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Advantages and Disadvantages of Smart Buildings in 2023

The future of housing will make use of buildings that are intelligent and way more efficient than nowadays. Smart technology will help to promote sustainability for the environment, society and also the economy.

You might have heard many positive opinions on these types of buildings and it seems like there are no downsides. But not every aspect of this solution might be beneficial for all stakeholders and it is important to point this out, in order to accelerate the growth of smart building technology.

In the following article, we will present to you the advantages and disadvantages of smart buildings that we think are relevant for 2023.

What are the advantages and disadvantages of smart buildings in 2023?

The advantages of smart buildings are the reduced costs related to maintenance and energy consumption, reduced amount of emissions emitted, increased productivity, more livable buildings, and increased resale value. On the other hand, there are also disadvantages, such as cyber security risks, initial installation costs, constant internet connection and the usability.

modern smart building

Advantages of Smart Buildings

  • Cost reduction
    • By utilizing real-time data and artificial intelligence, it is possible to reduce the amount of maintenance work and also fix issues faster. Algorithms are able to detect events that can cause damage to devices inside a building and shut them down or warn people before it becomes costly.
  • Reduced Energy Consumption
    • One advantage of smart buildings that is especially impactful for the environment, is the reduction of energy consumption. By using sensors and their data, it will be possible to make the usage of electricity, water and gas more efficient.
    • Occupancy management can measure, in which room the amount of people is very high and then adjust the climate, lighting and heating. Furthermore, with renewable energy such as photovoltaic panels or also heat pumps, it is possible to create cheap, green energy.
  • Increase in Productivity
    • One of the effects of the covid-19 crisis is that more and more people are working from home. For many this has many advantages, but for many it is also very hard. Smart buildings can help to make the workplace at home or in the office more enjoyable and productive by providing better lighting and climate conditions.
    • Another advantage of smart buildings is the usage of indoor navigation and room booking systems. People can easily book a meeting room and get the directions to it. Especially in big companies and for visitors this will be very helpful.
  • Health and Wellbeeing
    • By providing better air quality and temperature control, smart HVAC systems are an essential part of any smart building. There are also systems for elderly people and people with health issues, such as sensors that can detect if a person falls in their apartment. These can then send an alarm to a caretaker, which can enter the room thanks to smart access control.
  • Increase in the Building’s Value
    • As a result of the implementation of smart building technology, people are willing to pay more rent for these advantages in their apartments and buildings. Also, because the operating costs can be reduced, the profit margin of real estate will increase and thus will also increase the resale value.
green facade inside a building

Disadvantages of Smart Buildings

  • Cyber Security
    • By connecting nearly every device in a building with the internet, it is obvious that there is risk involved. Especially cheap IoT devices in particular are not equipped with the best security software and can potentially be hacked by some bad people.
    • In order to fight this problem, many countries and organizations are implementing regulations or laws to force companies to make their IoT devices more secure. 
  • Initial Installation Costs
    • The costs of installing smart technologies can run up to many tens or hundreds of thousands of Euros. This can be a large investment, in particular for smaller investors or companies. Of course, this also depends on the size of the building and the number of solutions installed.
    • Even though there has to be some investment in the beginning, within a few months or one to two years, there will be a positive return. According to JLL, it is one of the biggest myths that smart buildings are not a good investment decision
  • Internet connection
    • Another disadvantage of smart buildings is the need for constant internet connection. A reliable network needs to be established to get the full potential out of the intelligent technology.
  • Usability of Smart Technology for Tenants
    • Even though many children nowadays are growing up with technology, there is still a large number of people that are not that used to it. This is why one goal of smart technology and IoT has to be that it can easily be used by everyone without prior knowledge.

Examples of Smart Buildings Around the World

To provide you with a better understanding of the advantages and disadvantages of smart buildings, we are going to show some of the most intelligent buildings around the world that use these technologies.

These properties were able to significantly reduce operating costs, improve maintenance performance, minimise energy consumption, and increase wellbeing, as well as productivity.

The Edge Amsterdam

One of the smartest buildings in the world is „The Edge“, located in Amsterdam, the Netherlands. Around 28,000 sensors are installed within the property that are able to track everything from occupancy and lighting conditions to air quality and energy consumption.

Employees that work in the building can use a smartphone to control numerous functions such as booking a meeting room or a place in the on-site gym. Thanks to the intelligent energy management system that allows it to completely shut certain parts of the buildings, it is able to be very sustainable as well and produce more energy than it consumes.

The Salesforce Tower San Francisco

One of San Francisco‘s most iconic buildings that share the city skyline is the Salesforce Tower. Not only is it one of the tallest buildings in the US, but also one of the smartest.

A key aspect of this tower is the predictive maintenance system and the building management system that work together to improve the efficiency of the property. Additionally, a smart HVAC system has been installed to improve the indoor air-quality and make the climate conditions comfortable for each individual employee.

Another feature that is crucial for many smart buildings is security. In the case of the Salesforce Tower, a system checks who enters or leaves the building and collects a signature of the visitor.

Capital Tower Singapore

The Capital Tower in Singapore has continuously been upgraded with new smart technologies to improve efficiency and tenant comfort. It was built in 2000 and is one of the largest buildings in the country.

Some of its features include a smart HVAC system that can recover air to improve cooling throughout the property or smart lighting that provides sufficient levels of light when a person is detected.

In the car park of the Capital Tower, numerous sensors are installed to analyse two main issues. First, they check the carbon dioxide and monoxide levels in these spaces. This is to ensure that the air-quality is good and is not exceeding a harmful point. Second, there are occupancy sensors installed in each of the parking spots that can guide cars to an empty space in real time.

The Crystal London

One of the smartest buildings in the United Kingdom is „The Crystal“ in London. It is a conference center that opened in 2012 and achieved high sustainability rankings with LEED platinum and BREEAM outstanding.

To develop this green building, a combination of sustainable and smart technologies are needed that reduce energy consumption and carbon emissions.

A significant area of its roof uses solar panels to create energy for the property. In addition, The Crystal has a complex building management system (BMS) that controls energy consumption, water usage, HVAC, and lighting.


It is important to understand the advantages and disadvantages of smart buildings in 2021. By doing so we can solve the problems and improve this technology even further. 

Currently, the most important advantages are the reduction of costs and maintenance, the increase in sustainability for the environment, better living conditions, and an increase in the resale value. Disadvantages are the initial investment costs, cyber security, constant internet connection and the usability.

If you want to learn more about smart buildings and sustainable real estate, feel free to take a look at our other blog articles.

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