The Inconvenient Truth About Building Automation Systems

• Savings adrift: Automated systems are falling out of alignment with how buildings are actually being used.

• Flop on Fifth: Saks Fifth Avenue is nearing bankruptcy after missing a debt payment, with potential ripple effects across its store footprint.

• Portal to the Middle East: Saudi Arabia has launched a centralized digital platform to streamline foreign ownership of property under new law.

• Multifamily outlook webinar: Demand will be steady in 2026, but margins are thinner and execution matters more than ever. Sign up

Perspectives

The Inconvenient Truth About Building Automation Systems

Electricity costs keep climbing, and for many commercial building owners the first line of defense has been automation. Building Automation Systems promised meaningful energy savings and fast paybacks—but in practice, those gains often fade just as owners expect them to materialize. What looks like a technology problem is often an operational one hiding in plain sight.

Over time, even well-designed systems drift. Sensors fail, software ages, setpoints get tweaked, and schedules stop reflecting how buildings are actually used. Because these changes happen gradually—and utility costs are often passed through to tenants—inefficiencies can persist for years without triggering alarms or scrutiny.

The result is a quiet erosion of performance that only becomes obvious when someone looks closely. In one high-profile public building, a system designed to optimize energy use had slipped into near-manual operation, driving some of the highest energy intensity in the state. The turnaround didn’t require new equipment, just a reset—revealing how much value many buildings are leaving on the table by assuming automation takes care of itself.

Overheard

Saudi Arabia Opens the Door to Foreign Real Estate Investors With a National Digital Platform

Saudi Arabia has unveiled a national digital real estate platform called Saudi Properties designed to serve as a single gateway for foreign investors to browse, apply for and register property ownership under the forthcoming Non-Saudi Property Ownership Law. The platform consolidates browsing, eligibility checks, applications, and government approvals into one interface, aiming to reduce bureaucratic friction and improve market transparency just as the law goes into effect in January 2026. By centralizing what has historically been a fragmented process, Saudi authorities hope to make the market more accessible and understandable for international buyers and developers.

This initiative is part of a broader policy push under Vision 2030 that has seen Saudi Arabia rapidly expand its real estate finance and investment ecosystem. Opening property ownership to non-nationals represents a significant departure from decades of restrictive policy and reflects a desire to broaden foreign direct investment in residential and commercial assets while maintaining regulatory oversight through digital systems. Early signs suggest strong interest from global investors and developers as the Kingdom positions itself as a real estate hub in the Middle East, backed by urban megaprojects, growing capital markets, and broader economic liberalization.

The launch of Saudi Properties could mark a strategic inflection point. If the digital platform helps smooth entry and provide clearer data, capital that historically gravitated to London, New York, or Dubai might increasingly view Saudi markets as a viable alternative, especially for high-growth urban and mixed-use developments. Other countries watching this playbook may follow suit, adopting similar digital gateways to attract foreign investment while safeguarding domestic policy goals. That could shift global real estate flows, encourage cross-border portfolios and spur competition among emerging markets looking to unlock foreign capital without sacrificing regulatory control.

As Saks Stumbles, Landlords Face a New Test for Legacy Retail Anchors

Saks Fifth Avenue, the century-old luxury department store chain, is preparing to file for bankruptcy after missing a scheduled debt payment. The company’s financial strain reflects prolonged pressure on traditional department store formats amid changing consumer habits, high operating costs, and the rise of digital and off-price competitors. Missing a payment on senior debt signals that liquidity has tightened to the point where a restructuring filing is likely imminent, even as the retailer seeks to negotiate extensions with creditors.

Saks’s footprint spans dozens of flagship locations and leased stores in prime urban and suburban nodes, many under long-term, high-rent lease commitments. Historically, department stores anchored major retail properties, serving as traffic drivers and symbolic markers of premium shopping districts. As these anchors weaken, landlords are left facing complex choices: enforce lease obligations, offer concessions to keep space occupied, or begin redevelopment discussions that bring mixed-use infill, experiential retail or residential conversions into play. Lease renegotiations may become inevitable, and landlords with significant exposure to Saks properties will need to balance short-term cash flow with long-term occupancy strategy.

For investors and the broader commercial real estate market, Saks’s difficulty is another indicator of how traditional big-box anchors are adjusting to a fractured retail landscape. The interplay between retail traffic, experiential competition, and omnichannel strategies has been intensifying for years, and a bankruptcy restructuring could alter rent rolls, tenant mix expectations and valuation models for mall and high-street assets. As landlords watch how Saks handles its debt and leases, similar retail occupiers may seek more flexible terms, shorter lease durations or co-tenancy protections, reshaping how large tenant commitments are underwritten and priced in future retail investments.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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