Real Estate Technology & Energy

Customer Relationship Management (“CRM”) solutions continue to be at the top of every company’s software shopping list. Whether you are a Fortune 500 company or a small three-person office, CRM solutions provide the modern ties that bind relationships. Who among us doesn’t use Outlook, Act or some other form of contact manager? For building owner/managers who are focused on maintaining and enhancing relationships with tenants, the answer isn’t CRM, its TRM (“Tenant Relationship Management”).

A TRM solution focuses on the specific needs of tenants by providing pertinent information to tenants about their building, its contractors, work requests, and notifications. A TRM solution, like an operating system, can be outfitted with software for visitor management, access control, architectural information and much more. Though an online work order management system alone is great for building operations, it fails to focus on what tenants really need. Whether by phone or online, the light bulb is going to get changed. The real question is how are tenants getting their fire drill notifications? How are they managing building access? Can they contact relevant service providers for building related work?

Having implemented several TRM solutions in both multi-tenanted and single tenanted commercial properties, the most noticeable difference with each installation is the improvement in tenants’ opinion of building management. Providing tenants with access to pertinent contacts and communication gives tenants a sense of empowerment. For the first time, tenants can access a building’s relevant knowledgebase without a phone call, without scrounging around for the notice slipped under the door, or calling the building office looking for the approved contractor for carpet cleaning.

Most recently, we replaced a very expensive work-order management system with a less expensive TRM solution. This work-order software company let the building have their work-order system for free for one year. They must have thought that once the building was hooked, a change would be difficult. They were wrong. Quickly, we discovered less than ten percent of the building’s tenants were using the work order system. We were even more surprised to find out that tenant’s attitude was, “I get charged enough for rent, I am not helping them run their building!” With the simple change to our TRM platform, the building usage jumped to eighty percent, the building is running smoothly and the tenants are happier.

The typical customer relationship management solution is applied to situations where a product or service is delivered from a business to a client on a one-to-one basis. While in some respects supplying space is a service, the interaction of janitorial services, contractors and building staff with tenants is not a one-to-one relationship. Each property is unique and building services are provided in a multi-dimensional fashion.

For example, requests for service might be made directly to building staff, but a third-party might handle the actual work. Or, a building might have an emergency response system for brown-outs, but the notifications are dispatched from a central location. Faxes and porters handing out letters just wont do anymore. A well-designed TRM allows for off site instant notifications to selected tenants and/or direct contact with selected vendors.

Remember, it is the everyday things that people appreciate. Leveraging technology to make relationships stronger and more valuable is the purpose of implementing a Customer Relationship solution. A TRM solution for building owner/managers is no different. Sharing information and communication on an easy to use platform sends a positive message fortifying existing relationships.

Before deciding on what online work-order system should be implemented, consider a TRM solution as a comprehensive communication system, one that not only allows building staff to administer work-orders, but also enhances the overall tenant experience.

It seems everyone was lured into making Internet software — the real estate industry was no exception. Attempting to leverage an existing client base, established real estate companies spent millions trying to build Dotcoms for the purpose of spinning out IPOs. Rather than building software with usefulness and practicality in mind, many work order systems were built to attract Wall Street attention. Evidently the lack of thoughtful software design in combination with negligible service seems to be the hallmark of many of these IPO-driven work order management systems.

One of them claimed to have spent over $10 million on their software. That’s like building a rocket ship to get to Queens. These poorly-designed overly expensive work order systems usually have less than 10% of their tenant base actually using them. That is unacceptable. Most tenants find the system cumbersome, not worth the effort and only served to put more work on their shoulders. Without any real discernable value for the tenants, tenants are/were just not interested. Rescuing buildings from these work order IPO wannabes, Shortpath has replaced three different work order systems in four different locations. Now, with Shortpath’s TRM, 85%-100% of tenants are placing online service requests.

Cogent research, understanding and talent are the real drivers of usable software. Many companies who throw money at software adding every possible gadget ultimately fail their customers. Did you see the magnifying glass on that $300 Swiss Army Knife? Pretty cool, did you ever use it? If you are going to ask the average consumer to use software everyday, it better be easier than making a call.

The first assignment in software design is researching what actions the software is intent on replacing. In the case of work order management, before software, tenants would call in a service request, work tickets are written out on forms and distributed. Written notes and signatures usually will accompany a work ticket to its completion. The system works, and most tenants find it acceptable. So there is the research, why improve a working and acceptable system?

For starters, the record keeping needs improvement, the phone calls and the written tickets are inefficient, and the standard by which tenants are attracted to become tenants or stay tenants will never be “acceptable”. Here is where most work order management systems miss the target; what is good for the building may not be good for tenants. If it does not work well, easily and efficiently, for tenants than you have just lost all three of the most important improvements.

If the tenants are not putting their work orders online, than the record keeping is based on the translation of a phone call. The phone call and the placement of information into a work order system takes double the time and invites errors. Plus, this method of use has no palatable impact on the tenants. Real tangible improvements begin when tenants choose to submit their service requests online rather than making the telephone call.

The central point of design for online work order management starts with a tenant choice. To present work order management to tenants without supplying real benefits is no choice. Many tenants don’t care about records of service requests or who changed what light bulb. Shortpath’s TRM offers much more than just tracking work orders and that has translated into greater adoption. This adoption continues to be ongoing. Often purchasers are not end-users. If the work order software only focuses on building management, ultimately no one will be satisfied. When the bride’s father is wondering why the guests aren’t dancing at his daughter’s $100,000 wedding, look no further than the son-in-law who spent the money on his favorite Grateful Dead cover band to play the gig.

Generally, online work order management systems have entirely forgotten the other primary user, the tenant. If your building is suffering from this madness, try a new system with a different company. Your current work order system provider is not going to change their methodology for you. They are in the business of selling software and moving on.

Discounts on services, permission ordering programs, directories and classifieds serve to round out a complete online offering. Moreover, with interest in having tenants participate in these opportunities, Shortpath pushes the envelop in attending to tenant needs. Integrated with additional services, Shortpath provides tenants with additional tangible value. While real estate software providers continue to struggle to get Wall Street attention, Shortpath focuses on providing a real value and a usable product.

We are quick to believe that new perimeter-weighted graphite/boron/titanium equipment harnessing the latest technologies will miraculously improve our games. Almost every golfer has stood on that first tee of the season wielding a new driver believing that this year’s technology is going to cure his/her slice. Year in and year out, we want to believe it’s the equipment not the player.

Consider the fact that your opponent might already have the “latest and greatest technology.” Getting the newest equipment every year neutralizes your opponent’s advantage. The fear that your opponent’s new tennis racquet might provide some unseen benefit weighs on each competitor’s mind. So, to improve our games, to get every advantage, we look to technology as our savior.

New York’s real estate market is far more competitive than the average tennis match or golf round. More and more buildings are utilizing the latest technologies to their advantage. Similar, to the “radical” conversion in the early nineties from wooden woods to metal woods, eventually all buildings will have online services in their bag. Two years ago less than 5% of commercial buildings used online services for building operations. In 2003, with the advent of energy management programs, lease administration software, work-order systems, online building directories and notification systems, the number of buildings using software for some pat of building operations has climbed to more than 15%.

When was the last time you played tennis against someone using a wooden or even an aluminum racquet? With the benefits of online services, building owners/managers can offer potential tenants better run facilities and more efficient services. The buildings not taking advantage of putting their building services online are stepping onto the court with less than the “best” opportunity to win over the next tenant.

In some areas of real estate, technology is critical. In a survey taken last year more than 75% of all real estate transactions involved the use of online services like CoStar. The ability to retrieve and analyze leasing data makes the use of CoStar very compelling. Ultimately, almost all brokerage firms interested in remaining competitive use online services for acquiring and retaining tenants. Like metal woods or graphite racquets, any real estate firm that desires to remain competitive will use an online service.

Expanding this metaphor further, no one stops at trying to gain the advantage of technology with one club. First it’s the woods, next it’s the perimeter-weighted irons, then it’s the putter and finally the search for the perfect golf ball begins. The reliance that many firms put on online services for leasing is truly only the beginning. Eventually, all building owners and managers will seek to get the “latest and greatest” advantage, or at least neutralize the opponent’s advantage by adopting programs and systems for lease administration, energy management and building operations.

There is a sensible order to technology adoption that focuses on impact. With metal in the club head and a graphite shaft, new metal woods dramatically improved driving distance. Lighter stronger graphite caused a dramatic difference in power and control in tennis racquets. Within ten years of these improvements being introduced, the widespread adoption is apparent. We are only two to three years into the dynamic shift from off-line building management to either server based or web-based building management. In a few more years there will be a similar widespread adoption of online services for building operation, and incoming tenants will expect these services. Right now, in this highly competitive market, can you afford to still be playing with a wooden racquet?

Recently, a building manager asked if the lobby’s existing closed circuit cameras could broadcast images through Shortpath. Yes, certain cameras equipped with the ability to broadcast to an IP address allow web-based viewing. In addition, typical IP-driven software with contemporary security features permit broadcasting of specific cameras to specific individuals. For example, a security guard might be able to see four cameras, a tenant one and a building manager twenty. Viewing lobby activity, watching building staff at work, making sure the front of a building has been cleared of snow or observing a loading dock, the applications are limitless. With the pervasive nature of the Internet, viewing, storing, and accessing data no matter where it resides is possible. So, the questions that come up should not be whether it can be done, but rather what will be achieved and to what effect will the installations have on building security.

New tenants mentioned the desire to see what was going on in the lobby. More specifically, they wanted to observe visitors and authorize their entry without having to come downstairs. Traveling to the lobby and vouching for unexpected visitors was disrupting meetings and was affecting productivity. Based upon what this tenant wanted, quality was not important and the picture could be delayed as much as five seconds. Achieving this solution, not just for this tenant, but also for the entire building would be simple. Once installed a building could turn the image broadcast on and off like a faucet. Tenants desiring the functionality would purchase the broadcast. ie. Property TV.

On the technological side, one of the relevant issues in IP broadcasting and security cameras is the delay. A security incident can take place in as little as two seconds. In fact, a person can commit a crime and run 30 yards in five seconds. So, IP cameras require significant bandwidth in order to broadcast quality digital images in real time and be effective in alerting security guards on premise of suspicious activity. Many buildings already have this bandwidth and have either applied it or could apply it to digital broadcasting. Some of the great reasons to go with digital feeds include price and ease of storage, transfer and search.

Eventually, tenants are going to want access to lobby cameras and other views of the building in order to manage their own security. The nanny cam was merely the beginning, and an accessory that could be included for individuals at work as well. With all the installations of cameras by the Department of Transportation to enforce traffic laws, people’s expectation of privacy is quickly eroding. Larger tenants are looking at new and different ways to control their own security. Increasing the number of background checks, scrutinizing people’s lives, now owners and officers are going to find themselves liable for the safety of their employees and businesses are going to look to their landlords for help. One way to economically deliver this kind of help is through the Internet.

Building on IP technology allows owners to integrate existing systems and augment security as necessary with new technologies as they become more affordable. For residential, tenants can see if the laundry room is busy or whether the freight elevator is in use. For commercial, confirmation of identity or even a look outside at the weather might be of interest. Whatever the application, secure and economical, through cables or wireless, the Internet provides a great delivery system for broadcasting images throughout a building community.

Using an existing Internet connection, building operators/owners can transform a lobby into a WiFi public access point generating roaming and network fees from WiFi aggregators. WiFi (short for “wireless fidelity”) is the popular term for a high-frequency wireless local area network (WLAN). WiFi aggregators sell monthly connectivity to consumers for access to their publicly available WiFi access points, similar to the way AOL, Earthlink and NetZero sell monthly dial-up service to its consumers. According to recent TV coverage, articles in the Wall Street Journal and New York Times, WiFi, is going to be everywhere, and everyone will become a subscriber. In many ways WiFi mirrors the earlier prospects of broadband, but without the worries associated with potential industry upheaval and service disruption.

There is a distinction that must be made between private and public use of WiFi technology. Private wireless networks can be set up for home or office using WiFi. It allows IT administrators to set-up networks without wires thereby avoiding substantial cabling costs and eliminating the headaches associated with managing hundreds of wired connections. A laptop with “Bluetooth” or a wireless card can be carried around the home or office and may access other computers or the Internet from anywhere within range (typically 150 feet) of the access point. This is great for mobility within the office and intra-office collaboration. With transfer speeds for data between 5kpbs and 11kbps, WiFi is speedy enough to browse the Internet, perform typical networking tasks and retrieve emails. Companies have used this technology to set-up networks with offices that span two different buildings or on different floors of the same building.

The public use of WiFi has revenue generating potential, or can be offered for “free”. Once connected wirelessly to the public access point, WiFi allows anyone with a WiFi enabled PDA or Laptop access to email or the Web. Imagine tenants riding the elevator, passing by on the sidewalk or standing in the lobby with their PDA checking an email from a customer, sports scores, or the financial markets. As a public access point operator, you can either provide it free or to WiFi users at a monthly cost. To comprehend the potential user-base, understand that the majority of laptops from Dell and IBM are shipped with WiFi hardware included.

For private-use, the problems that WiFi present are two-fold. The first is security and the second is interference. Unless adequately protected, a WiFi wireless LAN can be susceptible to unauthorized users. As for interference, the 802.11b (Wi-Fi) technology operates in the 2.4 GHz range, the same radio wave spectrum as cordless phones, household appliances, and garage door openers. The same static that you here on a cordless phone also may cause data transfer loss.

The good news is that the above problems can easily be addressed. Given good technological know-how, security concerns can be avoided with firewalls and encryption techniques. Also, interference can be significantly managed with the latest innovations. These concerns are immaterial in operating a public access point. Much like with the use of cell phones, people have reasonable expectations regarding interference and security. While it may seem complicated, a properly managed WiFi enabled network can be set-up inexpensively and easily. A well-trafficked location with a WiFi access point may instantly become a substantial source of revenue.

Similar to owning the land rights to a cell tower, a building owner can operate a public WiFi access point and receive a portion of roaming fees with larger WiFi user-aggregators like Boingo, Joltage, Ipass or Gric. At this point, we are in the infancy of the WiFi industry, and its impossible to predict which WiFi user-aggregators will exist five years from now. But unlike broadband providers, the WiFi companies don’t actually provide the service, the access point operators do. So long as the building maintains its access point, there can be no disruption of service. More than likely, the corporate transactions in this industry will be similar to the consolidation of ISPs like Earthlink and Mindspring, or Juno and NetZero where there were no service disruptions. These aggregating companies (Boingo, Joltage, IPass, Gric) will consolidate their subscriber-bases with the larger wireless providers like ATT, Verizon, Nextel or Cingular.

Businesses will be unlikely to depend solely on the building’s WiFi to operate their networks; that would be the equivalent of running a business’ entire phone system on cell phones. If the building’s public access point was actually down for a day or two, the only loss will be lack of roaming fees. Some small offices in the building may use the WiFi access instead of installing a costly T-1 line. This obviously has a negative impact on a building’s broadband provider, but the net result is a happy tenant saving money and possibly generating money for the access point operator, the building.

Being a complete technology solution for buildings, Shortpath along with its work order and visitor management system offers WiFi public access point installation and management. Third-party aggregators and Shortpath can assist in attracting traffic to building operators with each installation. Currently, the revenue typically tops out at about $2,000 per month even in the best locations, but once the larger wireless providers enter the WiFi world, these numbers will escalate considerably. Once the access point is installed, people will know about it and begin to use it. With connectivity already present on the ground floor of a building, WiFi virtually costs nothing to install and nothing to operate. In this soon to be WiFi industry, traffic equals revenue. Owning an access point that people know about and use is the key.