Whats NOT sexy about the Internet of Things – MultiFamily Version

Reprinted from IoT Today

Felicite Moorman, CEO of STRATIS

The Internet of Things (IoT) is not just a hot topic in the tech world. Its the sexiest topic across dozens of channels that have traditionally been perceived as relatively low-tech. As we painstakingly create new channel for the Internet of Things in MultiFamily and student housing, were constantly shocked by the IoT installation attempts we encounter. Anything that isn’t working well in residential home automation today is exacerbated dramatically when installed across thousands of units. It is simply not possible to shoehorn a system created for residential use, into the commercial residential unit and expect similar use cases or a reasonable rate of return on investment to the property owner or manager. All of the excitement and buzz can fall flat when the reality of most of todays MultiFamily solutions are understood.

Heres whats not sexy

smarthome-300x167Lackadaisical Attitudes About Security
Recently, an executive of an IoT startup for MultiFamily automation was quoted as saying, Maybe you could hack in, but what are you going to find out? That I keep my thermostat at 72 degrees? This lackadaisical attitude towards security is exactly what will harm IoT adoption, across all industries. Target became a victim of hacking through their HVAC system and lost 40 million credit card numbers as a result. This unfortunately endeavor cost them $162 million dollars. Security must be at the forefront of minds of developers and adopters of the IoT; the larger the installation, the larger the need. The powerful and important tools for property owners, such as no-tour credentials that eliminate the need to go to the door, or access to apartments for maintenance workers, emergencies, and lock-outs are also the most vulnerable to security flaws.

Security is complex from a technical perspective, move-in and maintenance processes, and enabling site audit capabilities. Flaws and vulnerabilities in these systems do not merely endanger single apartments, but entire portfolios.

The Wrong Access Hardware
Like residential IoT, access is a focal point for Multifamily, with a serious opportunity to increase convenience for owners and residents and equally importantly, see a rapid return on investment for property owners. Its also red ocean competitive. There is blood in the water, with every door lock manufacturer laser-targeting multifamily access.

In one recent installation, a property owner had experienced a majority of the challenges of access management and control issues, within months after installation, on a single site. The developer had installed electronic residential door locks with keypads for pin numbers and auto throw mechanics. In the short amount of time the locks were on the property, the building had settled slightly and the door locks had stopped working due to a slight rub against the strike plate and no override ability for dead batteries. The same locks reduced security significantly in an unanticipated way. Pin code sharing became commonplace, enabling non-residents to squat and requiring residents to frequently call for manual, at the door, pin code resets, due to poor decision making with regards to sharing. If security is a top concern, the unsanctioned sharing of credentials is a nightmare and access management and control software for residential door locks used in commercial residential spaces is non-existent.

Less related to security, but hugely important to convenience and tangential return on investment, the systems available sometimes require multiple software systems and dual training of staff. Were seeing sites using one software and hardware ecosystem for resident entry and another for common entry and amenities. None of these systems are integrated into the general property management systems already in place and used onsite and one required its own dedicated desktop computer in the leasing office.

The right door hardware will prioritize the security and safety of the resident and property, integrate into current property management systems and have a broad ecosystem of hardware options to minimize the use of multiple manufacturers systems. Best in class hardware will have additional devices, like thermostats and lighting easily integrated across that software for true smart performance. ‘

The Wrong HVAC Hardware
HVAC management and control also mimics residential modeling with regards to interest and opportunity for owners and residents to have meaningful returns on investment. For multifamily and campus community residents, the technology used is simply an integrated app and thermostat, but for the owner and property manager, those are just the beginning. The smarter the building, the greater the opportunity for the property to achieve widespread, overall savings. From wireless zone and flow control valves to billable grade energy monitoring, every product within the system is an opportunity to improve efficiencies and save energy.

The right thermostat for large installations will be one that shares data smartly enabling the benefits of the energy management and control system. There are sexy thermostats in the residential marketplace that do not allow data to be garnered and shared into an energy management system. This limits the ability of a property owner or manager to measure performance of the building, identify maintenance issues ahead of time, or reduce legal liabilities by providing heating audits. Were also seeing sexy thermostats walk off properties and with replacement costs as high as $300, thats a challenge.

The Wrong Automation System Play
An early warning sign of a residential solution being inappropriately shoehorned into commercial residential space is an automation solution that utilizes internet/Wi-Fi provided by the resident, or has independent systems and controllers for each unit. These systems are cost-prohibitive and normally do not have comprehensive interfaces for the property manager. Additionally, they are simply not designed around the robustness needed or use cases experienced in multifamily.

The most significant opportunity for property owners and managers to achieve return on investment of an IoT management and control system is through well-managed turns, when a unit experiences the move out, vacancy, repairs, showing, and subsequent move in. The right system will simplify and automate the turn process, and enable access control convenience and energy savings, non-stop operating when the resident leaves with their internet connection. Unfortunately, IoT systems are too often making turns more complicated, reducing HVAC control and requiring factory resets and constant access programming for these constantly changing scenarios.

Additionally, these systems dont solve for unique use cases of commercial residential, including leak sensing that may be more emergent to a property owner than resident, package delivery and handling, maintenance requests or laundry notifications. These and future features should be able to be installed and managed by the same management and maintenance staff that is already maintaining the property.

Poor Pricing Models
If the security is best in class, the connectivity plan makes sense, and the hardware is well integrated and right for multifamily, the solution often becomes cost-prohibitive to all but the largest budgets.

Last week a site with whom we met had received a quote for an energy-only management system that cost well over half a million dollars before adding smart thermostats. Thats before they were controlling energy! This was a low-income housing project that had neither the budget for a $1000 controller/hub per apartment nor the $250,000 on-site server and related support contracts.

More modern models charge residents traditional monthly residential security and home automation fees of $20 and more per month and require additional resident-purchased Wi-Fi to operate, thwarting widespread adoption. Alternatively, that monthly fee could be charged to the property owner or manager, making it equally cost-prohibitive.

Theres a right price model for IoT in MultiFamily. Its not free, though it may start a freemium type of attitude when it comes to rent control. And its not the traditional sky-high pricing that has left most of commercial residential technologically behind to date. It may even be a mix of these, but today the more options available to property owners, managers, and residents, the more likely a right price will be found ubiquitously.

The Takeaway
In short, slow down and start with these questions before you buy. Anything that increases security risks, is cost prohibitive, or creates consumer confusion will create inaction on their part both the consumer and enterprise buyer and reduce adoption at best, or worse, return on investment. And thats not sexy.


STRATIS®, a RealPage Company, creates smart apartments and intelligent buildings and is the only platform of its kind built for the complexities of multifamily and student housing. STRATIS is installed worldwide across the U.S., in Japan, the UK, EU, and Latin America. STRATIS now serves hospitality, retail, and small to mid-size commercial, as well. STRATIS is an Inc. Magazine “Fastest Growing Company in America” and a Top Ten Entrepreneur Magazine “Best Company in America.” STRATIS was recently acquired by RealPage to enable STRATIS Smart Building, a more connected lifestyle, and unleash hidden yield through new revenue streams.

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