Building & Facilities Operations

There is a scene in the movie Field of Dreams when the voice that originally convinces Ray Kinsella (Kevin Costner) to turn his cornfield into a baseball field now instructs him to “Go the Distance.”   Ray was feeling somewhat pleased with himself at this point in the movie having built the field and locating Terrance Mann (James Earl Jones,) but there was still work to be done in order to realize the ultimate vision, and he needed just a little more prodding to get there.

I thought that this was the same situation as I read through both the BOMA 360 certification program life safety components and the recommendations in the National Preparedness Month notice on how property professionals can maximize preparedness.

Both the programs and recommendations are excellent and go a long way toward helping guide property professionals with regard to what they need to have in place in terms of emergency and risk management guidelines, processes, manuals, training, etc. But, owners and manager need to understand that creating and documenting alone does not mean the objectives of risk management and preparedness have been fully met.

In order to “Go the Distance,” professional owners and managers must also:

• Effectively share and make the information available throughout their organization-  This means that it cannot exist in manuals on someone’s shelf, or in documents sitting buried on a network drive

• Make the information actionable

• Educate people (employees, tenants, vendors/service providers) on how to implement and ultimately execute on all of the procedures they have put into place.  You don’t want to be practicing this stuff during an actual event or emergency

This is extensive process that requires commitment, and often a partner, to help guide you and support your teams.  There is little question that effective and well thought-out risk management and preparedness plans are essential components of today’s property management reality, just make sure you Go the Distance so that your efforts deliver the Field of Dreams you’re hoping for.

Related resources you might be interested in:

On-Demand Webinar- Managing Risk & Life Safety With Effective Pre-Plans

As the summer winds down and we begin to brace ourselves for the uptick in activity come September, I came across this piece in R&D.com about scientists at MIT using a virus to assemble more efficient, more green batteries.  The problem with batteries is a vexing one: in order for our economy to move beyond petroleum (particularly for transport), which has incredibly high energy density, is inexpensive and easy to transport, we need to find a more efficient way to store electrons.  Electrons are weightless, but conventional batteries are not; hence the problem.

‘”Using M13 bacteriophage as a template is an example of green chemistry, an environmentally friendly method of producing the battery,” Allen said. “It enables the processing of all materials at room temperature and in water.” And these materials, he said, should be less dangerous than those used in current lithium-ion batteries because they produce less heat, which reduces flammability risks.’

Amazing.  Now I know that technology is not an unalloyed good and that progress should not be embraced without question, but I do find it remarkable that to read about things that researchers are working on today, that may only begin to affect society 10, 20, 30 years hence.  The Internet was conceived of in 1973, rolled out in 1983 and really only began to shake things up in the late ’90s.  The transistor was invented in the Bell Labs in 1947 but it was its minaturization in an integrated circuit in 1959 that really accelerated change. And then powered the personal computer (and the Internet).  The rest, as they say, is history.

The Green Movement in Real Estate is growing darker.  All new certification schemes, like all new growth, have that light green tinge when they begin that denotes suppleness. While it makes them amendable to change, it provides little armor when the going gets tough.  As a result, many rating systems mature to a darker shade.

The USGBC’s LEED rating system is by far the most recognized and most used green building rating system in the world and the UK’s Building Research Establishment Environmental Assessment Method (BREEAM) is frequently used in Europe.   As standards like LEED and BREEAM mature, that light hue darkens to a more serious and robust one – characteristic of maturity and staying power.  According to Pike Research, that day has come.

Pike projects that by 2020, 53 billion square feet of space worldwide will hold some type of green building certification, up from 6 billion this year, and 73 percent of green-certified building space is in a commercial building – a number expected to grow to 80 percent by 2020.   The majority of green certifications will be held by existing buildings instead of new construction, the report says.  One American Row in Hartford, CT recently obtained Leadership in Energy and Environmental Design for Existing Buildings Silver status, making it one of the few LEED-EB certified buildings also listed on the National Register of Historic Places.

The bigger question is how a building maintains LEED certification status once it has achieved it.   Without a comprehensive scheme for posting and managing LEED related tasks – the lifeblood required to sustain any certification level – that LEED or Green status will fade to brown and join the detritus of other failed programs.  Technology – operations management systems that post and sustain LEED related tasks throughout the year are integral to maintaining LEED status.  Keeping it Green and maintaining affordability requires energy and organization as well as robust data collection, communications and reporting.  Think of these systems as the arterial system for your LEED targeted building management practice.

Without one, your LEED status will die on the vine.

“Any sufficiently advanced technology is indistinguishable from magic.” – Arthur C. Clarke

The commercial real estate is not an industry that adopts new technology aggressively; in fact I think you could say we are late adopters.  As someone who works in the software space, lives in Silicon Valley and serves the real estate community, I am especially aware of this.  However, the industry is changing, even if slowly.

I was reminded of this when I had lunch recently with a friend with whom I had worked on large portfolio acquisitions at the end of the last real estate bust, almost 20 years ago.  Hard to believe but back then a big number was $250 BN (the total cost of the S&L crash to tax payers), which seems like chicken feed now.  Our largest deal was in the $750 MM range and we thought it was huge, absolutely huge – that now seems almost laughably small.

We sent teams of underwriters around the country looking at assets and assessing their value.  Each was given a map of his/her target city, with colored dots locating specific properties.  Local market knowledge was difficult to come by – you had to work the phones hard to find brokers who would talk to you about the market and divulge any of their hard-won information.  Values were calculated on paper work sheets using a pencil and simple cap rates (the underwriter could us a calculator if necessary but the “real men” did the calculations in their heads.)

We had big, clunky cell phones that were so expensive they could only be used when urgent.  Our SWAT team on analysts ran Project and Argus on clunky, green screen computers that seemed to be constantly choking on the data they had to crunch. Talk about illiquid data!

So, things have changed some in our industry.  One of the changes is the radically increased information liquidity.  It is just a lot easier to figure out who has leased what space at what rate or what price a property has traded at now than it was 15 – 20 years ago.  This may be part of the reason that the crash in the CMBS market we were all expecting, didn’t happen.  As this Fortune article details, the market is bumbling its way through the downturn without completely collapsing.

Information is often still stuck in silos, but it is a lot less stuck less often than it used to be.  We may curse email and the fact that our Blackberries have eliminated whatever downtime we used to have but they have radically improved communication.  The use of fax machines is  declining precipitously and, although we still manage a lot of paper, we are learning that scans of documents are much easier to manage.

It is time in this blog post for me to hold forth on what the future will bring, with respect to real estate and technology.  I think the biggest driver of change over the near term will be peoples’ expectations: folks now expect to be able access real time data from multiple properties easily, summarize it and analyze it and be able to view it anywhere. Web-based operations and maintenance management systems are now offering one solution. Interestingly, this expectation is being driven by their experience as consumers – real time data about flights, purchases, shipping and financial transactions is now almost ubiquitous in the consumer world.

The second big driver of change will be a generational shift: the next generation of workers, folks that will take our jobs, is growing up in a data-rich, highly connected environment.  They will be comfortable with and will expect access to highly liquid property data; silos will not be an option.

This is all going to take time- longer than folks like me expect, but faster than you might imagine. And its effects will be profound.

It can be very frustrating when you don’t see eye to eye with someone.  Whether it’s a difference of opinion between friends, an argument between rivals, or a dispute between a vendor and client, when people are not in agreement, tempers can flare and emotions can get the best of almost anyone.  Before blowing off the handle, it’s important to think carefully about the big picture and not jump to rash decisions.  In moments of adversity and frustration, try to think of these 5 simple rules:

1)      Consider all the Facts

 Don’t jump to conclusions before having done all the necessary homework to see the big picture and understand all the variables.  Don’t rush…make sure that you’ve considered every angle and have all pieces of the puzzle before you try to put it together. 

 2)      Picture the Problem from the Other Person’s Point of View

 Really try hard to put yourself in the other person’s shoes and imagine what you would say if you were being dealt the information or pitch that you are about to deliver.  Is it believable?  Would you be amendable to what is being proposed?  Don’t forget to really listen to what the other person has to say.

3)      Make Sure You’ve Explained Yourself Well

Your argument or point of view may be so obvious to you and so well thought out in your head that you might not take the time to calmly and slowly explain your opinion.  Most people assume that everyone is following point #2 above – they probably aren’t.  If you find yourself hitting a wall…stop.  Take a deep breath and declare that you are guilty of not explaining yourself well.  This admission of guilt will help to bring the other person’s guard down and help you to work cooperatively rather than antagonistically 

 4)      Sell Your Opinion

 Remember that you want your opinion or point of view to be adopted by your adversary.  A little salesmanship goes along way when trying to get your point across.

 5)      Compromise

In many situations a perfect solution for both parties may not be possible.  Compromise is an important element in order to arrive at a resolution.  Remember, it’s better to get 80% there than to walk away mad.

In the end, you aren’t always going to see eye to eye with everyone, but with a little hard work and a lot of patience, you can almost always get close.

Much of the value we promise to deliver with our products and services revolves around the concept of helping our clients become “more efficient.” It’s a phrase we use liberally, but what does it mean and where is the real benefit to any organization?

Property or facility managers and their staffs need to manage and complete a large set of common, repeatable tasks on a recurring basis.  These include such things as lease related notifications, generating tenant statements, responding to and managing requests for service, scheduled maintenance, risk management processes such as tracking certificate of insurance compliance, and a host of others. These tasks are fundamental to the operation of any property, representing the blood supply for  successful operations.

The challenge for property operations professionals and their teams is finding a way to keep up with this large volume of required, repeatable tasks while reacting to the host of unforeseen occurrences that invariably pop up on a daily basis.

I recently returned from the BOMA annual conference in Long Beach and had the opportunity again to observe and listen to the things our clients deal with. Although they were away from their properties, they were constantly tied to their Blackberries and dealing with a never ending stream of unforeseen and unplanned-for events:  cut telephone lines, power outages, bad weather, crime, accidents, etc…the list goes on.  The image of the property manager as a fire fighter is one that truly fits.   But like a fireman, these are the issues that require training, experience, knowledge and skill.  They are the daily occurrences that require people, not systems and is where the effective manager and team shine.

The problems that arise out of these realities of operating and managing a building and those inevitable unforeseen events are that they constrict the time and energy available for the mundane, repeatable tasks.  These things that are necessary for a healthy property are often pushed aside, delayed for another day, and handled incompletely or inaccurately.  In addition to the fact that these tasks generally represent less than fulfilling work for any employee, the inconsistent completion and management of them is unhealthy for any organization.

The way to approach this reality is to ruthlessly automate the mundane.  Cut a 12 step process to 6.  Look at every set of rote activities you can that don’t require real thinking and use a technology solution to streamline them where possible.

Finding solutions to help you do this is the easy part. Finding the right provider to help you understand where you can make improvements is bit harder. The hardest part of all is understanding where your value and your team’s value truly lies, and making the decisions and commitment that will allow you to spend more of your time doing that. That is what efficiency is all about.

The Internet is changing the way we interact with one another and the way that companies communicate with their customers. In the software world, this brave new frontier is known as Social CRM whose power is described in this white paper by the Altimeter Group.  The idea is new enough that Wikipedia doesn’t have an entry on it.

Simply put, companies selling products and services (e.g. the owner/manager of a property leasing it to tenants) used to manage communication with their customers in a fairly linear, systematic, top down manner.  Back in the day, the building manager would create a form letter about a specific issue and mail it out to tenants.  Then, thinking that regular contact might be a good thing, the manager created a newsletter and mailed it out too.  Along came email: the building manager generated the same documents in electronic format and sent them out to the building tenants.

This is changing: the social and collaborative nature of the web means that companies no longer drive communication and are losing control of conversations with their customers: if I have an problem with a piece of electronic equipment, I no longer call customer service, I Google the issue.  I may end up on a forum with all sorts of candid (and not all positive) comments about the equipment in question; its supplier controls none of this.  Sounds a little anarchic, a little chaotic.  Like the web.

One of our clients owns and manages a major, class A office property in a secondary market.  A while ago when you Googled the property, the first item that popped up in the search was a very negative review of its parking by a consumer on Yelp, the crowdsourced review web site.  Not a good way for someone to find your property.

Owner/managers will have to learn to manage social media and leverage the technology to communicate with their customers (tenants).  Or be overwhelmed by it.

Next week, we will attend and exhibit at the Building Owners & Managers Association (BOMA) 2010 International Conference in Long Beach, CA. This is our 8^th year at the event which serves the primary market we operate in.

When everything these days is driven by a need to justify expenses and deliver an ROI, there is a lot of discussion within the marketing departments of any business on the value of attending and exhibiting at association trade shows. There is a substantial cost both in real dollars and resource focus for a company to attend these shows.  In addition to the direct costs, there are opportunity costs.  Where else could you be spending these dollars and your time to more effectively reach your target audience?  These are valid concerns that should be evaluated.

However, that hard dollar evaluation doesn’t account for the ancillary benefits you receive by attending and exhibiting at a trade show.  There are also intangible costs for not attending that should be considered, including:

• Meeting your customers in a “neutral” environment and having the opportunity to get to know them on a personal level.
• The value of having many conversations in a single place.
• Seeing what your competitors are talking about.
• Meeting and developing relationships with potential partners.
• The possible perception created by not being there.
• Hearing firsthand what the issues are that your clients and prospective clients are concerned about.

A perfect example relates to the last point and being in the “know” in regards to client and industry concerns. We know that difficult economic times, coupled with an overall emphasis on “Green” operations over the past several years,  has lead many of our clients to consider energy data management systems to help them understand and better control their energy costs.  We have worked to support that effort by sponsoring a recent Webinar presented by eSite Energy on “Energy Management Systems that Reduce Costs”  and have released a White Paper this week called “It’s all about the Data: Demystifying Energy Data Management.”  Additionally, we have partnered and integrated with companies like Mach Energy for mutual clients like Normandy Real Estate Partners to take their energy use spike alerts and turn them into actionable requests delivered to a building engineer.

All of these actions resulted from conversations and information we picked up attending industry events over the past year.

So, while the hard dollar questions certainly need to be answered and will continue to drive many of our decisions, don’t forget to consider and balance those costs against the harder to measure, but often equally important “soft benefits” of attending and participating in industry trade shows.

1. Google is a champion of individual liberties.
2. Only Apple truly cares about its customers and caters to their needs.
3. The Internet will connect everything everywhere taking data out of silos and increasing efficiency and liquidity

I do not mean winning a new customer, which is normally the primary focus of my job.   I’m referring to a recent project where we helped an existing client improve building security and a tenant service related issue, and solidified (secured) our relationship with that client in the process.   This is equally important to the health of any business…keep the clients you have happy.

The brief background on this project involves a client of ours in New York  (a very large, prestigious property) who uses the majority of our operations and maintenance platform, but was not using our visitor manager module.  They weren’t using it because they had previously installed a very expensive custom integration years before we got there that allowed their tenants to pre-authorize a visitor to the building as well as deactivate visitor passes, enroll new employees for access card activation and deactivate terminated employee’s access cards from the building’s security system. While the process worked, it required multiple applications for both tenants and building staff to use.

Additionally, the integrated configuration they had in place required the visitor system provider to make programming adjustments every time their security system provider made a change or upgrade to their system. This proved to be expensive, unmanageable and resulted in multiple system failures. – With a pending new required security system server upgrade coming, building management knew they needed to make a change and asked Building Engines to help.  Thanks to our terrific engineering resources here and a great partnership effort (which I’ll get into) we delivered a solution to the client that eliminated the need for co-managed upgrades and provided their tenants with a single application to use and a far better user experience.

…We also saved the client a significant amount of money over time by eliminating the annual cost associated with the other application.

The security system provider at this property is Lenel, a UTC Company and provider of the technology-leading “OnGuard” system. Pulling it altogether at the property was Henry Brothers, New York’s leading systems integrator.  In addition to being a complex project, what was interesting about this effort is that it required detailed cooperation from these two service providers.   Lenel & Henry Brothers bent over backwards to help us and the client achieve their objective.  The effort went so well that we joined Lenel’s partner program and they recently participated in our Webinar program and delivered an outstanding presentation free of charge to our audience entitled “Integrated Solutions for Enhancing Building Security.”  We find this kind of cooperation to be rare, particularly when the other service providers are larger and the effort doesn’t necessarily represent immediate revenue for them.  We look forward to the opportunity to work with both of them again.

While it’s great to win new business and that emphasis won’t change, helping existing clients and solidifying those relationships with this kind of effort is every bit as important to our long term health.  It’s also rewarding to work with partners who share the same values and commitment to customer care, service and quality work that you do.