THE SMARTEST BUILDING IN DALLAS

WHEN BILL HOGAN came to Dallas to look for a regional office for his company, he was looking for the “smartest” building in Dallas. But for Hogan, the choice carried more weight than it might have for another executive. Hogan, after all. is with Houserman Incorporated, one of the nation’s leading office planning firms. “Where our own offices are located says a great deal to a client about our judgment and expertise,” explains Hogan. “If we say a building is smart, we have to prove we know what we are talking about.”

“Smart” buildings? Hogan may well know whereof he speaks but it’s likely most people don’t-including many of those now shopping around for office space.

What are “smart” buildings? There seems to be no single definition on which all can agree. To some a smart building seems to mean, if anything, elevators that talk to you about which floor you’re on and what the weather is like outside. Others would broaden that definition considerably to include computerized energy controls, a time-share available computer mainframe, a building-wide telecommunications “system, or all types of elaborate security systems. In short, “smart” is in the eye of the beholder.

However, Hogan believes that the first concern of any company seeking space is security. He suggests this includes security for employees within the building and on their way to the parking lot, as well as security for information and property maintained by a company in the building. Security precautions, in smart buildings, can range from special access systems requiring computer cards to more elaborate systems requiring voice prints. It can also mean the ability to visually monitor large areas on an around-the-clock basis, and to maintain unbuggable or “safe” phone lines.

From the tenant viewpoint, Hogan also wants to see buildings that can handle telecommunications. “More and more a company’s telephone line is its lifeline to the world. That’s where they do their selling and where they get their orders, where they access computer database information, and where they do their collecting,” explains Hogan. “Some companies need the sophistication for teleconferencing. They need to be able to put executives from around the world together in a conference at a moment’s notice. Other companies need to be able to handle large volumes of local calls; others large volumes of long distance.”

Hogan looks for a building-wide, highly flexible system that will enable tenants to expand use as their needs expand. He also wants to know if the system can be updated as new technology comes on line.

Then there is the matter of computer services. “Most companies need computer services, and it’s best that they be on site. However, the computer needs, both in hardware and software, will vary greatly from company to company and will change considerably for any company as time goes on,” says Hogan. Again, what is called for is an in-building system with the capacity to grow, to adapt as technology changes, and to provide a flexible service to tenants.

Of course, there are broader considerations. A truly smart building not only has talking elevators, it has : elevators that adjust to peak loads throughout the day. That means doors “know” when to stay open longer, and elevators know when to skip floors where buttons have been pushed because the elevator is already filled to capacity. A truly smart building also is energy efficient: it knows when it’s sunny or cloudy and it knows where the rays of the sun are warming the building at midday or in late afternoon and adjusts air conditioning accordingly. That not only adds to the comfort of the tenants but also lowers the cost of heating and cooling.

“Smart” buildings, it seems, are the wave of the future. The Wall Street Journal recently predicted that by 1990 there would be 2,600 of these intelligent structures around the country. There arc already dozens in the Dallas/Fort Worth area, but the intellectual skyscraper does have its skeptics. One is Ken Nelson, a Dallas telecommunications consultant. Nelson, whose clients are some of the city’s larger law and real estate firms, especially doubts the long-term viability of offering telecommunications on a building-wide basis. “Developers who have installed these building-wide systems are having real problems getting tenants to sign up.” says Nelson.

Why? “First, each business has different needs. One place where shared tenant services have worked is The Merchandise Mart in Chicago where most of the users are all in the same industry,” Nelson says. “But that is not the case in the average office building where there is little commonality among users.”

A second problem outlined by Nelson is that the choice of systems by the building may either prove incompatible with a system a new tenant already owns and has paid for, or the new tenant may prefer his own equipment to that provided by the system.

Nelson also objects to the cost of such systems. “Oddly enough, phone systems are one area where there is a reverse economy of scale. If you’re talking long-distance there is an economy of scale and lower rates, but the cost of a system actually increases as the number of phones in that system goes up,” Nelson says. “Now the answer the smart building people will give you is that that’s true but smaller systems offer fewer features, and a small user will get lots of bells and whistles for a few more dollars. Fine, but what if the user doesn’t need or want expensive bells and whistles?”



FINALLY, THERE IS the risk factor. “You pay rent to your building and if you are on a building-wide system a part of that rent goes for telecommunications. If your landlord doesn’t pay the phone bill your phone gets cut off.” Nelson considers this a key worry in today’s iffy real estate market. “If a developer owns his own system and goes broke, the building lender who foreclosed will keep the building operating but is under no obligation to keep the phones turned on.” As a recent example, Nelson cites Spectrum Centre while it was owned and managed by Criswell Development. “Their telecommunications company didn’t pay its bills so its users were given a time i to convert at some considerable and unplanned cost,” explains Nelson. “Besides,” he adds, “you’ll have to pay for a new phone number.”

To bolster his case. Nelson points to the recent dissolution of a joint venture to supply telecommunication services to Trammell Crow’s LTV Center. “AT&T and United Technologies |Communications Company] formed a joint venture called ShareTech to provide building wide systems. After a single year they announced they were calling it quits because of a “disappointing response.’”



Nelson and other skeptics suggest that most of the same problems will hold true for computing in smart buildings. “The biggest difference is that you have a serious compatibility problem in getting already-purchased computer systems to talk to each other or to the supplied mainframe,” he argues. “Then you still have the problems of risk and cost.” Still, Nelson agrees that while a company may be able to buy its own phone system, it may find buying a computer mainframe beyond its means.



DESPITE THESE CAVEATS. Hogan and other consultants on location believe “smart” buildings are here to stay. They grant some of Nelson’s points, but say that many firms will want the option to buy into a larger telecommunications system at some point. As more and more companies determine how to optimize their use of computers, the demand for computing power will increase, and with that demand will come a greater demand for smart building services.

And which building did Hogan find to be the smartest in Dallas? “I reaJly can’t say we found a smartest building. Certainly the LTV tower was impressive. Trammell Crow has done a very good job of providing systems. I was also impressed with the Info-Mart. But then the InfoMart wasn’t exactly designed as your average office building.”

Nelson also nominates the InfoMart and the LTV building as very bright buildings, although he feels the recent dissolution of ShareTech may affect LTV’s smart rating. “The whole concept of what a smart building is and what it can be is very uncertain right now. I think we would all be better off to wait for a while and then see if anyone has been very smart.”