Technological advances have the potential to drive profitability in commercial real estate (CRE) operations, and the multifamily sector is starting to make choices among a range of available solutions. But managers and owners have to build tech strategies that balance innovation against client needs and the demand for meaningful efficiency improvements.
Take-up of PropTech across CRE has been slow so far – while 97 percent of respondents to KPMG’s 2018 Global PropTech Survey believe that digital and technological innovation will impact their business significantly, more than half the respondents graded themselves as five — or less — out of ten when it came to their digital and innovation maturity, and only 7 percent saw themselves at the cutting edge. Clearly, there are challenges to overcome as managers and owners commit to new technologies, choosing from a wide universe.
The wide-ranging discussion during a recent panel, chaired by Ecosystem’s Marc Couture at the Multifamily Summit in NYC on November 1, mirrored the breadth of solutions on offer.
At Gotham, COO Phil Lavoie focuses on technology that can enhance the tenant experience and facilitate resident retention. He pointed to keyless entry systems that use codes or facial recognition as an amenity that residents may appreciate, although security concerns have slowed implementation. Gotham has also implemented a residential satisfaction survey app linked to online amenities like automated work orders and links to service providers. The survey gauges tenant sentiment and internally can also set benchmarks for building management.
As well as resident-facing tech, software that facilitates operations at the corporate level can increase business efficiency. The possibility of streamlining the search for new acquisitions is interesting to Paul Gottsegen, Executive Asset and Acquisition Manager, Canada & US, at Time Equities; he mentioned listing search services and analytical software. He’s also keen on software that can automate some aspects of the leasing process. But he stressed that, “to implement technology, you need commitment from the top and a forward-thinking leadership.”
At the building level, Michael Gilbert, Director of Energy and Sustainability at Fairstead, sees potential in technology that facilitates energy savings, including opportunities in New York City related to metering or demand management and fuel switching. Building-specific data on energy and water use is essential for decisions about capital deployment. He noted that there are incentives on offer that can help to fund deployment.
To manage energy spend, Jeff Hendler, COO, Logical Buildings, also stressed the need for transparent and actionable data at the building and portfolio levels. “With accurate data on your buildings, you can do capital projects more intelligently,” he said, adding that many multifamily buildings “are not that smart.” Using the latest data-gathering technology allows property owners to understand how their buildings use energy today and develop projects that improve NOI, boost property values, and solve longstanding comfort issues to make buildings more marketable. Comparing high-quality building data before and after project implementation allows owners to quantify the value of those improvements.
For all the tech that can be deployed in residential buildings, however, managers can never stray too far from the basics – an app is no substitute for good service and a competitive offer. Fairstead’s Gilbert noted that laundry remains the number one amenity in tenants’ eyes. And as Lavoie pointed out, “to attract millennials, you need all the latest features, like apps to help them pay rent and file work orders. But they also want the best deal.”