A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play focuses on new and evolving opportunities for the real estate investor, spanning individuals, venture capitalists, private equity funds, family offices, institutional investors, and large public companies. To stay updated on future editions, sign up to receive them directly in your inbox.
As the nation experiences brutally high temperatures this summer, the importance of effective cooling solutions in commercial real estate portfolios has become increasingly critical. Landlords are faced with the challenge of balancing soaring demand for cooling with rising operational costs, making energy efficiency a top priority. Unfortunately, many large buildings operate with systems that lack the necessary intelligence to manage temperature variances effectively. Centralized temperature settings often lead to discomfort, with office workers frequently wearing sweaters in the summer while feeling overheated in the winter.
To combat these issues, new technology is emerging to enhance cooling solutions. One notable innovator is Runwise, a New York-based technology company that has developed a cutting-edge hardware/software platform designed to eliminate overheating in large buildings. Recently, the company expanded its capabilities to focus on cooling systems as well. “We’re trying to hit these climate goals, yet right in our literal building we’re throwing money away every time you run a boiler when it doesn’t need to run,” said Jeff Carleton, co-founder and CEO of Runwise. “You’re wasting money and producing carbon emissions unnecessarily, which makes nobody comfortable.”
Runwise’s approach combines advanced weather algorithms with a wireless sensor network that communicates with a central control system. This control system analyzes real-time data to optimize building system operations. For instance, a typical 100,000-square-foot building might have a single boiler, but it requires multiple temperature inputs for optimal performance. Runwise installs 20 to 25 sensors throughout the building, which take an average based on user settings and future weather predictions. This data helps determine how often the boiler should operate, leading to significant energy savings.
As of now, Runwise technology is installed in over 10,000 buildings across 10 states, serving approximately 1,000 customers, including major real estate owner-operators such as Related, Equity Residential, FirstService Residential, MTA, Port Authority, National Grid, Rudin, LeFrak, UDR, Douglas Elliman, and Akam. The company claims to have collectively saved more than $100 million in energy costs to date, showcasing the effectiveness of its solutions.
Runwise recently announced a successful $55 million Series B funding round led by Menlo Ventures, which raises its total funding to $79 million. Other notable backers include Nuveen Real Estate, Munich Re Ventures, MassMutual Ventures, Multiplier Capital, Soma Capital, and Fifth Wall. Carleton mentioned that the additional funding will be utilized to expand the business nationwide and integrate artificial intelligence into its systems. “It’s only going to become more and more ingrained in what we build as we collect data from more buildings and develop advanced models for running them more efficiently,” Carleton stated. “We plan to use AI to continuously enhance our algorithms for improved efficiency.”
