Technology has given every business the power to increase productivity, instantaneously transfer data, and communicate globally 24/7. Although the real estate industry has been labeled "slow to adopt," property management firms have grabbed hold of the opportunities technology has afforded them in order to provide more value to clients and increase the efficiency of building operations.
Their integration of technology has had numerous impacts on the industry and the professional. Buildings magazine solicited the experiences and opinions of professionals from some of the most respected property management firms in the United States. What follows is a summary of those conversations, revealing what has changed - and what hasn't - for an industry in transition.
Impact No. 1: A new breed of professional is born.
Two decades ago, the property management professional was primarily a technician. He/she knew the ins and the outs of a building and its tenants because countless hours were spent monitoring operating systems, recording data, taking work orders, and managing the rent roll. With the advent of building-automation systems and advanced software programs, today's professional spends less time entering data and more time acting on it. "Technology - in the seamless interaction between accounting systems and billing systems for work orders and the rent roll, etc. - has allowed the manager to focus more on managing as a result of the data [vs.] managing the input of data," says Glen Fernald, managing senior vice president of management services, Mid-Atlantic region, Transwestern, Bethesda, MD.
While the profession always necessitated a healthy balance of tactical and strategic skills, individuals may have found themselves spending more time on redundant, routine tasks instead of developing a long-term plan. Fast forward 15 years: Today, there is a real opportunity for property managers to provide greater value through strategic action, thanks in large part to advanced building-system technologies. CAD and CAFM applications, energy-management systems, and financial software (just to name a few) have boosted the productivity of the typical property management professional. "The last time I measured it, we had tripled our productivity," explains Gary Merron, senior managing director, global financial management, Cushman & Wakefield, Philadelphia.
As functions became increasingly automated by technology applications, the level of skill demanded from the property management staff increased. "There are almost no positions in the industry that you can hold without at least a rudimentary knowledge of technology," says Merron. Professionals who are quick to see the value of new technologies and rapidly learn the intricacies of new building systems and software have advanced through the ranks faster. "The immediate access to data and the rigor of the applications have been an incredible boon to people starting in this business," says Maureen Ehrenberg, president of global client services, Grubb & Ellis Co., Chicago.
And, through the Internet and intranet sites, professional development and educational training are only a click or two away. Property management firms have made policies, procedures, and handbooks available for reference online 24/7. And, as Tony Long, executive managing director, CB Richard Ellis, Dallas, notes, online publishing is an environmentally friendly alternative to continuously printing updated hard copies.
Even the savviest of firms, however, acknowledge that some face-to-face training is still necessary to be effective. "I learned that the hard way. We really went hard and fast on going totally virtual with our training, and I just didn't see the progress, performance, and interest. So, we've really tried to balance our in-classroom [training] with our Web-based training, because there gets to be a point of diminishing returns," says Jana Turner, president of asset services, CB Richard Ellis, Newport Beach, CA. This is what Turner refers to as a "high-tech/high-touch" balancing act. "The higher the technology emphasis you get, [the more] you have to balance it with higher touch," she says. The accessibility of training means that there is no excuse for an unskilled or uninformed worker anymore.
Impact No. 2: Client expectations are higher.
Owners and tenants are very savvy about new technology and expect property management firms to be just as (if not more) knowledgeable. "Clients are very sophisticated. They understand the industry and they understand the technology [that is] available," says Ehrenberg. Their knowledge has added increasing pressure to property, portfolio, and asset managers, as clients demand more for less money. "What they will pay for [property management] is getting smaller and smaller; what's fueling this is technology. If there wasn't a way for all of us to do [the job] more efficiently, none of us could step up to the plate and provide these services," says Merron. "Because clients know that these efficiencies exist, it allows them to lean on us all. We just have to get cleverer and find a way to do it faster, better, and cheaper."
With the pace of business only limited by the speed of a T1 line or the availability of wireless Internet, building owners expect quick response and even quicker resolution. They want 24/7 access, more data to support strategic plans, and all the conveniences that technology has provided them in their personal lives. "We took that consumer-type behavior and tried to bring it into a business setting for our tenants," says Turner of CB Richard Ellis' online portal for tenants.
Many property and asset management service providers offer tenants a better and faster means to report complaints, make requests, and retrieve basic building information through property websites. Routine tasks like placing a work order are now as simple as visiting the Web. Hines, a Houston-based full-service real estate company, even offers templates for on-site property management staff to use in the creation of a property-specific website. "The property website is a feature that we have designed primarily for use by our tenants. It's also a great marketing tool for our leasing and brokerage professionals," says Ilene Allen, vice president of corporate operations services at Hines. Sites offering everything from traffic and weather information to street closings and life-safety videos are becoming more common. And, after being spoiled by the instant access to information found through Google, it's easy to see why.
Impact No. 3: Service delivery is better.
Property managers and their staff have many tools at their disposal, thanks to wireless technology and innovative manufacturers and software providers. The cell phone and BlackBerry have made it easier to be accessible. CMMS systems ensure that preventive maintenance is never overlooked. Data collected from intelligent building systems identifies malfunctions and pinpoints inefficiencies. The property manager, with his/her skilled staff and high-tech instruments, generates tremendous value for the client now. Property managers now do more than run the building - they manage tenant relations, extend the life of building systems, and identify cost-saving efficiencies that benefit both tenants and owners. And, that is merely the beginning.
What property management firms can offer clients is far greater as a result of technology than the service-delivery offering a decade (or more) ago. Today, many firms are investing in sophisticated Web-based client accounting systems. Through this technology, real estate providers can help clients achieve compliance with the Sarbanes-Oxley Act of 2002.
Technology has even enhanced the ability of property managers to provide security and life safety to tenants. For example, at some of the properties managed by Hines, a passive emergency-communications system has been deployed. The system continuously e-mails or calls each tenant until the tenant acknowledges the message, providing an effective means for communicating weather-related disasters.
When a lamp is burned out on the 54th floor, the work order can be immediately transmitted to the building engineer who is already in the building (two floors below) running preventive-maintenance checks on an HVAC system. "We now have engineers carry a BlackBerry device. Our software allows each tenant communication to go through our system directly to the engineer. The engineer, armed with this data, can respond more quickly," explains Cliff Gann, vice president of operations, Southwest region, Hines. Paper orders are a thing of the past, and property management professionals aren't looking back. "When a tenant calls and there is a specific concern (like maybe it's too hot), an engineer can get on the building-control system and look at the particular area on the floor [to] see what the temperature readings are before they go there," says Jon Cogdill (pictured above, third from left), senior property manager, Hines. "The advantages are that the tenant's concern gets taken care of faster, the engineers have better information, and [engineers] can monitor the situation and correct it without wasting a lot of time running around the building trying to figure it out."
To get better response from tenant-satisfaction surveys, many property management firms are using the Internet instead of U.S. mail. "We use the Kingsley Associates survey, which is conducted entirely on the Web," says Fernald. Through the Internet, property management professionals can watch the rate of return in real time. "If we're trying to achieve a 70- or 80-percent response rate and, 2 weeks into the process, we're only at 50 percent, the manager can see who hasn't responded and make a personal call requesting their response so that we have a good, true understanding of their satisfaction with our services," he explains.
Password-protected intranet sites have become the ideal place to share best practices and procedural guidelines. "We've developed (and continue to develop) a robust intranet site, which we really use as our best-practices document repository. Managers don't have to look for a standard agreement for a client or a standard procedure for accounting - they just access our online library and it's there," says CB Richard Ellis' Turner. Managers can benefit from the experiences of their peers without having to make the same mistakes or waste valuable time researching the options or approaches to any number of problems. These intranet sites, when loaded with strategies and processes that have proven successful, increase the efficiency and value of the property manager and the services they are able to provide.
Why stop with best practices? Digital records and document management on these sites is equally advantageous. "We've gone from a library to a ‘cybrary,' " says Allen about Hines' centralized records department. In the past, Hines housed its (paper) legal documents in a central vault. Today, a records manager and her staff have implemented a new means of document management by scanning, bar-coding, and tagging every legal document with dates for retention and destruction. This "paperwork" is now online for the company's professionals in China, Houston, or anywhere else on the globe to review. "It has been a tremendous evolution in the way we do business; we never had that type of comprehensive, efficient, and immediate access to documents in the past," she explains. Because documents no longer have to be mailed to be shared, there is a reduction in copying and postage costs. With individual properties following these same procedures, virtually all the information a property manager needs to make informed decisions can be accessed the minute it's needed - and not a moment later.
Impact No. 4: Environmentally friendly buildings are possible - even probable.
Being green has become an increasingly popular aspiration for a number of reasons: it's the right thing to do, global warming is a reality, and energy prices continue to climb. All of these motives are good and, with technology, property management professionals can not only curb wasteful practices and save water and energy, but they can also justify the expense of the equipment that will help them do it. Corporations looking to brand themselves as environmental stewards need assistance from subject-matter experts to turn this marketing speak into a truthful message. Real estate service providers can help them "walk the walk" by applying the latest building technology. "I think green buildings will become a reality through the conscientious use of technology," says Fernald.
With the existing building stock numbering in the millions, it will become increasingly important to keep aging facilities operating as efficiently as possible. "Buildings are getting older and older, and I believe that technology will play a bigger role in making them more efficient and more user-friendly," says Turner. Long, Turner's colleague, also sees the potential: "If you think about 50 percent of the building stock that's available today using machinery manufactured in the '80s, the major systems in these building are somewhere between 20 and 30 years old." As they approach the end of their useful lives, newer, more efficient, environmentally friendly equipment with improved data collection, intelligent digital technology, and the capability to reduce carbon emissions will be installed.
Building-automation systems are just one example. These time clocks of old can now respond to the conditions they measure. "They don't require input from anybody - they are reacting to data. That is a huge change," says Fernald. The information they capture is invaluable as property managers make a case for retrofit projects or new equipment purchases. When energy savings can be predicted accurately, retrofit projects are often expedited. "It has allowed the property manager to measure the return on investment much more accurately," says Ehrenberg. "And, in a managed property, if you can show a return on investment as a capital expenditure, you can actually charge that back to the tenant. That's a value-add to the investor. It's a benefit to the tenant as well because their operating costs will be reduced."
Impact No. 5: Professionals are no longer tethered to their desks.
Use of wireless handheld devices and cellular phones facilitate frequent communication that doesn't require professionals to spend all hours of the day (and night) in the office. "Now, when we give an engineer ‘weekend duty,' his/her need to drive back to the building is less frequent than yesteryear," says Gann. "Now, [he/she] can carry a laptop computer that has the capacity to communicate with and control the building's energy systems." Remote monitoring means that property management professionals can stay attuned to building operations from anywhere at any time. In theory, technology can also help these same professionals spend less time in the office and more time in front of clients. "Management staff should be visible at the building, speaking with tenants, conducting inspections, and participating at industry meetings. Whatever they're doing, they need mobility," stresses Ehrenberg. Real estate is still the relationship business it used to be - that remains one thing technology hasn't changed. "Things go faster and take less time and less bureaucracy when there is a fundamental respect and trust between two parties," says Long. Turner agrees, adding, "I don't think you build trust over a computer screen." Technology is an enabler that, when applied appropriately, can make for better service, greener buildings, and savvier professionals; however, it alone cannot make the client happy. "Our tenants depend on us to provide them with a pleasant, safe, and efficient working environment," says Fernald. "That has to be the responsibility not of technology, but of the management and engineering staff at each building."
Jana J. Madsen ([email protected]) is managing editor at Buildings magazine.