RealComm/IBcon: The Good, the Bad, the Ugly

Las Vegas, the city of glitz and glamour, was recently the stage for the RealComm/IBcon conference, where the commercial real estate industry and smart building technology vendors gathered to showcase cutting-edge technologies and share their visions for the future.

As I ventured into this world of high stakes and lucrative deals, I discovered a whirlwind of insights, networking opportunities, and a few unexpected surprises. Join me as we delve into the good, the bad, and the downright ugly of RealComm/IBcon, uncovering secrets that will guide you into what is next at the intersection of smart building controls and commercial real estate.

The Good: An Illuminating Experience

RealComm/IBcon is a haven of knowledge and inspiration. From engaging speakers to informative breakout sessions, every moment was brimming with valuable takeaways. The real gem, however, was the exceptional quality of attendees, offering endless networking possibilities. The connections made here were worth their weight in gold, making the conference’s admission fee seem like a wise investment.

Well done to Jim Young, Howard Berger and Lisa Woods on another exceptional conference. Congratulations on your 25 th Realcomm/IBcon show, it did not disappoint.

Key Takeaway #1: Follow the Money

Spencer Levy, the charismatic keynote speaker from CBRE, took center stage and offered a compelling insight into the financial dynamics of commercial real estate. His advice? “Follow the money.” Understanding the impact of interest rates is essential in this industry. As rates fluctuate, leveraging strategies such as floating loans can either be a blessing or a curse. 

To avoid going down with the ship it is critical to understand just how bad it might be for some of the players in this space.

I shared this in the ControlTrends Smart Briefing, it is very important. A quick breakdown of how the big money players might be in a pickle they can’t get out of:

So it is all about interest rates, when interest rates are low like they have been for the last several decades, money is cheap and the real estate tycoons borrow lots of money and buy lots of buildings. But the majority of them use even more  leverage by using “floating loans” which is kind of like an adjustable rate mortgage for us when we buy a home. We can get a lower rate at the being of the loan and if rates stay the same or go down we are very very happy, if rates go up after the initial period say 5 years , then our mortgage payments go up, and we are not so happy.

Another way real estate people gain leverage is instead of paying principal on a monthly basis like we do on a home mortgage they just pay the interest on the loan until it comes due ( this is called a ballon type loan) and when the loan c0mes due they typically just roll the loan out in time, what you might call refinancing your mortgage. This allows huge amounts of cash flow and leverage for the reak estate owners, and they take the extra cash saved an buy more buildings… and this works great until……. Interest rates go up and ballon loan is due, which is what is happening to many of the big commercial real estate players.

The loans are coming due and they can’t afford to refinance the loans, and because this is happening to so many of them at the same time, their are not many buyers left and they cannot sell their buildings…. In other words they are f__ked.

On top of that with ESG being mandated they are going to have to invest in their buildings to make to comply with Government mandated sustainability initiatives, which should be good for us, they have no choice, but only if they have the money to pay us.

The good news is the money guys see interest rates coming back down near the end of 2024, and it will be happy days again, the bad news is that many of them have big loans due before rates come back down and might not make it until 2024.

If the banks like Credit Suisse, First Republic, Signature Bank can fail, then the customers they loan to can too, it is the season, and I personally believe it will get worse before it gets better.

The strategy here is don’t worry so much about growing your business, but about staying in business, which means watching the money.

My advice to you research your commercial estate clients and understand if they are on the verge of being taken down by the interst rate tsunami that is about to hit shore, so be careful and don’t go down with them.

Key Takeaway #2: Openness and Outcomes Prevail

Gone are the days of proprietary mindsets. The industry has undergone a remarkable transformation, with companies now embracing a genuine spirit of openness. No longer do they make vague claims about being open while subtly locking their customers into their own proprietary systems. System monogamy is a thing of the past. Owners seek the best solutions and a platform that welcomes open systems and prioritizes outcomes over technology.

Owners desire collaboration and unity on a single platform. The barriers between different domains are breaking down, and forward-thinking building owners are eager to partner with companies that bring together the finest elements.

Owners aim to invest in technology that delivers outcomes, rather than just the technology itself. The vendors that can integrate various components and ensure consistent outcomes will rise to the top.

It’s truly refreshing to witness vendors actively inviting competitors and other stakeholders to the table, laying the groundwork for a new era of collaboration.

Key Takeaway #3: ESG and the Air We Breathe

ESG (Environmental, Social, and Governance) initiatives have become a force to be reckoned with in the commercial real estate landscape. Building owners are now compelled to invest in sustainability measures, making indoor air quality a top concern.

This presents a golden opportunity for those in the industry to step up their game by enhancing their IAQ (Indoor Air Quality) sensor and filter offerings. Providing solid data to prove the air quality within buildings can give businesses a competitive edge in this evolving market.

All these needs are in the smart building and building automation controls providers wheel house. We can provide the sensors, the controls and the reporting!

The Bad: Vegas Blues

 While the conference itself was a delight, the location—Las Vegas—had its fair share of challenges. If you’re not a gambler or a 25-year-old party animal, the city might lose some of its appeal. With scorching temperatures and hefty expenses, it’s not the easiest place to navigate. The road construction frenzy made even a short Uber ride from the airport feel like a journey to the center of the Earth.

Although vendors loved the quality of the prospects at the show, I heard many of them complain about the  constant, on going breakout sessions, that left them yearning for more time with potential prospects. Several suggested that opening the trade show during pre-conference activities would be a acceptable solution for the future.

The Ugly: The Caesar’s Palace Saga

Alas, the crown jewel of disappointment during the conference was Caesar’s Palace itself. The grand façade masked a series of unfortunate incidents. Imagine arriving after a long day of flying, enduring a lengthy Uber ride, only to discover that your room isn’t ready

and that you’ll have to upgrade your stay for an exorbitant fee just to secure immediate accommodation. As if that weren’t enough, the audacity of charging a small fortune for a simple cup of coffee was enough to make even the most seasoned conference-goer cringe. And let’s not forget the airport transportation debacle—$85 to reach the airport when a neighboring hotel charged a fraction of that amount. Caesar’s Palace, a colossal letdown.

I commesurate with the team at RealComm, I know how disappointing the venue was for them, being their 25th anniversary they wanted everything to be perfect, and planned on Caesars making the event special.

My guess is,they, like most of us, will never go to Caesars again.

Navigating the Real Estate Rollercoaster

RealComm/IBcon was an enlightening journey into the realm of property and commercial real estate. From the valuable insights shared by industry leaders to the networking opportunities that opened doors to future collaborations, the conference left an indelible mark on attendees. The financial intricacies of interest rates, the newfound spirit of openness and collaboration, and the pressing need for sustainability all painted a vivid picture of the evolving landscape.

But not all was rosy. Las Vegas, with its scorching heat and inflated costs, proved to be a mixed bag for conference attendees. The tantalizing promise of the city’s glitz and glamour was overshadowed by the inconveniences of construction and exorbitant charges. And let’s not forget the cautionary tale of Caesar’s Palace—a once-glorious venue that failed to live up to its reputation, leaving a sour taste in the mouths of conference-goers.

As we bid farewell to RealComm/IBcon, armed with newfound knowledge and a clearer understanding of the industry’s challenges and opportunities, we embark on our own rollercoaster of opportunity.

Let us embrace the lessons learned, staying mindful of interest rates, embracing openness and collaboration, and capitalizing on the growing importance of sustainability.

Together, we can navigate the twists and turns of this dynamic industry and build a future that is as rewarding as it is prosperous.

So, fasten your seatbelts, fellow smart building control pros, and get ready for an exhilarating ride!


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