The Smart Building Promise: Separating Reality from Marketing

From Sreejesh Unnikrishnan , Associate Partner

The phrase "smart building" has become standard language across our industry. Walk into any design meeting or flip through a development brochure, and you'll find it: promising a building that thinks, learns, and adapts. One that anticipates tenant needs, slashes energy costs with AI, and flags a leaky valve before anyone notices.

It sounds incredible. And in a competitive market like New York City, where every Class A project needs to stand out, that promise is nearly irresistible. But often, the marketing materials don't tell you that the gap between the promise and the reality is often enormous.

I've spent my career on the delivery side of complex MEP systems -- living in that gap. My job starts when the bids come in, and I see what "smart" actually costs. More importantly, I see what happens when ambitious visions meet budget constraints and integration challenges.

Many "smart" systems end up as expensive silos that fail to deliver on their core promise: interoperability – while individual technologies are impressive, they often don't communicate with each other. The result is a building with cutting-edge components but limited intelligence.

The Hype Behind "Smart"

It's easy to understand the appeal. The market offers an array of technologies: IoT sensors, cloud dashboards, digital twins, and AI analytics. Each vendor promises a piece of the solution, but few projects have a holistic strategy tying these systems together.

In practice, smart building ambitions often get diluted as projects progress. Budgets tighten, scope shifts, and integration gets postponed or value-engineered out. Although these systems appear smart on paper, they often become overly complicated without delivering proportional value.

From a cost management perspective, the most overlooked expense isn't the technology itself but the lifecycle cost of integration. Commissioning, software maintenance, and user training—these rarely feature prominently in early capital budgets. Without them, the smartest hardware won't yield smart performance.

Where Smart Actually Delivers Value

When implemented strategically, smart systems do create measurable benefits. The most successful examples focus on clarity and function:

• Energy analytics that facility teams actually use to identify inefficiencies and drive real savings
• Predictive maintenance that reduces downtime and extends equipment life when supported by accurate data and disciplined operations
• Indoor air quality monitoring has become essential for occupant confidence, particularly post-pandemic
• User-centric automation that adjusts temperature or lighting based on occupancy, creating meaningful intersections between technology and experience

These aren't futuristic concepts. They're readily available and prove their value when designed and maintained with intent. But they all depend on one critical factor: integration. True intelligence only emerges when systems communicate seamlessly across disciplines.

The Cost and Integration Reality

From an MEP perspective, integration is where both risk and opportunity live. Owners often allocate significant funds for smart hardware while underestimating the engineering and commissioning effort needed to connect those systems.

Integration typically adds 10 to 15 percent to system costs. More importantly, the return depends on whether operators actually use the tools as intended. Without engagement, sophisticated dashboards become expensive screensavers.

Subscription and software support costs deserve equal attention. Many manufacturers operate on service models with recurring annual fees that can exceed the original installation cost over a ten-year life.

The takeaway is straightforward: smart building strategies must be scaled to match operational goals. A well-designed, moderately smart building that delivers reliable analytics is far more valuable than a fully digitalized facility that no one knows how to operate.

Bridging Ambition and Reality

The question isn't whether smart buildings are worth pursuing but how to make them genuinely effective. This requires early collaboration: owners, MEP engineers, IT specialists, and cost managers working from a shared definition of what "smart" success looks like.

The smartest investments align ambition with operational readiness. When owners define clear objectives – reducing energy waste, improving maintenance response, enhancing tenant experience – it becomes possible to quantify success and justify costs.

Smart buildings are no longer just about technology. They're about making technology serve people and purpose, ensuring that what's promised at design performs in reality.

A Call to Conversation

Our industry has mastered designing connected buildings. The next challenge is making them truly intelligent, delivering measurable outcomes rather than marketing headlines.

I'd welcome hearing from others who have navigated this gap; send me an email with your thoughts. Where have smart systems truly delivered value in your projects, and where have they fallen short? Let's move the conversation toward smarter, more grounded innovation.