seen where a business lets another business put a network in their property and take data out of their property,” Douglas explains. “Amazon wouldn’t allow it. Toyota wouldn’t do it in a manufacturing facility. Hospitals would never let anybody do that because they have HIPAA compliance issues. But commercial real estate does it all the time.”
The Costly Consequences of Network Neglect
The problem compounds quickly. Before long, a single building may house 15 different networks, none of which are properly mapped, managed, or monitored. When something breaks, property managers spend days troubleshooting technology issues rather than focusing on their core responsibilities: taking care of tenants and leasing up the building.
This isn’t a tech problem first – it’s an owner control problem. Without clear OT governance, every vendor builds their own mini-network, and your building becomes the integration layer.
“Nobody knows where the data is. Nobody mapped that network. Nobody’s managing that network,” Douglas notes. “The property manager is being paid to take care of tenants and lease up the building, not to run technology. So we’re drowning these awesome property managers by expecting them to keep up with networks that were never designed or managed and probably not even needed.”
When your team is troubleshooting networks, you don’t just lose time – you lose ticket cycle time, reviews, renewals, and leasing velocity.
This reactive approach to digital infrastructure transforms what should be a strategic asset into an operational liability. Property owners who meticulously track every other expense line item often apply a simple 1.02 multiplier to their technology costs each year without questioning whether those expenses are necessary or optimized.
If you don’t own your digital infrastructure, your vendors do. That means they own the rules, the access, and too often the data story behind your NOI.
The Financial Impact of Taking Control
When property owners audit their digital infrastructure and take control of their networks and data, the financial impact can be substantial. According to Douglas, the typical net operating income impact for apartment buildings is $500 per door per year in income, not just revenue. For office buildings, the impact ranges from 50 to 75 cents per square foot.
These aren’t theoretical projections. In one recent audit, OpticWise discovered a lighting controller that had been installed six years earlier but never activated. When the property owner turned it on and programmed it over three days, the building saved $70,000 in utility expenses over the following 12 months.
OpticWise starts with a PPP Audit that documents digital infrastructure ownership and data export paths – so the owner can set enforceable standards vendors must follow.
“Very rarely are there no savings found when we do an audit,” Douglas says. “It’s an exception. And if that’s the case, great. Here you go. We suggest you map it out so that the next time a vendor shows up and needs to get from here to there, they know they don’t have to go pull a new wire. You already have it.”
The AI Readiness Gap
The proliferation of artificial intelligence in commercial real estate has created another challenge for property owners. Vendors enthusiastically promote AI capabilities in their solutions, but most properties lack the foundational data infrastructure to make meaningful use of these tools.
Most buildings have reports. Very few owners have exportable, structured operational data they can use across systems – exactly what AI needs to be useful.
Douglas estimates that less than 5% of commercial real estate properties have access to comprehensive, exportable, usable operational data on their own property. While owners typically have forward-facing market data through leasing and property management systems, they often lack access to the operational data generated by their buildings.
“They might have all the leasing information,” Douglas explains. “They’re always market forward, market facing, but when they turn around and look internally, they don’t have their data. So they need to be looking both ways.”
Even when data exists in vendor systems, property owners typically can only access it by logging into individual platforms and running reports. They don’t have the raw data needed to apply AI and machine learning across multiple systems to identify correlations and optimize operations.
“AI can’t fix what it can’t see,” Douglas emphasizes. “It needs to see the data. So we’re a strong advocate of own and control your digital infrastructure and own and control the data it produces.”
From Expense to Investment
The path forward requires a fundamental shift in how commercial real estate views technology. Rather than treating digital infrastructure as a necessary expense to be minimized, owners should approach it as an investment that generates returns through reduced operating expenses and increased revenue.
Douglas recommends that property owners start by conducting a comprehensive digital infrastructure and data audit to understand what they own, what they don’t own, where their data is going, and what opportunities exist for improvement. The audit process identifies redundant networks, unmanaged systems, and data silos that drain resources without delivering value.
From there, owners can prioritize improvements based on three factors: least out-of-pocket cost, quickest time to results, and highest financial value. By focusing on quick wins first, property teams can build momentum and demonstrate the value of a strategic approach to digital infrastructure.
“It’s tedious, but it’s straightforward,” Douglas says. “It’s not easy, but it’s also very doable. Other industries do this. Other industries have been doing this for a long time. Commercial real estate is slow. Sometimes people don’t like it when I say it, but the fact remains, they’re not an early adopter.”
The question for property owners is no longer whether to address digital infrastructure challenges, but how quickly they can move before the competitive disadvantage becomes insurmountable.
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.
