ROI of IoT: The Best Returns Come from Diving In, Not Dipping Your Toe in the Water

Investing in a new IoT sensor network for the workplace isn’t cheap. As we covered in our Buyer’s Guide to IoT Sensors, deploying these systems involves significant upfront and ongoing costs​. 

There’s the upfront capital: purchasing hundreds of sensors (often hundreds of dollars each), installing them (paying for wiring, mounts, network gear, and integration labor), and setting up software to collect and visualize the data. Then come the ongoing expenses: cloud service subscriptions or software licenses, maintenance like battery replacements and calibration, and staff time to manage the data. The Nexus Marketplace data pegs typical IoT operational costs at $0.10 to sometimes over $1.00 per square foot per year. 

With tighter budgets, it’s no wonder corporate real estate, workplace, and facility teams look at these price tags and remain skeptical. Many organizations respond by dipping a toe in the water first—running a small pilot project to see if the promised benefits materialize—before committing to a larger rollout.

That cautious approach is a logical first step. An isolated pilot (say, instrumenting one floor or one building with sensors) can validate whether the technology actually works in your environment and delivers useful data. However, pilots by nature are limited. They typically focus on one or two use cases and one department’s needs, so the returns also tend to be limited. 

Once a pilot proves its worth, the next step is where the real magic happens: scaling up and integrating IoT into daily operations. In practice, the best business case for IoT comes when you spread the costs across many budgets and reap the benefits across many departments. In other words, the biggest ROI comes from diving in—treating IoT as shared infrastructure powering multiple use cases—rather than treating it as a one-off gadget for a single problem.

This article looks at two real-world examples that illustrate this progression. The first is a pilot deployment at Manulife, a large financial services company, which used IoT sensors in a couple of office buildings to rigorously prove out the value (including a $3 million annual saving on real estate). 

The second is Kilroy Realty, a major real estate firm that has fully integrated IoT sensors into its portfolio operations for everything from leak detection to space utilization. Both cases show how workplace teams can move beyond pilots and bake IoT into their workflows—and why the deep end of IoT adoption offers exponentially better returns than toe-dipping.

Manulife: Proving the IoT Business Case in the Workplace

Manulife (parent company of John Hancock in the U.S.) set out to evaluate a new IoT sensor stack in a pair of its office buildings. This wasn’t a tech experiment for its own sake—the project team, led by Mark Thompson (Manulife’s corporate real estate director) and Paul Vandenberk (a digital solutions consultant from HH Angus), insisted the deployment stand up to financial scrutiny. 

As they presented at NexusCon ‘24, they installed 87 people-counting occupancy sensors and connected to 688 lighting-control sensors across two buildings​, then pored over the data to see if it could drive real improvements. The results touched multiple facets of workplace operations:

Space Utilization & Portfolio Optimization

One of the first insights was that badge swipe data isn’t the same as actual occupancy. Like many companies, Manulife had been using security badge logs as a proxy for office attendance. But when they compared badge swipes to the new sensor data, they found badge data was under-reporting true occupancy by about 24%​. (This isn’t uncommon—industry studies have found that roughly 20% of people in a building may not badge in properly, due to tailgating and other factors​. 

This more accurate occupancy data let Manulife identify which areas were truly busy or underused. For instance, by comparing usage across different meeting rooms, they discovered that the mix of conference room sizes was appropriate—no drastic reconfiguration needed. 

More importantly, the data revealed that several floors were consistently underutilized. Backed by hard numbers, the real estate team confidently earmarked two entire floors for sublease, eliminating excess space. That decision is saving Manulife around $3 million in lease costs annually—a huge, tangible ROI from the pilot. 

“That one was very easily quantifiable in terms of ROI,” Paul Vandenberk noted, as the cost of the sensors was trivial next to multi-million-dollar lease savings.

Workplace Experience & Operational Efficiency

Not all benefits were about cutting real estate—some were about improving services (or avoiding unnecessary costs). One use case was the employee cafeteria hours. Management wondered if they should open the cafeteria earlier in the mornings to accommodate employees. 

Instead of guessing, they looked at the occupancy patterns. The sensor data showed that early-morning headcounts were low, suggesting an earlier breakfast service would be underutilized. Manulife decided not to change the cafeteria opening time, which avoided incurring extra labor/food costs for little benefit​. 

In the same vein, the facilities team started using daily occupancy counts to right-size food prep in the cafeteria—cooking only what’s needed based on how many people are actually in the office on a given day​. 

This reduced food waste (and saved on catering costs) without hurting the employee experience.

Measuring Return-to-Office Initiatives

Like many firms navigating hybrid work, Manulife has been trying incentives to bring people back to the office. With sensors in place, they could finally measure the impact of these initiatives in real time. For example, they ran a promotion offering 25% off cafeteria meals on certain days and then checked if more employees showed up on those days​ (yes, they did). 

They also experimented with company policy: when Manulife increased the required in-office days from two to three core days per week, Mark Thompson’s team tracked the effect of adding that third mandated office day. 

“We wanted to see the uptick on the third core day when we added it,” Thompson explained. “The charts demonstrated that we were able to bring as many people in on the third core day as we did to the other two. But it also shows that people aren't coming Mondays and Fridays still.” 

In other words, making Wednesday a required office day successfully boosted mid-week attendance to target levels, but Mondays and Fridays remained lightly attended (a pattern many companies see). These insights, delivered in clear charts, gave executives evidence about how their return-to-office strategies were working and where challenges remained. Rather than relying on anecdotes or gut feel, they had data on how a discount on lunch or a policy change translated into bodies in the building.

Safety and Asset Management Insights

Some findings were serendipitous. Thompson mentioned an unplanned fire drill in their Montreal office: the occupancy sensors proved that everyone had abided the alarms and no one remained in the building. That kind of real-time occupancy visibility could be very useful for safety teams (e.g. verifying building clearance during emergencies). 

The project also highlighted opportunities for asset management—for instance, understanding which rooms or amenities were most in demand so they could allocate resources (like portable A/V equipment or furniture) to the right places. It’s all about using data to ensure the workplace is tuned to actual employee usage.

Crucially, Manulife approached this as a comprehensive evaluation of the technology’s impact. They quantified savings where possible (millions in subleased space, hard dollars saved by not extending cafeteria hours, etc.) and noted qualitative improvements (better employee experience, validation of RTO efforts, less waste). The success of this pilot has given leadership the confidence to treat IoT sensors as core infrastructure going forward. Thompson indicated that they are now expanding the IoT stack to other offices (including major hubs like Boston and Hong Kong)​. 

What started as a toe-in-the-water trial is evolving into a company-wide rollout. Manulife’s team is no longer asking “Do these sensors pay off for this use case?”—they’re saying “These sensors give us critical visibility and ROI across many facets of our operations.”

Kilroy Realty: Integrating IoT into Operations for Maximum ROI

If Manulife demonstrated the ROI of a targeted IoT pilot, Kilroy Realty shows what diving in looks like at a portfolio scale. Kilroy is a real estate investment trust (REIT) with about 17 million square feet of office space across the West Coast. 

They’ve been investing in smart building technology for years, and their approach to IoT sensors (for things like occupancy, air quality, and leak detection) is deliberately holistic and long-term. Bayron Lopez Pineda, Kilroy’s former Director of Operational Technology, who has moved on to Netflix, often emphasizes that these projects aren’t just about gadgets—they’re about improving the way buildings are managed and spreading the benefits across departments.

One key to Kilroy’s strategy is cross-department collaboration. Rather than let each team pursue separate tech pilots in silos, Kilroy evaluates IoT investments through committees that include stakeholders from engineering, operations, security, sustainability, and more​. This ensures that a given sensor deployment can serve multiple needs and that its costs and benefits are shared. 

ROI, to them, isn’t just a narrow calculation for one use case; it’s the sum of many contributions. For example, when Kilroy first deployed occupancy sensors, it may have been to comply with a local energy code or COVID capacity regulation. But once those sensors were in place, they leveraged the data for other uses—adjusting cleaning schedules based on actual space usage, supporting security by flagging after-hours motion, and even providing metrics to the leasing team about how different amenities were utilized. 

An IoT sensor might start in one budget (compliance), but also deliver value to janitorial, security, leasing, and sustainability teams simultaneously. This multi-use philosophy makes it much easier to justify the upfront and ongoing expenses. As Kilroy’s team learned, a sensor network’s “ability to meet multiple needs” often outweighs any single cost-saving metric. It turns a tech deployment into a shared investment in better operations.

Kilroy also takes a long-term financial view with smart building tech. They aren’t afraid to spend a bit more upfront if it means lower costs and headaches down the road​. This approach played out in their operational technology (OT) network infrastructure. Kilroy invested in a converged network across their properties—essentially a dedicated, enterprise-grade network that all building systems (HVAC, security, IoT sensors, etc.) connect into. 

This added initial cost at first, but it makes it much easier to deploy new IoT devices at scale and manage them reliably (no patchwork of flaky consumer Wi-Fi devices). It also means devices can last longer and be centrally monitored. 

Perhaps the clearest illustration of Kilroy “diving in” is their water leak detection program, which Bayron presented on at NexusCon ‘24. Many landlords might pilot a leak sensor or two after a bad water damage incident. Kilroy, in contrast, has spent over a decade refining a comprehensive leak detection program that is now standard across all their properties. 

“For us, it’s 100% deployed—every single asset has a leak detection system,” Lopez Pineda said. Originally, years ago, they had a rudimentary setup (old school phone dialers that would call engineers when a leak sensor tripped). In the last few years, they upgraded to a fully digital system on the converged network​.

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Now, if a pipe leaks or a sump overflows in a Kilroy building, sensors immediately alert the building engineers and even trigger automated responses. In fact, Kilroy installed 116 remote-controlled water shutoff valves in critical locations. The moment a leak is detected in those spots, the system can shut off the water supply to limit damage. At the same time, an alert goes out and the incident is logged in their dashboards. 

The leak detection platform even ties into other systems like security cameras, so remote operations staff can instantly verify a leak alarm on video before dispatching a technician. This level of integration means that responding to a water leak is no longer a manual, hit-or-miss process; it’s an automated workflow baked into operations.

By rolling out this leak detection infrastructure across ~80 of their buildings (and counting)​, Kilroy has essentially mitigated one of the costliest risks in property management. Water damage is a nightmare scenario for any real estate operator—repairs and tenant disruptions can easily run into the millions of dollars for a single major incident. Thanks to their IoT deployments, Kilroy has avoided numerous disasters or caught them early enough to minimize damage. 

How does that translate to ROI? Consider the following layers of return:

Preventing Catastrophic Losses

The most obvious benefit is avoiding huge repair bills. A burst pipe on an unmonitored floor could flood multiple offices before anyone knows. Kilroy’s sensors act like smoke detectors for water—catching leaks at a minor stage. 

Even if the system prevents just one major $1M+ incident, it justifies the cost of deploying sensors across dozens of buildings. In practice, Lopez Pineda noted that they’ve had many small leaks but no big unchecked floods in buildings with the new system. 

Insurance Savings

Kilroy’s risk management team actually uses the leak detection program as leverage with insurers. By demonstrating that all properties have active leak monitoring and automatic shutoff capabilities, they have been able to negotiate lower insurance premiums​. Insurers recognize that the likelihood and severity of water damage claims are much lower versus one with no early detection. 

Over time, those premium discounts (or higher deductibles avoided) add up to substantial financial savings, directly attributable to the IoT investment. This is a great example of spreading the benefit beyond just operations.

Labor and Operational Efficiency

Automating leak detection has also saved Kilroy’s staff a lot of time and effort. In the past, building engineers or security guards might have to do routine patrols or manual checks for leaks (especially after-hours or in critical equipment rooms). Now the sensors provide 24/7 monitoring, and the system pinpoints issues instantly. 

That frees up staff to focus on other tasks and reduces overtime emergencies. When an alert does come, it’s very specific—the team knows exactly which valve tripped and where—enabling a quick, surgical response. This efficiency translates to lower labor costs and faster resolution of problems​. As a bonus, by integrating leak alerts into their existing workflows (email/SMS alerts to on-call engineers, dashboard notifications, etc.), it hasn’t added burden to the team—it has streamlined their work.

Long-Term Asset Value

By investing in a robust digital system (as opposed to sticking with the old phone dialers or cheap stand-alone sensors), Kilroy ensured their leak detection network will serve them for the long haul. The devices are monitored for battery life and health, and the whole setup can be updated as needed over the network​. This means lower replacement and maintenance costs in the long term. 

It’s essentially an infrastructure upgrade to their buildings, much like installing better roofs or fire suppression—it pays back over decades. Importantly, buildings with these kinds of resilient systems likely maintain higher asset value. 

Mike Moran of Microshare, who joined Bayron on a Nexus podcast episode, noted that when building owners realize the difference between “what they paid last year on one flood vs. the price of outfitting their entire building [with leak detection], they are very quickly on board.”​ In other words, owners who fully dive in see IoT investments as adding value to the property—fewer future losses, smoother operations, and even marketing appeal to tenants who know the landlord has proactive measures in place.

Tenant Satisfaction and Retention

This is harder to put a dollar value on, but it’s significant. A severe water leak can displace tenants, ruin their equipment, and sour the landlord-tenant relationship for years. By preventing such incidents, Kilroy protects its reputation and keeps its customers (tenants) happy. No one wants to rent in a building that’s known for floods or other preventable problems. In that sense, the IoT leak system is also an investment in customer experience—an intact, smoothly functioning building leads to lease renewals and stable occupancy, which of course has financial benefits. 

As Moran quipped, everyone in CRE has felt the pain of a flood that started small but caused outsized damage; stopping those nightmares early is “very attractive”​  for both landlords and tenants. And now, with 70% lower water damage risk due to these sensors (the figure Moran cited as the industry expectation)​, Kilroy can operate with a lot more confidence.

The leak detection program is just one example, but it encapsulates Kilroy’s philosophy: infrastructure-level IoT deployments that serve multiple masters and yield diverse returns. They’ve applied similar thinking to other sensor deployments (like occupancy and air quality). 

For instance, when Los Angeles introduced stricter ventilation and occupancy tracking requirements, Kilroy installed IoT air quality sensors in many buildings. Those now also inform the facilities team where to focus HVAC adjustments and help the sustainability team document healthy buildings. 

The occupancy sensors they’ve installed in lobbies and common areas for energy management are likewise used by janitorial staff to do demand-driven cleaning (cleaning only areas that were used), which can significantly cut costs—we’ve heard up to 30% (if you can renegotiate your cleaning contracts)​. 

In Kilroy’s case, the IT, operations, and sustainability groups all share in the costs and benefits of these sensors. By breaking down silos, they avoid duplicate deployments and ensure IoT data flows into everyday decision-making. A sensor measurement doesn’t live on an island—it’s fed into dashboards that multiple teams use, and it triggers real actions (like turning off lights or dispatching cleaners or closing a valve) automatically.

Kilroy’s experience shows that to maximize ROI, IoT must become an integral part of how buildings are run. Their budgets for smart tech are not one-line items justified by a single ROI number; instead, the costs are woven into cross-departmental budgets for safety, operations, and sustainability, because the benefits span all those areas. 

Dive In for the Deepest Returns

For workplace professionals (from real estate managers to workplace experience teams), the takeaway is to think big-picture about IoT investments. Yes, start with a pilot to gather evidence—but design that pilot with scale in mind. Identify all the potential departments that could benefit if it works, and bring them to the table early. 

Treat the pilot as step one of a journey, not an isolated science project. When you present results, highlight not just the one use case you tested, but also the menu of other uses the same infrastructure could support (this helps get other budgets onboard). Be ready to make the case that an IoT platform is a strategic, cross-functional investment in operating the workplace more efficiently, not just a point solution.

Finally, keep the discussion grounded. Nexus Labs’ mantra is no hype, no fluff—and these case studies exemplify that. Manulife didn’t hype up AI or futuristic visions; they talked about badge data vs. reality and dollars saved on rent. Kilroy doesn’t market “digital transformation”; they focus on preventing floods and cutting energy waste. 

In pushing for IoT, framing it in plain, outcome-focused language wins trust: reducing wasted space, avoiding downtime, saving energy, improving employee comfort, etc. And the most persuasive arguments came when these teams could show measured results (like that 70% risk reduction or the $3M saving) rather than theoretical ROI calculators.

In the end, an IoT deployment’s ROI is not just in the tech itself, but in how it enables better decisions and faster actions in the workplace. The more deeply it’s woven into your operations, the more return you’ll see.