Podcast
40
min read
James Dice

🎧 #165: Buyer Roundup: Tech trends in logistics, distribution, and industrial facilities

July 9, 2024
"What we’re doing is trying to create value mainly for our tenants through clean energy asset deployment. Our tenants want cleaner power and cheaper power and as a landlord, we are there to provide that in a turn-key service.”
—Charles Blaschke

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Episode 165 is a conversation with Drew DePriest from McKesson and Charles Blaschke from NorthPoint Development.

Summary

Welcome to our latest podcast series, Buyer Roundup! Each month, we’ll chat with Buyers from different verticals to check in on what’s new and what has them excited these days. Episode 165 features Drew DePriest from McKesson and Charles Blaschke from NorthPoint Development. This conversation explores how to make these smart buildings smarter and more sustainable. Enjoy!

Mentions and Links

  1. NexusCon (35:13)
  2. Nexus Podcast Episode 106 (1:57)
  3. McKesson (2:15)
  4. NorthPoint Development (2:45)

You can find Drew and Charles on LinkedIn.

Highlights

Introduction and Overview (0:50)

Intro to Drew (1:50)

Intro to Charles (2:40)

Main Goals (3:30)

Technology Trends (8:30)

Tech Roadmap (12:53)

Challenges Grab Bag (19:35)

Future Developments (31:27)

Looking forward to NexusCon (35:13)



Music credits: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S592515-16073.

Full transcript

Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!

James Dice: [00:00:00] Hey friends, if you like the Nexus podcast, the best way to continue the learning is to join our community. There are three ways to do that. First, you can join the Nexus Pro Membership. It's our global community of smart building professionals. We have monthly events, paywall, deep dive content, and a private chat room, and it's just 35 a month.

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The links are below in the show notes, and now let's go on to the podcast.

Hello, and welcome to the Nexus podcast. I'm your host, James Dice. We are exploring industrial logistics, uh, facilities [00:01:00] today. This is our second episode in our Buyer Roundup series. We're super excited about this series. Leading up to NexusCon in the fall, we are going industry by industry or vertical by vertical, talking about what smart buildings mean to all the different types of buildings in our industry.

I like to say there is no one smart buildings industry. We're applying technology to a bunch of different industries. And so we're going to talk about one of those industries today, which is what we might call big dumb boxes. Um, it's, it's something that just is a fact about these sorts of facilities. Um, There, there isn't a whole lot going on to them.

So the question that we're going to try to ask today is how do you make, uh, these big boxes more smart, more sustainable? And what does that even mean? Um, so I'm going to bring in the crew here for some self introductions. Drew, let me start with you. Drew's been on the podcast before. Uh, we'll put your other episode that you were on, uh, linked to that in the show notes.

It was a totally different topic, Drew, but why don't you go ahead and [00:02:00]reintroduce yourself, uh, for the audience? 

Drew DePriest: Sure. Thanks, James, for having me back. Apparently, the first one was, was decent enough that we've got enough for some return content. So I lead, uh, real estate operations technology at a company called McKesson.

We're a large healthcare distribution and logistics company. We effectively ensure that medical supplies, pharmaceuticals, your medicines, your drugs, they get from those manufacturers all the way to you, to your doctors, your hospitals, your pharmacies. It's, uh, it, it, it's a lot of, it's big work, but it's impactful and has a lot of purpose.

So I, uh, I love what I'm doing. 

James Dice: Uh, 

Charles, why don't you go 

next? 

Charles Blaschke: Yeah, great to be here. Uh, Charles Blaschke and I'm the VP of, uh, Clean Energy and Sustainability at Northpoint Development. We're a Kansas City based Class A industrial, uh, developer with the long term hold strategy. And, um, we are currently developing and have a portfolio and across the U [00:03:00] S that, uh, we're looking to make green and mean and smart, depending on how you define that and excited to dig in and kind of define what that means for us.

James Dice: All right, let's dive in. Let's first talk about if you could each kind of, let's do a little round robin here around, do you have a smart buildings program for these sites, these sorts of facilities? Um, I think in the case of North Point and McKesson, you have other types of buildings. We're kind of zeroing in on, on these logistics sort of facilities for these.

Buildings. Do you guys have a smart buildings program and what are the main goals of of that smart buildings program? Maybe Drew kick us off again. 

Drew DePriest: Sure. So we we do have a formal program the biggest goal right now is just to help us get visibility and to a wide number of sites and and try to get our information our data and our analytics is centralized as much as we can to reduce some overhead [00:04:00] and and really just kind of Bring some some scale value from a smaller number of Experts who can look at things running on the HVAC side and make some recommendations out to the sites.

So it, uh, it's by no means where, where I think we want it to go just yet. We've got a pretty ambitious roadmap of where we want to go over the next three to five years, but it's exciting, you know, it's, if we can help, help a distribution center run 1%, 5 percent more effective, that ensures they do their job of, of getting life saving medication delivered to You know, it even more efficiently and successfully.

So it's, uh, you know, ways to go, but it's, it's exciting work. 

James Dice: Okay, cool. Awesome. Drew, um, Charles, how about you guys? 

Charles Blaschke: Yeah. To the question, do we have a formal smart building program? I think the easy answer would be no, then saying smart building. But what we have are, is a formal program and plan on clean energy and [00:05:00]sustainability of which, you know, underneath that umbrella, that large umbrella that I, I oversee.

There's obviously a smart building component to that. I mean, our, what we're doing is, is really hyper focused on how do we create value, broadly speaking, across the stakeholders. And I think, you know, maybe we can get into it later, but who are the stakeholders in the typical kind of real estate transaction structure?

I think that is like fundamental to the industry understanding that they don't most of the time, especially when you get into smaller technology companies. providers. And I think, you know, from a sales perspective, which is what they're trying to do. And on the flip side, what we're trying to buy, um, without that basic understanding of who they're selling to and why, and who all the parties are kind of behind the curtain on our side, it makes it very complex.

I'd say that's, I'd say that's our biggest challenge when it comes to Everything we do, but particularly smart building technology, which like I said, there's a range. So what we're doing is trying to create value mainly for our [00:06:00]tenants right now, um, through clean energy asset deployment. So You know, we have 150 million square foot of flat, empty roof across the country that has, you know, fortune 500 tenants who most of the time would like to not only have power, but cleaner power and cheaper power.

And as the landlord, you know, we can, we are there to provide that to them in a turnkey service. So, you know, main, main program is ballasted rooftop solar. If there's a battery component, battery, you know, obviously as, as our tenants are kind of the heart of the economy. Um, there's, there's a lot of, uh, trucking.

So there could be chargers, EV chargers of different size and scale needs there. Um, and then we are looking at, like I said, more of the kind of what fall into the smart building around energy metering, uh, efficient HVAC, you know, I'll stop there, but you kind of said big, dumb boxes, very basic concrete boxes most of the time.

You know, I think. I know of out of our, our 350 or so buildings of one building that [00:07:00] has a BMS and control system of any type. So when you talk about what are we going to do and what do we, what can we even get off the site today? It's like nearly zero, you know, and with the triple net lease structure, um, what the tenant does in their building and what they put in is, is up to them.

It's not ours to see. It's not ours to touch. It's not ours to even monitor a lot of the time. So, um, that's where, yeah, we're really interested to hear what, what everyone has to say about what they're doing in similar facilities, because, um, you know, it's, it's, it's our kind of show. Um, and so we can monitor and look at some of that stuff.

Most of the time it's, it's the tenant. So, 

James Dice: okay. So given that context, let's, um, for those people that are listening to this and they maybe came from this world, we were talking about this before we hit record, the smart buildings world kind of comes from this world of very complex buildings, multiple layers of the tech stack, tons of different connected devices, um, a bunch of different, um, end users, different types of end users Use different [00:08:00] types of technologies to you in those portfolios.

Let's talk about what we're talking about here, which is let's go a little bit beyond the big dumb box. Like what can we say about these, this sort of asset class when it comes to the technology? Um, what types of devices do you guys have? Which of them drew you mentioned? There's some connected devices on the HVAC side.

Charles, you mentioned no connected, almost no connected device on the HVAC side. What do you guys have in these buildings and who are the users? Maybe just fill the audience in on, on, on that sort of thing. 

Drew DePriest: Sure. So I can, I can take a stab and bristling a little bit at hearing big dumb box repeatedly in, in our world, these are effectively just large warehouses that we try to operate.

In some regard, almost as critically as you would a data center. So the shell is big and dumb, but then all of the stuff inside it is incredibly smart and incredibly valuable. So a lot of what, you know, of [00:09:00] how do you, you ensure thermal comfort, so all of the people working inside the facility, um, can, can do their thing, can, can get orders processed and shipped out on time.

Um, a lot of these facilities, uh, for, for us, for others in the space, we're, we're, we're, Are leaning into automation. You know, you're going to see a lot more robots for lack of a better term, and those are giving off more heat as well. So I think just the basics of, of thermal comfort and keeping that consistent over time is what is, is important.

I mean, that is something that your tenants are going to expect, that they have a, a consistent, uh, Thermal envelope at all times, because if they're bringing in, you know, inventory and things that could flex with what temperature it goes up and down, that's, it's a revenue generating concept that you just have to keep eyes on.

I think everything else that goes into it, James, is going to be typical of something more in a critical infrastructure space. [00:10:00]

Charles Blaschke: Yeah, Drew, I think that's what I was 

saying. I think that 

kind of having a tenant or operator perspective is interesting because obviously, It's kind of like, well, we own it, but it's yours.

Go do whatever you want to it. But within there, you know, obviously inventory can be hundreds of millions of dollars. And it is a huge note in a critical supply chain for, for the tenant. So, and obviously there's like a, a scale of complexity that's inside the tenant. Space as part of the TI that either they do or we do.

And yeah, I think you're a great example. The cold state, cold, cold storage, which we have a few of, you know, obviously when, when Amazon and FedEx come in, you know, they put a lot of money into advanced robotics and machinery in there. That's very complex. And like you said, maybe the, literally the walls, the roof and the floor aren't, aren't too smart.

Um, but, but what happens in there is critical and there is some complexity. And I think from the landlord's perspective, we kind of don't, don't see that in, in Lexica. Can't measure it. I think one thing I think is a challenge, you know, [00:11:00] maybe it's for a later discussion is, you know, I come from a space of, yeah, complex buildings, very high energy usage, you know, a lot of people and very precise comfort.

One, one challenge we have, it's more on the kind of energy side, energy, you know, clean energy, um, development, solar batteries versus an old world is our, our tenants typically consume very, very, very little energy. You know, we're, we're talking kind of two to five kilowatt hours a square foot a year, which is just like.

Near zero. And that may be, you know, look at, uh, you know, there's like a long tail, uh, of that maybe of tenants with cold store, critical stuff, robotics, but I'd say the bulk of our tenants are, we all, I think 99 percent of our portfolio has motion sensor LEDs out of the gate. So kind of done there. Um, like I said, makeup, air fans, a lot of times no ACE, um, and they have racks and like some forklifts.[00:12:00]

I mean, we're talking, you know, you look at a million square foot building. I mean, it looks, it's way bigger than a football field, I guess. I don't know if you football field, that thing will consume two to three million kilowatt hours a year, which is like, you know, very small. So that's kind of our challenge on like making impact at scale and kind of helping the tenants save it.

So you have a million square foot roof, but you're going to fill that the solar that's going to fill it is like this little corner. And then, so what do you do with the other 10 megawatts of potential? It's just, there's nowhere to put it. 

James Dice: Makes a ton of sense. Um, so can we talk about a little bit about the, if you guys think about like, what are your ideas?

So we've kind of laid out like what, what's in these buildings, Drew, you said, you guys have a three to five year roadmap, maybe you start with like, what's, what are sort of the technologies that are sort of in that roadmap, maybe in a little bit more detail, and then Charles can sort of, sort of build on from there.

Drew DePriest: So I think it's, it's similar, James, conversations you and I've had in the past, things that I've [00:13:00] discussed with others in the, in the Nexus community of trying to get to a place where we can start pulling everything into an IDL. And I, I'm a huge fan of ontologies and just creating Um, creating a graph, uh, to the facilities graph is how we're, how I'm starting to talk about it more and more of just understanding, um, especially with, within supply chain, it's so fascinating to me because it's, it's a very purely mathematical equilibrium of how you balance, you know, watching someone sit down and plan out where, where you put a new distribution center, if it's Amazon or Walmart or McKesson, whoever, you know, there's a lot of just kind of balancing.

Supply and demand that goes into it. So I'd love to, to eventually try to bring that sort of approach into how we think about operating critical facilities. You know, if we get to a place beyond HVAC and in, [00:14:00] in my personal opinion, the IDL at its, at its deepest, most powerful goes well beyond a single system goes so far beyond HVAC.

Um, so I've, I've started breaking it down in terms of, can we start to stitch together with a relational graph, all of our OT systems? So it's their classic HVAC lighting, the things that I feel like generalizing the Nexus community, you know, typically thinks about when they hear smart building. Can we also bring in asset systems, which has been a little bit more common in the last couple of years.

But you know, if I, Throw a query at a single building. Can I get a list of every generator, every chiller, every rooftop, and I get all the specs on each piece of equipment and then pulling in asset information. You know, I want it to run time. I want it to warranty. I want it to refrigerate. That's super important for ESG partners internally.

And then can we also eventually start tapping into business systems? So how does, how does [00:15:00] the operation of the facility. Directly impact downstream and upstream business, because those are relationships that in the logistics game, those are everything. Um, you know, are we, am I totally sure what's going to come out of that kind of analysis?

Not yet, but that's kind of the fun of it is this whole thinking of supply chain as its own system unto itself. How can we start to model the role of the facility in that entire performance? Thanks. So it's, um, it's a lot to think about and to try to bite off, you know, we have, we haven't really talked about goals yet, but McKesson's got a 50 percent GHG reduction by 2032 off of a 2020 baseline.

So certainly, I mean, that's playing into our conversations with our distribution operations folks. As they try to kind of walk of a very important balance of how do we reduce GHG [00:16:00] emissions, which everyone generally in the corporate world is trying to do, while also maintaining reliability and uptime.

You know, so there's a, there's a trade off and similar to the data center hospital analogy, you know, there's some prioritization that starts to happen around, um, how much can we reduce on the energy side while also maintaining, you know, we have commitments, we have inventory that needs to be maintained at a certain level.

So, um, long winded answer to your question, but I think by and large, it's just the same things I feel like you have started prompting conversation with around the concept of the IDL. To me, it gets even more complex, but fascinating and valuable in the world of supply chain, like in an office. Great. You can improve employee experience.

You can reduce HVAC by shutting down floors. You know, when we start getting into revenue generating facilities, it's, it. It gets a lot more interesting. 

James Dice: Um, [00:17:00] I'm curious to hear, Charles, you, you sort of respond or an answer to that, because what I'm hearing from you guys, it sounds like is that, you know, Drew's connecting all of these connected devices into a graph.

It doesn't sound like you guys have a whole lot of connected devices that are on your side of the tenant landlord divide in your businesses. 

Charles Blaschke: Yeah. I was just going to say. Drew, do you know if you guys need any warehouse space anywhere in the country? Because it'd be great to have tenants that not only want to do that, are doing it.

And I know a lot of them are. Kind of a joke, but, um, you know, I think it's kind of that classic split incentive between landlord and tenant where it's, you know, unless, you know, if you guys come to us and say, Hey, we would like to connect all this stuff that's, some of it's yours, some of it's ours, so that we can do this big thing.

And we have this one facility and maybe ten across the country. I mean, that would be awesome. I think from our standpoint is kind of the if you just put like blinders on I'm the landlord triple net I leased it you do whatever you [00:18:00]want to do Tell me if you want me to do something else. We'll do it Um, it's hard for us and I think I see this and maybe if the tenant doesn't ask for it What can we do in my as in my shoes?

It's like hey, I want to i'd love to put battery there I'd love to do a microgrid i'd love to do solar everywhere But if the tenant just doesn't want to do it It's like well then that's not our job because we're here to serve the tenant And, you know, we can go and tell them, Hey, we can put solar 60 percent of your, um, energy comes from here.

We'll do an RTU efficiency upgrade. We can put sub meter and you can know down to the circuit, everything. And we'll fund it all as the landlord, cause it is our building in the end. And we'll charge you outside or part of the green lease, a small amount to recoup that over 30 years. Even if, you know, you might leave in 10, we're happy to like take that risk because it's our building.

And, and it's, it's not like tenants are clawing at us to do that. So I think it might be that. That old split incentive, you know, even if we can do it, but yeah, I think it's just because we don't have visibility into those systems that, that, you know, [00:19:00] Drew's, Drew's mentioning that have a lot of data and I agree, I think it's much more than just, let's save 18 percent of our energy.

It's, it's really rolls up to, to the ERP and, uh, in the supply chain and these facilities, because ultimately that's what these are, these are, these are heavy nodes and, uh, and revenue generating. Um, uh, supply chain. 

Drew DePriest: I like that. I'm going to have to borrow. I'll send you five bucks, Charles. Every time I use a heavy node in the, uh, in the enterprise supply chain, that's huge.

James Dice: Okay. So let's talk about what you guys are working on right now. We've talked a lot about the challenges we've sort of brought the challenges forward for, at least for, uh, the landlords in the room here. Um, let's talk about the projects that are hot on your mind. Um, Charles, why don't you go first? I know that you're, you're kind of hot on, on metering right now.

So why don't you, why don't you kick us off? 

Charles Blaschke: Yeah. Yeah. As I mentioned, kind of our, our first port of call is through our solar panels on our roofs, which makes sense every time we tell somebody that. Um, but from kind of a more smart building rollout, what, [00:20:00] what we've wanted to do and kind of the first thing we've been looking at is, is getting meters in our, in our buildings.

Um, and there's, there's a lot of reasons for that. Uh, I think probably most, most people that, that listen to this and follow it understand. The different types of users within a landlord organization like ourselves, our tenants that obviously may be needed or wanted for ESG scope one, two, three emissions reporting, we have LPs that require to ask for it.

We have equity partners that require it. We have. Um, asset managers that require it. And then it always kind of falls back to, to me and my team kind of clean energy, solar sustainability is, well, we actually kind of need to know the interval data for our tenants consumption to size and put the right type of solar battery system on it.

So there's all these use cases, but it does always kind of fall back to. And we had done kind of an internal exercise. You know, a lot of us come from the industry. We know a lot of the vendors and that was kind of first port of call and kind of struggled to find like the [00:21:00] easy button there. Uh, and that's, that's when we called in Nexus and their product to help us select the vendor that, that fit.

Fit our use case as a triple net industrial landlord with a large portfolio and probably 25 states. So, right. There's also code compliance. So there's differences there, different uses, different sizes. Like we have, we have buildings and parks where it'd be a few hundred thousand square feet with eight tenants, you know, 50, 000 square foot each.

Um, that maybe, literally we have tenants that consume less than a small two bedroom apartment. You know, they consume that little. So, you know, asking them to pay. You know, there's a pay issue, but again, we're trying to do this for ourselves here. There's the use case of sub metering for billing. There's, there's one, there's one utility meter for tenants, right?

Per square foot doesn't always work. Um, someone, someone's paying too much, someone's paying too little, even if it's only, uh, 19 a month, too much, too little in some cases. But, uh, so [00:22:00] we've, we've tried, we've, we've had a lot of challenges. Um, again, there, there's the use case and kind of the, the technical specs around how much do we need to meter?

Is it just the full building? Is it 15 minute interval or is it one minute interval? Is it? Well, we need to measure every panel in the building, not just the, not just the main meter. Is it we need to measure every circuit going out of each of the main panels? So we roughly know, do we need to know induces?

Do we not? Um, yeah, so it's, it's not been easy. Um, hence why we called in, called in James and the Nexus team. Because, you know, for us, again, you have to justify the cost in the end, right? And if it's for us to know a little bit about our tenants consumption patterns, well, we kind of know. And we can get their bills pretty easily.

So, there's this element of, well, if they're going to do, let's say, solar, well, we ask them and they give us the bills. Fine, it's monthly, but we know their consumption, KWH, we know their peak demand, and we roughly know their profile. So then, and then there's obviously Utility [00:23:00] API, Green Button. Texas smart meter.

There's ways that utilities can just give you the 15 minutes. So then the question is, do you go through this huge exercise and cost and potentially allocate it in different ways to then get like this incremental increase in value? Still a believer that we should do it and we need to find the right partner and solution, but, uh, it, it, it hasn't been an easy path.

And so that's kind of the first port of call for us on kind of the smart building and technology to get in there. Because if you think about it. Yeah, maybe we measure downstream and sub meters, some of our tenant stuff, but ultimately we're kind of monitoring our asset, the panels, the power, you know, therefore the building.

So it kind of gives us this, in my mind, this secondary asset health of the whole thing, just from a very interesting view of power only. So now we can know THD, we can know, you know, You know, power factor. We can know if stuff's happening kind of inside that space without having that space. Obviously there's InfoSec requirements, you know, I'm not sure McKesson would want us to know [00:24:00] everything that's going on in the facility.

Um, and, and so there is that kind of five or 10 percent that no utility bill data at all. So then how do you start to. Choose which ones to go and do it and how and why. So, 

James Dice: yeah, it's certainly something that like, as we've worked with you, you've been a little bit like exasperated by like, how do I move forward?

Which is totally understandable. I just wanted to clarify for everyone that's listening to this. No, Nexus Labs is not a consulting company. We're not trying to compete with all the awesome smart buildings consultants out there. We're simply helping. Owners like Charles kind of be the go between between him who has limited time to deal with vendors and the vast network of, we call it the vendor swamp sometimes, uh, just basically dealing with all of you lovely salespeople out there to get the information that, uh, we need to compare vendors and Charles needs to compare vendors to each other.

So, um, just wanted to clarify, clarify that we're not competitive to everyone that's in our community. Um, Drew, anything to, to add on, [00:25:00] on what technologies you're, you're working on right now? 

Drew DePriest: Mine is a little less flashy. Um, a lot of what we're looking at now is, is really just trying to shift mindset to, to more of kind of an enterprise IT focus.

So we're putting in things like firm process, SOPs that I feel like we're all familiar with. Um, digging deep into things like data governance, which, you know, didn't really know of until probably three years ago in a prior role. And then saw it spoken about at a couple of different conferences. It was like, Oh my God, this should be step one for anybody before we start talking about, you know, all this, um, the, the big, fancy, flashy, uh, learning type, type use cases.

James Dice: And for real quick, Drew, the people that haven't heard of that, like you hadn't, I don't know that I could define it either. What is, what is data governance? 

Drew DePriest: So it's a collection of, the simplest way I can put it, keeping your [00:26:00] data house in order, such that you optimize around a couple things. So, data quality, um, data accuracy, so of all the rows in your table, are they all complete?

Are they all accurate? So if you're saying 72 degrees, is that sensor actually 72 degrees? And then freshness is the other one, you know, ensuring that when you run a data pipeline every 24 hours, like it runs every 24 hours. And if it fails, someone is going in to, to go back and dig back through that because a lot of the dashboards that you'll see, and I know those get a bad rap, but my last three roles, dashboards have been the world.

I mean, that's how a lot of, a lot of FMs will operate. I've had some in my past who would say, here's the list of eight dashboards. I need to see every morning at 7. A. M. Go, go build them, go make it happen. And the second that your data freshness starts to fall out, they lose faith entirely, like they will stop using it and you're going to have a, have a bad [00:27:00] relationship.

So. It's in part, it's, it's how, how good is your data and then how well set up is it to be interoperable when you start to make that, that circle to, to pick up and join all these other systems of record with, with data, schema design, your, your primary keys, how well are those defined? And the most common that I've waxed philosophic about with many others in this community over the last, probably three, four years.

What is your globally unique building identifier? How do you define that? Um, is that consistent across every system? Are you using, um, you know, a different syntax? Because what we start to find, and I've seen this for the last five, six years, well before McKesson, is if I want to start analyzing my energy bills and compare that to BMS data and compare that to CMMS data, And possibly even, you know, uh, financial information.

If those [00:28:00] four systems each have a different way of defining what a building is, and it's, you know, it's not just an address in a city, in a state, or it's a five digit. You know, completely numeric string, you're, you're in trouble. Um, so we're going through a lot of those processes right now, just to get ready because, you know, there's the other, bless us, it's what, an hour in and no one has said the magic two letter, uh, buzz phrase of the century just yet.

Um, but, but it's coming and, you know, the way that we look at it, if we don't have that kind of baseline foundation of data governance, data literacy, you know, Data democratization. So the people that need access to the right data can, if that's not there, then it's going to make pushing up into whatever the promises of these, these more intense, intensive algorithms that are coming really trying hard not to say it, James.[00:29:00]

James Dice: Yeah. Yeah. Well, if you don't say it, then the transcript won't have the two magic letters in it. And then how much does this podcast get picked up by the AI? That's searching for content. There you go.

Charles Blaschke: I think one, one 

thing there, I mean, data governance, yeah, it's like an afterthought because you want to go get the data first, but really it should be front and center.

One of the things that kind of reminds me of that is, as you're saying, it's like, how do these vendors prove the accuracy of what they're doing, the time zero and onward? Like sometimes when you say the word commissioning heads, heads explode, or like, there's a lot of blank stares. Um, and, and to me, it's like, well, why would we do any of this if you can't prove to me today when it's done, that it's accurate, and then six months, one year, and any time after that, and then, and then I think the biggest thing with all of these things, okay, the price is this, whatever, 10 grand, 100 grand, million, for whatever you're buying, but there's a really big internal cost to the buyer.[00:30:00]

That no one, obviously, you know, as a vendor, you know, I've been on that site, which you don't know it for one, let alone, you don't put it in there. But like, that's one of the things we always try to understand is if this is kind of non core to let's say North Point and then almost non core to the energy and sustainability team of North Point, we can't throw manpower at making sure the data is accurate and that you're commissioning it and there's data governance, and we're backfilling because if I, we just don't have that, that, that capability in that time.

And we have a North Point labs as our data science team, like they can do it. But then again, like that's not their job either. And that's not their expertise. So what's the true cost as a buyer outside of the price that they say it's going to cost. And I think at times the different things that can be way more than what they're actually proposing for the hardware and software, to be honest.

James Dice: Um, let me, let me ask you guys a little big picture question. Well, really the landlord versus the owner occupier here. What is the, is there a changing expectation on owners and landlords of, [00:31:00] of these types of facilities right now? Like Charles, when you hear Drew talk and you're like, well, some of our tenants are like Drew, um, And thinking about the things that are, that Drew's thinking about, what, what would, what do you think as a, as a landlord, given that some of your tenants are not like Drew either, like, is the expectation changing in the industry or is it, is it same as it's always been kind of like, you know, what's in the tenant spaces is their concerns, not really our concern.

Charles Blaschke: Yeah. If it's non court, I mean, it is interesting. You can go to the, the, the company and they might only spend a hundred thousand dollars a year on energy. Um, and that maybe that's high for a lot of them. And so what I always say is if we save you 10 percent of 50 percent of that, we're saving you like five grand a year.

Like, even if it's kind of a small operation, I mean, five grand, of course, you pick it up if it's on the floor. But not if it's like, I have to learn what a PPA is and you're gonna shut down my operation. And [00:32:00] like, it's just like not gonna happen, but it's a quick yes or no. And so it is an interesting dynamic between the two.

And I think that to the question is, is, are the tenant expectations changing? Yes. Is it the top 10 percent of the market that's driving it? Yes. Is the bottom 70 percent changing at all? Not really. They know solar. They know it can save. And a lot of them are like, yeah, go do it. Like if it's going to save, I don't, you're going to pay for it.

Easy. Don't care. Kind of back to what I was saying before, like we really want to make sure our tenants save. Actually don't have to spend their time on it. Like you don't have to spend your time because if you have to spend time, it's, it's not worth it, probably either dollars and cents. And I think if you look at like that top 10%, they are pushing, you know, they want a building that's either LEED certified or has, you know, solar, solar ready, or those things do come through.

And I think they're really pushing it. And it's just when it becomes, when, when that aspect is non core to their business. Why should they care? And that's kind of the thing, like now, you know, [00:33:00] ESG, whatever that is, that's almost making it core to some companies for better or worse, sometimes there's meetings when, when there's six people in the call about solar and.

Their core business is failing. It's like, why are all of you here spending your shareholders time and money, but your core business is failing? Like, do you, are you a solar company or are you a, you know, an e commerce company that is caring about solar? So it is kind of funny sometimes, but I mean, you know, for us and most of our tenants are not, we don't have one building in our portfolio that has a chiller.

Like, we don't even have a chiller to monitor, right? So we don't even have a boiler. So what, what can a tenant expect in a lot of cases if there's not equipment? Ultimately, what I was saying earlier, it's like, there's just so, so little there. 

Drew DePriest: I'm thinking back to prior roles where, you know, separate from industrial, having to move 200 people into a temporary space for six months that we didn't know, and it was a short term lease [00:34:00] because we, we Didn't line up, leased it somewhere else for a new build out and having the job of how do we get corporate wifi into the short term space that someone else owns.

And I got to become really good friends with that particular building owners, IT staff. There were two people who were just like, yeah, cool. Let's go figure it out. Is it going to be complex and tricky? And. You know, your enterprise IT team is only going to allow us to put in one flavor of access point and it has to be in a certain position of the floor.

Let's go. It's just that. Yeah, you know, it's, it's life is, uh, life is not going to be easy. It's just where my first boss ever told me, he's like, if it were, if this job was easy, everyone would do it and we wouldn't be paying you to do it. So you could just go home. Like, okay. I try to keep that in mind, but you know, just the fact that it's.

Yeah. Yes, there's a contractual relationship between two companies, but just the willingness of everybody to say, let's go figure it out is [00:35:00] that's key. Totally. 

James Dice: Um, we're running out of time here. We gotta, we gotta close things off. I feel like we could, I could talk to you guys all day and continue to ask questions.

Um, As we sort of lead up to NexusCon in the fall, Charles, Drew, I know you're going to be there. The thing I want to ask you guys about is, well, first of all, I'm super excited that none of you knew each other and now you do, and you'll, you'll be able to meet in person, which is one of the most fun pieces of what we do at Nexus Labs is connecting, connecting people.

Um, but as you guys think about leading up to that, uh, what are you most excited about seeing and learning as we, you know, put together the agenda? For me, it's 

Drew DePriest: exactly what. You just alluded to, it's the, the IRL, the in real life version of the community, James, that you and the team have built over the last couple of years.

It's, it's a very, a colleague in my last role who used to describe things like Nexus and a few other events is, it's the only place I can go where people just get it, I don't have [00:36:00] to explain what I do, I don't, you know, I can use acronyms and they'll understand. It's, uh, you know, for me, it's all about the connection, the learning opportunities and just Putting a real life face to all these names that I've been learning from the last couple of years.

Charles Blaschke: Yeah, I'd say, I'd say the same. I like in person events generally, and they've been bad about getting out there post COVID. And after coming back to the US, um, and just had the head down and grinding and trying to make impact. And so, yeah, going, going to an event with the right kind of people. I think the way Vexcon's structured kind of no BS, like straight talk.

And I think that's a lot of value of what we've seen today. Like. Obviously, we know of similar landlords and tenants in spaces like this, but that's the big thing for us is how is it, how have others made this work, metering and industrial, let's say, RTU upgrades, solar, because we know it can be done and value can be created.

And I think in my role, specifically, what I need to do is find a [00:37:00] way to use these technologies that are, you know, pretty tried and true from like a hardware software standpoint to get them done. Into our buildings for the benefit of our tenants, landlords, equity partners, banks, environment, whatever that is.

Um, because I think there is a critical power crunch coming to the U S and globally that is going to cause major, major problems and already is, it's already, it's been popping this up for years, but I'll say it like AI is not slowing down the need for data centers. And when we're talking a hundred megawatt point loads.

Gigawatt campuses, we got major problems. And, and I think, mostly, you know, working on the clean energy supply side now and deploying those assets and investments, I think the only solution is efficiency and efficiency starts with data. And, and the smart building stuff, honestly. So I, I think you wake up in a year and we're, we're talking about very different things and then two years, very different things.

And I think [00:38:00] it's going to be, how can I get a little more capacity? There's value in having a building that's an empty space with a transformer in five megawatts ready to plug in. I think that's, I think that's going to drive a lot of stuff. 

Drew DePriest: Can I also plug really quick to James, what gets me excited for the conference is the number of.

What I would consider new to me voices. So it's, it's not, you know, as you scroll through the speaker list, you know, yeah, there are some familiar faces and folks that feel like if you've been in the space long enough, you start to, you know, you see folks that have been there around 20 years, like I have.

Um, but I think it's exciting to me personally, that anecdotally seems to be a majority of folks who have not historically been headline speakers at a smart building conference. And I want to go to every single panel that. A new voice is going to be on. 

James Dice: I'm glad you said that because our, our team, Shig shout out to our team, the amount of, [00:39:00] the amount of not scalable one on one outreach that we've been doing for this podcast is, uh, Uh, let's just say no one else does what, what we've been doing to make it, make it so that it's not the same voices saying the same stuff about what we plan on doing next year, we want to hear people talk about what they, what they have done and what they can share and have it be, yeah.

New, new folks. Well, thanks so much for coming on the show. Maybe we do this again sometime once there's a, you know, a couple more projects to talk about. So thank you.

Rosy Khalife: Okay, friends. Thank you for listening to this episode as we continue to grow our global community of change makers, we need your help for the next couple of months. We're challenging our listeners to share a link to their favorite Nexus episode on LinkedIn with a short post about why you listen. It would really, really help us out.

Make sure to tag us in the post so we can see it. Have a good one.

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"What we’re doing is trying to create value mainly for our tenants through clean energy asset deployment. Our tenants want cleaner power and cheaper power and as a landlord, we are there to provide that in a turn-key service.”
—Charles Blaschke

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Episode 165 is a conversation with Drew DePriest from McKesson and Charles Blaschke from NorthPoint Development.

Summary

Welcome to our latest podcast series, Buyer Roundup! Each month, we’ll chat with Buyers from different verticals to check in on what’s new and what has them excited these days. Episode 165 features Drew DePriest from McKesson and Charles Blaschke from NorthPoint Development. This conversation explores how to make these smart buildings smarter and more sustainable. Enjoy!

Mentions and Links

  1. NexusCon (35:13)
  2. Nexus Podcast Episode 106 (1:57)
  3. McKesson (2:15)
  4. NorthPoint Development (2:45)

You can find Drew and Charles on LinkedIn.

Highlights

Introduction and Overview (0:50)

Intro to Drew (1:50)

Intro to Charles (2:40)

Main Goals (3:30)

Technology Trends (8:30)

Tech Roadmap (12:53)

Challenges Grab Bag (19:35)

Future Developments (31:27)

Looking forward to NexusCon (35:13)



Music credits: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S592515-16073.

Full transcript

Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!

James Dice: [00:00:00] Hey friends, if you like the Nexus podcast, the best way to continue the learning is to join our community. There are three ways to do that. First, you can join the Nexus Pro Membership. It's our global community of smart building professionals. We have monthly events, paywall, deep dive content, and a private chat room, and it's just 35 a month.

Second, you can upgrade from the Pro Membership to our courses offering. It's headlined by our flagship course, the Smart Building Strategists. And we're building a catalog of courses taught by world leading experts on each topic under the smart buildings umbrella. Third and finally, our marketplace is how we connect leading vendors with buyers looking for their solutions.

The links are below in the show notes, and now let's go on to the podcast.

Hello, and welcome to the Nexus podcast. I'm your host, James Dice. We are exploring industrial logistics, uh, facilities [00:01:00] today. This is our second episode in our Buyer Roundup series. We're super excited about this series. Leading up to NexusCon in the fall, we are going industry by industry or vertical by vertical, talking about what smart buildings mean to all the different types of buildings in our industry.

I like to say there is no one smart buildings industry. We're applying technology to a bunch of different industries. And so we're going to talk about one of those industries today, which is what we might call big dumb boxes. Um, it's, it's something that just is a fact about these sorts of facilities. Um, There, there isn't a whole lot going on to them.

So the question that we're going to try to ask today is how do you make, uh, these big boxes more smart, more sustainable? And what does that even mean? Um, so I'm going to bring in the crew here for some self introductions. Drew, let me start with you. Drew's been on the podcast before. Uh, we'll put your other episode that you were on, uh, linked to that in the show notes.

It was a totally different topic, Drew, but why don't you go ahead and [00:02:00]reintroduce yourself, uh, for the audience? 

Drew DePriest: Sure. Thanks, James, for having me back. Apparently, the first one was, was decent enough that we've got enough for some return content. So I lead, uh, real estate operations technology at a company called McKesson.

We're a large healthcare distribution and logistics company. We effectively ensure that medical supplies, pharmaceuticals, your medicines, your drugs, they get from those manufacturers all the way to you, to your doctors, your hospitals, your pharmacies. It's, uh, it, it, it's a lot of, it's big work, but it's impactful and has a lot of purpose.

So I, uh, I love what I'm doing. 

James Dice: Uh, 

Charles, why don't you go 

next? 

Charles Blaschke: Yeah, great to be here. Uh, Charles Blaschke and I'm the VP of, uh, Clean Energy and Sustainability at Northpoint Development. We're a Kansas City based Class A industrial, uh, developer with the long term hold strategy. And, um, we are currently developing and have a portfolio and across the U [00:03:00] S that, uh, we're looking to make green and mean and smart, depending on how you define that and excited to dig in and kind of define what that means for us.

James Dice: All right, let's dive in. Let's first talk about if you could each kind of, let's do a little round robin here around, do you have a smart buildings program for these sites, these sorts of facilities? Um, I think in the case of North Point and McKesson, you have other types of buildings. We're kind of zeroing in on, on these logistics sort of facilities for these.

Buildings. Do you guys have a smart buildings program and what are the main goals of of that smart buildings program? Maybe Drew kick us off again. 

Drew DePriest: Sure. So we we do have a formal program the biggest goal right now is just to help us get visibility and to a wide number of sites and and try to get our information our data and our analytics is centralized as much as we can to reduce some overhead [00:04:00] and and really just kind of Bring some some scale value from a smaller number of Experts who can look at things running on the HVAC side and make some recommendations out to the sites.

So it, uh, it's by no means where, where I think we want it to go just yet. We've got a pretty ambitious roadmap of where we want to go over the next three to five years, but it's exciting, you know, it's, if we can help, help a distribution center run 1%, 5 percent more effective, that ensures they do their job of, of getting life saving medication delivered to You know, it even more efficiently and successfully.

So it's, uh, you know, ways to go, but it's, it's exciting work. 

James Dice: Okay, cool. Awesome. Drew, um, Charles, how about you guys? 

Charles Blaschke: Yeah. To the question, do we have a formal smart building program? I think the easy answer would be no, then saying smart building. But what we have are, is a formal program and plan on clean energy and [00:05:00]sustainability of which, you know, underneath that umbrella, that large umbrella that I, I oversee.

There's obviously a smart building component to that. I mean, our, what we're doing is, is really hyper focused on how do we create value, broadly speaking, across the stakeholders. And I think, you know, maybe we can get into it later, but who are the stakeholders in the typical kind of real estate transaction structure?

I think that is like fundamental to the industry understanding that they don't most of the time, especially when you get into smaller technology companies. providers. And I think, you know, from a sales perspective, which is what they're trying to do. And on the flip side, what we're trying to buy, um, without that basic understanding of who they're selling to and why, and who all the parties are kind of behind the curtain on our side, it makes it very complex.

I'd say that's, I'd say that's our biggest challenge when it comes to Everything we do, but particularly smart building technology, which like I said, there's a range. So what we're doing is trying to create value mainly for our [00:06:00]tenants right now, um, through clean energy asset deployment. So You know, we have 150 million square foot of flat, empty roof across the country that has, you know, fortune 500 tenants who most of the time would like to not only have power, but cleaner power and cheaper power.

And as the landlord, you know, we can, we are there to provide that to them in a turnkey service. So, you know, main, main program is ballasted rooftop solar. If there's a battery component, battery, you know, obviously as, as our tenants are kind of the heart of the economy. Um, there's, there's a lot of, uh, trucking.

So there could be chargers, EV chargers of different size and scale needs there. Um, and then we are looking at, like I said, more of the kind of what fall into the smart building around energy metering, uh, efficient HVAC, you know, I'll stop there, but you kind of said big, dumb boxes, very basic concrete boxes most of the time.

You know, I think. I know of out of our, our 350 or so buildings of one building that [00:07:00] has a BMS and control system of any type. So when you talk about what are we going to do and what do we, what can we even get off the site today? It's like nearly zero, you know, and with the triple net lease structure, um, what the tenant does in their building and what they put in is, is up to them.

It's not ours to see. It's not ours to touch. It's not ours to even monitor a lot of the time. So, um, that's where, yeah, we're really interested to hear what, what everyone has to say about what they're doing in similar facilities, because, um, you know, it's, it's, it's our kind of show. Um, and so we can monitor and look at some of that stuff.

Most of the time it's, it's the tenant. So, 

James Dice: okay. So given that context, let's, um, for those people that are listening to this and they maybe came from this world, we were talking about this before we hit record, the smart buildings world kind of comes from this world of very complex buildings, multiple layers of the tech stack, tons of different connected devices, um, a bunch of different, um, end users, different types of end users Use different [00:08:00] types of technologies to you in those portfolios.

Let's talk about what we're talking about here, which is let's go a little bit beyond the big dumb box. Like what can we say about these, this sort of asset class when it comes to the technology? Um, what types of devices do you guys have? Which of them drew you mentioned? There's some connected devices on the HVAC side.

Charles, you mentioned no connected, almost no connected device on the HVAC side. What do you guys have in these buildings and who are the users? Maybe just fill the audience in on, on, on that sort of thing. 

Drew DePriest: Sure. So I can, I can take a stab and bristling a little bit at hearing big dumb box repeatedly in, in our world, these are effectively just large warehouses that we try to operate.

In some regard, almost as critically as you would a data center. So the shell is big and dumb, but then all of the stuff inside it is incredibly smart and incredibly valuable. So a lot of what, you know, of [00:09:00] how do you, you ensure thermal comfort, so all of the people working inside the facility, um, can, can do their thing, can, can get orders processed and shipped out on time.

Um, a lot of these facilities, uh, for, for us, for others in the space, we're, we're, we're, Are leaning into automation. You know, you're going to see a lot more robots for lack of a better term, and those are giving off more heat as well. So I think just the basics of, of thermal comfort and keeping that consistent over time is what is, is important.

I mean, that is something that your tenants are going to expect, that they have a, a consistent, uh, Thermal envelope at all times, because if they're bringing in, you know, inventory and things that could flex with what temperature it goes up and down, that's, it's a revenue generating concept that you just have to keep eyes on.

I think everything else that goes into it, James, is going to be typical of something more in a critical infrastructure space. [00:10:00]

Charles Blaschke: Yeah, Drew, I think that's what I was 

saying. I think that 

kind of having a tenant or operator perspective is interesting because obviously, It's kind of like, well, we own it, but it's yours.

Go do whatever you want to it. But within there, you know, obviously inventory can be hundreds of millions of dollars. And it is a huge note in a critical supply chain for, for the tenant. So, and obviously there's like a, a scale of complexity that's inside the tenant. Space as part of the TI that either they do or we do.

And yeah, I think you're a great example. The cold state, cold, cold storage, which we have a few of, you know, obviously when, when Amazon and FedEx come in, you know, they put a lot of money into advanced robotics and machinery in there. That's very complex. And like you said, maybe the, literally the walls, the roof and the floor aren't, aren't too smart.

Um, but, but what happens in there is critical and there is some complexity. And I think from the landlord's perspective, we kind of don't, don't see that in, in Lexica. Can't measure it. I think one thing I think is a challenge, you know, [00:11:00] maybe it's for a later discussion is, you know, I come from a space of, yeah, complex buildings, very high energy usage, you know, a lot of people and very precise comfort.

One, one challenge we have, it's more on the kind of energy side, energy, you know, clean energy, um, development, solar batteries versus an old world is our, our tenants typically consume very, very, very little energy. You know, we're, we're talking kind of two to five kilowatt hours a square foot a year, which is just like.

Near zero. And that may be, you know, look at, uh, you know, there's like a long tail, uh, of that maybe of tenants with cold store, critical stuff, robotics, but I'd say the bulk of our tenants are, we all, I think 99 percent of our portfolio has motion sensor LEDs out of the gate. So kind of done there. Um, like I said, makeup, air fans, a lot of times no ACE, um, and they have racks and like some forklifts.[00:12:00]

I mean, we're talking, you know, you look at a million square foot building. I mean, it looks, it's way bigger than a football field, I guess. I don't know if you football field, that thing will consume two to three million kilowatt hours a year, which is like, you know, very small. So that's kind of our challenge on like making impact at scale and kind of helping the tenants save it.

So you have a million square foot roof, but you're going to fill that the solar that's going to fill it is like this little corner. And then, so what do you do with the other 10 megawatts of potential? It's just, there's nowhere to put it. 

James Dice: Makes a ton of sense. Um, so can we talk about a little bit about the, if you guys think about like, what are your ideas?

So we've kind of laid out like what, what's in these buildings, Drew, you said, you guys have a three to five year roadmap, maybe you start with like, what's, what are sort of the technologies that are sort of in that roadmap, maybe in a little bit more detail, and then Charles can sort of, sort of build on from there.

Drew DePriest: So I think it's, it's similar, James, conversations you and I've had in the past, things that I've [00:13:00] discussed with others in the, in the Nexus community of trying to get to a place where we can start pulling everything into an IDL. And I, I'm a huge fan of ontologies and just creating Um, creating a graph, uh, to the facilities graph is how we're, how I'm starting to talk about it more and more of just understanding, um, especially with, within supply chain, it's so fascinating to me because it's, it's a very purely mathematical equilibrium of how you balance, you know, watching someone sit down and plan out where, where you put a new distribution center, if it's Amazon or Walmart or McKesson, whoever, you know, there's a lot of just kind of balancing.

Supply and demand that goes into it. So I'd love to, to eventually try to bring that sort of approach into how we think about operating critical facilities. You know, if we get to a place beyond HVAC and in, [00:14:00] in my personal opinion, the IDL at its, at its deepest, most powerful goes well beyond a single system goes so far beyond HVAC.

Um, so I've, I've started breaking it down in terms of, can we start to stitch together with a relational graph, all of our OT systems? So it's their classic HVAC lighting, the things that I feel like generalizing the Nexus community, you know, typically thinks about when they hear smart building. Can we also bring in asset systems, which has been a little bit more common in the last couple of years.

But you know, if I, Throw a query at a single building. Can I get a list of every generator, every chiller, every rooftop, and I get all the specs on each piece of equipment and then pulling in asset information. You know, I want it to run time. I want it to warranty. I want it to refrigerate. That's super important for ESG partners internally.

And then can we also eventually start tapping into business systems? So how does, how does [00:15:00] the operation of the facility. Directly impact downstream and upstream business, because those are relationships that in the logistics game, those are everything. Um, you know, are we, am I totally sure what's going to come out of that kind of analysis?

Not yet, but that's kind of the fun of it is this whole thinking of supply chain as its own system unto itself. How can we start to model the role of the facility in that entire performance? Thanks. So it's, um, it's a lot to think about and to try to bite off, you know, we have, we haven't really talked about goals yet, but McKesson's got a 50 percent GHG reduction by 2032 off of a 2020 baseline.

So certainly, I mean, that's playing into our conversations with our distribution operations folks. As they try to kind of walk of a very important balance of how do we reduce GHG [00:16:00] emissions, which everyone generally in the corporate world is trying to do, while also maintaining reliability and uptime.

You know, so there's a, there's a trade off and similar to the data center hospital analogy, you know, there's some prioritization that starts to happen around, um, how much can we reduce on the energy side while also maintaining, you know, we have commitments, we have inventory that needs to be maintained at a certain level.

So, um, long winded answer to your question, but I think by and large, it's just the same things I feel like you have started prompting conversation with around the concept of the IDL. To me, it gets even more complex, but fascinating and valuable in the world of supply chain, like in an office. Great. You can improve employee experience.

You can reduce HVAC by shutting down floors. You know, when we start getting into revenue generating facilities, it's, it. It gets a lot more interesting. 

James Dice: Um, [00:17:00] I'm curious to hear, Charles, you, you sort of respond or an answer to that, because what I'm hearing from you guys, it sounds like is that, you know, Drew's connecting all of these connected devices into a graph.

It doesn't sound like you guys have a whole lot of connected devices that are on your side of the tenant landlord divide in your businesses. 

Charles Blaschke: Yeah. I was just going to say. Drew, do you know if you guys need any warehouse space anywhere in the country? Because it'd be great to have tenants that not only want to do that, are doing it.

And I know a lot of them are. Kind of a joke, but, um, you know, I think it's kind of that classic split incentive between landlord and tenant where it's, you know, unless, you know, if you guys come to us and say, Hey, we would like to connect all this stuff that's, some of it's yours, some of it's ours, so that we can do this big thing.

And we have this one facility and maybe ten across the country. I mean, that would be awesome. I think from our standpoint is kind of the if you just put like blinders on I'm the landlord triple net I leased it you do whatever you [00:18:00]want to do Tell me if you want me to do something else. We'll do it Um, it's hard for us and I think I see this and maybe if the tenant doesn't ask for it What can we do in my as in my shoes?

It's like hey, I want to i'd love to put battery there I'd love to do a microgrid i'd love to do solar everywhere But if the tenant just doesn't want to do it It's like well then that's not our job because we're here to serve the tenant And, you know, we can go and tell them, Hey, we can put solar 60 percent of your, um, energy comes from here.

We'll do an RTU efficiency upgrade. We can put sub meter and you can know down to the circuit, everything. And we'll fund it all as the landlord, cause it is our building in the end. And we'll charge you outside or part of the green lease, a small amount to recoup that over 30 years. Even if, you know, you might leave in 10, we're happy to like take that risk because it's our building.

And, and it's, it's not like tenants are clawing at us to do that. So I think it might be that. That old split incentive, you know, even if we can do it, but yeah, I think it's just because we don't have visibility into those systems that, that, you know, [00:19:00] Drew's, Drew's mentioning that have a lot of data and I agree, I think it's much more than just, let's save 18 percent of our energy.

It's, it's really rolls up to, to the ERP and, uh, in the supply chain and these facilities, because ultimately that's what these are, these are, these are heavy nodes and, uh, and revenue generating. Um, uh, supply chain. 

Drew DePriest: I like that. I'm going to have to borrow. I'll send you five bucks, Charles. Every time I use a heavy node in the, uh, in the enterprise supply chain, that's huge.

James Dice: Okay. So let's talk about what you guys are working on right now. We've talked a lot about the challenges we've sort of brought the challenges forward for, at least for, uh, the landlords in the room here. Um, let's talk about the projects that are hot on your mind. Um, Charles, why don't you go first? I know that you're, you're kind of hot on, on metering right now.

So why don't you, why don't you kick us off? 

Charles Blaschke: Yeah. Yeah. As I mentioned, kind of our, our first port of call is through our solar panels on our roofs, which makes sense every time we tell somebody that. Um, but from kind of a more smart building rollout, what, [00:20:00] what we've wanted to do and kind of the first thing we've been looking at is, is getting meters in our, in our buildings.

Um, and there's, there's a lot of reasons for that. Uh, I think probably most, most people that, that listen to this and follow it understand. The different types of users within a landlord organization like ourselves, our tenants that obviously may be needed or wanted for ESG scope one, two, three emissions reporting, we have LPs that require to ask for it.

We have equity partners that require it. We have. Um, asset managers that require it. And then it always kind of falls back to, to me and my team kind of clean energy, solar sustainability is, well, we actually kind of need to know the interval data for our tenants consumption to size and put the right type of solar battery system on it.

So there's all these use cases, but it does always kind of fall back to. And we had done kind of an internal exercise. You know, a lot of us come from the industry. We know a lot of the vendors and that was kind of first port of call and kind of struggled to find like the [00:21:00] easy button there. Uh, and that's, that's when we called in Nexus and their product to help us select the vendor that, that fit.

Fit our use case as a triple net industrial landlord with a large portfolio and probably 25 states. So, right. There's also code compliance. So there's differences there, different uses, different sizes. Like we have, we have buildings and parks where it'd be a few hundred thousand square feet with eight tenants, you know, 50, 000 square foot each.

Um, that maybe, literally we have tenants that consume less than a small two bedroom apartment. You know, they consume that little. So, you know, asking them to pay. You know, there's a pay issue, but again, we're trying to do this for ourselves here. There's the use case of sub metering for billing. There's, there's one, there's one utility meter for tenants, right?

Per square foot doesn't always work. Um, someone, someone's paying too much, someone's paying too little, even if it's only, uh, 19 a month, too much, too little in some cases. But, uh, so [00:22:00] we've, we've tried, we've, we've had a lot of challenges. Um, again, there, there's the use case and kind of the, the technical specs around how much do we need to meter?

Is it just the full building? Is it 15 minute interval or is it one minute interval? Is it? Well, we need to measure every panel in the building, not just the, not just the main meter. Is it we need to measure every circuit going out of each of the main panels? So we roughly know, do we need to know induces?

Do we not? Um, yeah, so it's, it's not been easy. Um, hence why we called in, called in James and the Nexus team. Because, you know, for us, again, you have to justify the cost in the end, right? And if it's for us to know a little bit about our tenants consumption patterns, well, we kind of know. And we can get their bills pretty easily.

So, there's this element of, well, if they're going to do, let's say, solar, well, we ask them and they give us the bills. Fine, it's monthly, but we know their consumption, KWH, we know their peak demand, and we roughly know their profile. So then, and then there's obviously Utility [00:23:00] API, Green Button. Texas smart meter.

There's ways that utilities can just give you the 15 minutes. So then the question is, do you go through this huge exercise and cost and potentially allocate it in different ways to then get like this incremental increase in value? Still a believer that we should do it and we need to find the right partner and solution, but, uh, it, it, it hasn't been an easy path.

And so that's kind of the first port of call for us on kind of the smart building and technology to get in there. Because if you think about it. Yeah, maybe we measure downstream and sub meters, some of our tenant stuff, but ultimately we're kind of monitoring our asset, the panels, the power, you know, therefore the building.

So it kind of gives us this, in my mind, this secondary asset health of the whole thing, just from a very interesting view of power only. So now we can know THD, we can know, you know, You know, power factor. We can know if stuff's happening kind of inside that space without having that space. Obviously there's InfoSec requirements, you know, I'm not sure McKesson would want us to know [00:24:00] everything that's going on in the facility.

Um, and, and so there is that kind of five or 10 percent that no utility bill data at all. So then how do you start to. Choose which ones to go and do it and how and why. So, 

James Dice: yeah, it's certainly something that like, as we've worked with you, you've been a little bit like exasperated by like, how do I move forward?

Which is totally understandable. I just wanted to clarify for everyone that's listening to this. No, Nexus Labs is not a consulting company. We're not trying to compete with all the awesome smart buildings consultants out there. We're simply helping. Owners like Charles kind of be the go between between him who has limited time to deal with vendors and the vast network of, we call it the vendor swamp sometimes, uh, just basically dealing with all of you lovely salespeople out there to get the information that, uh, we need to compare vendors and Charles needs to compare vendors to each other.

So, um, just wanted to clarify, clarify that we're not competitive to everyone that's in our community. Um, Drew, anything to, to add on, [00:25:00] on what technologies you're, you're working on right now? 

Drew DePriest: Mine is a little less flashy. Um, a lot of what we're looking at now is, is really just trying to shift mindset to, to more of kind of an enterprise IT focus.

So we're putting in things like firm process, SOPs that I feel like we're all familiar with. Um, digging deep into things like data governance, which, you know, didn't really know of until probably three years ago in a prior role. And then saw it spoken about at a couple of different conferences. It was like, Oh my God, this should be step one for anybody before we start talking about, you know, all this, um, the, the big, fancy, flashy, uh, learning type, type use cases.

James Dice: And for real quick, Drew, the people that haven't heard of that, like you hadn't, I don't know that I could define it either. What is, what is data governance? 

Drew DePriest: So it's a collection of, the simplest way I can put it, keeping your [00:26:00] data house in order, such that you optimize around a couple things. So, data quality, um, data accuracy, so of all the rows in your table, are they all complete?

Are they all accurate? So if you're saying 72 degrees, is that sensor actually 72 degrees? And then freshness is the other one, you know, ensuring that when you run a data pipeline every 24 hours, like it runs every 24 hours. And if it fails, someone is going in to, to go back and dig back through that because a lot of the dashboards that you'll see, and I know those get a bad rap, but my last three roles, dashboards have been the world.

I mean, that's how a lot of, a lot of FMs will operate. I've had some in my past who would say, here's the list of eight dashboards. I need to see every morning at 7. A. M. Go, go build them, go make it happen. And the second that your data freshness starts to fall out, they lose faith entirely, like they will stop using it and you're going to have a, have a bad [00:27:00] relationship.

So. It's in part, it's, it's how, how good is your data and then how well set up is it to be interoperable when you start to make that, that circle to, to pick up and join all these other systems of record with, with data, schema design, your, your primary keys, how well are those defined? And the most common that I've waxed philosophic about with many others in this community over the last, probably three, four years.

What is your globally unique building identifier? How do you define that? Um, is that consistent across every system? Are you using, um, you know, a different syntax? Because what we start to find, and I've seen this for the last five, six years, well before McKesson, is if I want to start analyzing my energy bills and compare that to BMS data and compare that to CMMS data, And possibly even, you know, uh, financial information.

If those [00:28:00] four systems each have a different way of defining what a building is, and it's, you know, it's not just an address in a city, in a state, or it's a five digit. You know, completely numeric string, you're, you're in trouble. Um, so we're going through a lot of those processes right now, just to get ready because, you know, there's the other, bless us, it's what, an hour in and no one has said the magic two letter, uh, buzz phrase of the century just yet.

Um, but, but it's coming and, you know, the way that we look at it, if we don't have that kind of baseline foundation of data governance, data literacy, you know, Data democratization. So the people that need access to the right data can, if that's not there, then it's going to make pushing up into whatever the promises of these, these more intense, intensive algorithms that are coming really trying hard not to say it, James.[00:29:00]

James Dice: Yeah. Yeah. Well, if you don't say it, then the transcript won't have the two magic letters in it. And then how much does this podcast get picked up by the AI? That's searching for content. There you go.

Charles Blaschke: I think one, one 

thing there, I mean, data governance, yeah, it's like an afterthought because you want to go get the data first, but really it should be front and center.

One of the things that kind of reminds me of that is, as you're saying, it's like, how do these vendors prove the accuracy of what they're doing, the time zero and onward? Like sometimes when you say the word commissioning heads, heads explode, or like, there's a lot of blank stares. Um, and, and to me, it's like, well, why would we do any of this if you can't prove to me today when it's done, that it's accurate, and then six months, one year, and any time after that, and then, and then I think the biggest thing with all of these things, okay, the price is this, whatever, 10 grand, 100 grand, million, for whatever you're buying, but there's a really big internal cost to the buyer.[00:30:00]

That no one, obviously, you know, as a vendor, you know, I've been on that site, which you don't know it for one, let alone, you don't put it in there. But like, that's one of the things we always try to understand is if this is kind of non core to let's say North Point and then almost non core to the energy and sustainability team of North Point, we can't throw manpower at making sure the data is accurate and that you're commissioning it and there's data governance, and we're backfilling because if I, we just don't have that, that, that capability in that time.

And we have a North Point labs as our data science team, like they can do it. But then again, like that's not their job either. And that's not their expertise. So what's the true cost as a buyer outside of the price that they say it's going to cost. And I think at times the different things that can be way more than what they're actually proposing for the hardware and software, to be honest.

James Dice: Um, let me, let me ask you guys a little big picture question. Well, really the landlord versus the owner occupier here. What is the, is there a changing expectation on owners and landlords of, [00:31:00] of these types of facilities right now? Like Charles, when you hear Drew talk and you're like, well, some of our tenants are like Drew, um, And thinking about the things that are, that Drew's thinking about, what, what would, what do you think as a, as a landlord, given that some of your tenants are not like Drew either, like, is the expectation changing in the industry or is it, is it same as it's always been kind of like, you know, what's in the tenant spaces is their concerns, not really our concern.

Charles Blaschke: Yeah. If it's non court, I mean, it is interesting. You can go to the, the, the company and they might only spend a hundred thousand dollars a year on energy. Um, and that maybe that's high for a lot of them. And so what I always say is if we save you 10 percent of 50 percent of that, we're saving you like five grand a year.

Like, even if it's kind of a small operation, I mean, five grand, of course, you pick it up if it's on the floor. But not if it's like, I have to learn what a PPA is and you're gonna shut down my operation. And [00:32:00] like, it's just like not gonna happen, but it's a quick yes or no. And so it is an interesting dynamic between the two.

And I think that to the question is, is, are the tenant expectations changing? Yes. Is it the top 10 percent of the market that's driving it? Yes. Is the bottom 70 percent changing at all? Not really. They know solar. They know it can save. And a lot of them are like, yeah, go do it. Like if it's going to save, I don't, you're going to pay for it.

Easy. Don't care. Kind of back to what I was saying before, like we really want to make sure our tenants save. Actually don't have to spend their time on it. Like you don't have to spend your time because if you have to spend time, it's, it's not worth it, probably either dollars and cents. And I think if you look at like that top 10%, they are pushing, you know, they want a building that's either LEED certified or has, you know, solar, solar ready, or those things do come through.

And I think they're really pushing it. And it's just when it becomes, when, when that aspect is non core to their business. Why should they care? And that's kind of the thing, like now, you know, [00:33:00] ESG, whatever that is, that's almost making it core to some companies for better or worse, sometimes there's meetings when, when there's six people in the call about solar and.

Their core business is failing. It's like, why are all of you here spending your shareholders time and money, but your core business is failing? Like, do you, are you a solar company or are you a, you know, an e commerce company that is caring about solar? So it is kind of funny sometimes, but I mean, you know, for us and most of our tenants are not, we don't have one building in our portfolio that has a chiller.

Like, we don't even have a chiller to monitor, right? So we don't even have a boiler. So what, what can a tenant expect in a lot of cases if there's not equipment? Ultimately, what I was saying earlier, it's like, there's just so, so little there. 

Drew DePriest: I'm thinking back to prior roles where, you know, separate from industrial, having to move 200 people into a temporary space for six months that we didn't know, and it was a short term lease [00:34:00] because we, we Didn't line up, leased it somewhere else for a new build out and having the job of how do we get corporate wifi into the short term space that someone else owns.

And I got to become really good friends with that particular building owners, IT staff. There were two people who were just like, yeah, cool. Let's go figure it out. Is it going to be complex and tricky? And. You know, your enterprise IT team is only going to allow us to put in one flavor of access point and it has to be in a certain position of the floor.

Let's go. It's just that. Yeah, you know, it's, it's life is, uh, life is not going to be easy. It's just where my first boss ever told me, he's like, if it were, if this job was easy, everyone would do it and we wouldn't be paying you to do it. So you could just go home. Like, okay. I try to keep that in mind, but you know, just the fact that it's.

Yeah. Yes, there's a contractual relationship between two companies, but just the willingness of everybody to say, let's go figure it out is [00:35:00] that's key. Totally. 

James Dice: Um, we're running out of time here. We gotta, we gotta close things off. I feel like we could, I could talk to you guys all day and continue to ask questions.

Um, As we sort of lead up to NexusCon in the fall, Charles, Drew, I know you're going to be there. The thing I want to ask you guys about is, well, first of all, I'm super excited that none of you knew each other and now you do, and you'll, you'll be able to meet in person, which is one of the most fun pieces of what we do at Nexus Labs is connecting, connecting people.

Um, but as you guys think about leading up to that, uh, what are you most excited about seeing and learning as we, you know, put together the agenda? For me, it's 

Drew DePriest: exactly what. You just alluded to, it's the, the IRL, the in real life version of the community, James, that you and the team have built over the last couple of years.

It's, it's a very, a colleague in my last role who used to describe things like Nexus and a few other events is, it's the only place I can go where people just get it, I don't have [00:36:00] to explain what I do, I don't, you know, I can use acronyms and they'll understand. It's, uh, you know, for me, it's all about the connection, the learning opportunities and just Putting a real life face to all these names that I've been learning from the last couple of years.

Charles Blaschke: Yeah, I'd say, I'd say the same. I like in person events generally, and they've been bad about getting out there post COVID. And after coming back to the US, um, and just had the head down and grinding and trying to make impact. And so, yeah, going, going to an event with the right kind of people. I think the way Vexcon's structured kind of no BS, like straight talk.

And I think that's a lot of value of what we've seen today. Like. Obviously, we know of similar landlords and tenants in spaces like this, but that's the big thing for us is how is it, how have others made this work, metering and industrial, let's say, RTU upgrades, solar, because we know it can be done and value can be created.

And I think in my role, specifically, what I need to do is find a [00:37:00] way to use these technologies that are, you know, pretty tried and true from like a hardware software standpoint to get them done. Into our buildings for the benefit of our tenants, landlords, equity partners, banks, environment, whatever that is.

Um, because I think there is a critical power crunch coming to the U S and globally that is going to cause major, major problems and already is, it's already, it's been popping this up for years, but I'll say it like AI is not slowing down the need for data centers. And when we're talking a hundred megawatt point loads.

Gigawatt campuses, we got major problems. And, and I think, mostly, you know, working on the clean energy supply side now and deploying those assets and investments, I think the only solution is efficiency and efficiency starts with data. And, and the smart building stuff, honestly. So I, I think you wake up in a year and we're, we're talking about very different things and then two years, very different things.

And I think [00:38:00] it's going to be, how can I get a little more capacity? There's value in having a building that's an empty space with a transformer in five megawatts ready to plug in. I think that's, I think that's going to drive a lot of stuff. 

Drew DePriest: Can I also plug really quick to James, what gets me excited for the conference is the number of.

What I would consider new to me voices. So it's, it's not, you know, as you scroll through the speaker list, you know, yeah, there are some familiar faces and folks that feel like if you've been in the space long enough, you start to, you know, you see folks that have been there around 20 years, like I have.

Um, but I think it's exciting to me personally, that anecdotally seems to be a majority of folks who have not historically been headline speakers at a smart building conference. And I want to go to every single panel that. A new voice is going to be on. 

James Dice: I'm glad you said that because our, our team, Shig shout out to our team, the amount of, [00:39:00] the amount of not scalable one on one outreach that we've been doing for this podcast is, uh, Uh, let's just say no one else does what, what we've been doing to make it, make it so that it's not the same voices saying the same stuff about what we plan on doing next year, we want to hear people talk about what they, what they have done and what they can share and have it be, yeah.

New, new folks. Well, thanks so much for coming on the show. Maybe we do this again sometime once there's a, you know, a couple more projects to talk about. So thank you.

Rosy Khalife: Okay, friends. Thank you for listening to this episode as we continue to grow our global community of change makers, we need your help for the next couple of months. We're challenging our listeners to share a link to their favorite Nexus episode on LinkedIn with a short post about why you listen. It would really, really help us out.

Make sure to tag us in the post so we can see it. Have a good one.

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