Building & Facilities Operations

Tailgating is fun, right? Football, food, family, friends… forgive the alliteration, but what’s not to like?

Rewind back to real estate mode and you’ll see that tailgating doesn’t reference weekend football pleasantries, but instead the potentially dangerous outcomes of undocumented building entry. This sounds like it should involve stealthy espionage activity on behalf of the intruder, but undocumented entry can be the result of something as innocent as holding the door open for the person behind you.

There are strategies, though, to protect against undocumented entry. According to an article in Buildings magazine by Jennie Morton (10 Strategies to Prevent Tailgating), there are three categories undocumented building entry can be broken down into:

1. The Problem,
2. The Solution
3. Building the Culture

The Problem is simple to understand. Tailgating can expose your building to things such as domestic violence, theft, sabotage, and terrorism… to name a few. Additionally, think about the areas inside buildings that require restricted access. There are some places where you really do not want intruders such as laboratories, pharmacies, operating suites, equipment rooms, and data centers. Morton explains how you may want to restrict and track who can access valuable equipment, sensitive files, or toxic chemicals.

Still not convinced that tailgating is a problem? Morton says to “consider the security measures you’ve already implemented.” For example, Warren Rosebraugh presents the idea that if you already have a security system installed, you think that the building’s contents are important enough to protect in the first place. So then why would you let people move around the property freely anyway?

The Solution is made to seem simple by Morton as well. Building owners can choose to implement one, or a combination of, these ten security solutions:

1. Smart cards house multiple credentials on one card.
2. Security guards can visually confirm a badge matches the holder.
3. Turnstiles serve as a physical barrier and are good for high-volume traffic.
4. Laser sensors can detect multiple people.
5. Biometrics deter employees from sharing credentials.
6. Long-range readers can be used in parking lots and garages.
7. PIN numbers can be added to card readers.
8. Camera analytics enable remote facial recognition.
9. Visitor badges ensure temporary guests are documented.
10. Man traps or air locks require a double set of identification.

Finally, Building the Culture can be the most difficult category to implement. Installing the most advanced security systems on the market is all well and good, but what if the occupants of your building aren’t on-board with your enhanced security plan? This can detract from every measure in place. Morton says you need to “create a secure building culture.” Use clear expectations and consistent communication in order to shape behavior.  Make sure your occupants are aware of tailgating risks and keep them empowered to challenge any unfamiliar faces.

If you’re looking at all of this and feeling overwhelmed – take a deep breath… Jennie Morton is here to save you again. In another Building’s article (4 Tips for a Corporate Security Plan), Morton gives 4 clear-cut steps to installing or updating a security plan.

1. Provide a Standard. Ensures that a location hasn’t overlooked a security concern.
2. Circumvent Liability. You need documentation in place to prove you’ve taken appropriate action.
3. Avoid Micromanagement. Make sure your plan’s requirements are broad enough so they can be adjusted.
4. Rely on Experts. Don’t forget to take advantage of security professionals who interact directly with your buildings.

Thinking about making your building secure doesn’t have to feel like a heart attack. By following simple steps and implementing plans that your occupants can respect and uphold you’ll be able to keep everything under control and, most importantly, safe. Think about it this way: confusing your building lobby with the parking lot of the “big game” is probably not what you want to happen.

I recently discovered an interesting new insurance product for the small owner Multi-family market that allows private landlords in the U.S. rent default insurance. It may be hard to understand the excitement behind this new offering, so let me paint a picture for you:

Three kids in college, the economy, a mid-life crisis car, digital cable (with HBO added on, of course), utilities, holidays, etc. The list is extensive! It’s going to be a tough year to go to the lake house. Gah, the lake house! There’s another expense to add to the list. Wait a minute… the lake house. We don’t need to go to the lake house, but someone else could! There has to be someone out there willing to rent my second home. Here I go, time to find a tenant…”

This thought process could be the catalyst to someone’s shift from owning a second home to owning a residential investment property. Great idea – renting out one’s investment property can yield rental income of potentially great value to the owner. So, say our protagonist from the beginning is named Jim. Jim finds someone he thinks will be a suitable tenant for his lake house property. Sure, this guy looks a bit sketchy, wears a dirty white undershirt covered in Doritos, and doesn’t seem to bath often, but Jim needs the money and the lake house has been more of a fund-guzzler than a leisurely retreat for his family. This tenant will do.

Things are going well with Jim and his rental property, until after a few months, Jim’s tenant stops paying rent. As the residential landlord, Jim is now losing his much-appreciated monthly income. There’s no money coming in and money still going out for ongoing property expenses. Essentially, this is turning into a severe financial problem for Jim. What is Jim going to do? Putting aside the more illegal, painful, and/or mob-affiliated options, Jim turns to Aon Affinity and their rent default insurance.

Through a group effort with ARS and GRIP Solutions Advisory carrier partner QBE Insurance Group, Aon Affinity has created  Aon Rent Protect insurance so that landlords, like Jim, don’t have to worry about financial terrors resulting from deadbeat tenants. Rent Protect was designed to reimburse up to six months of lost rent which puts Rent Protect in a league of its own in the U.S. when it comes to protecting individual landlords against rent default.

And hey, don’t feel bad about the premium subscription to HBO. We all know how hard it is to crack a severe addiction to Entourage.

Inspiration. Drive. Will.  These words represent traits we seek to find in ourselves and find admirable in others. They are also part of the “stuff” we believe helps define America; its people, accomplishments and history.

My sister’s close friend is the co-creator of a musical she is working around the clock on with a talented and committed team to bring to Broadway. The show is called Empire the Musical and is the inspirational story about the architect who designed the world’s tallest building (at the time,) the financier (John J. Raskob,) the Mayor of New York City (Al Smith), and the workers who drove the project through to completion against the backdrop of the Great Depression, and many other monumental and seemingly insurmountable odds. – There’s also the requisite love story in there as well!

This creative team has been working for over 8 years to bring this story to a Broadway stage. That kind of determination and the Empire State Building’s story is the embodiment of inspiration, drive and will.    - An argument can be made that Empire State Building is the most iconic structure in the United States and a powerful symbol of the American spirit that helped pull the nation through one of our most turbulent periods.

As we face our own turbulence and uncertainty today, it’s comforting to look at symbols like the Empire State Building and the story behind it as well the many examples around us to know that the American spirit and inspired people with will and drive are undeterred.

I’m looking forward to opening night.

If tenants are the heart of a building, than the structure and equipment in that building is its lifeblood.  Without properly functioning systems, costs will rise, tenants will become dissatisfied and the property will degrade. Over time it will lose value and become less of a viable entity.

Much like your body needs proper care, nutrition, and regular check-ups, the equipment in a building needs the same.  That is the fundamental principal behind the need for a preventive maintenance program.

This certainly isn’t a new or revolutionary concept. However, truly successful PM programs are often perceived as hard to implement and manage in the commercial real estate space.

The reasons for that are fairly obvious:

1.       In a business driven by the issue of the moment, a PM program is a long-term investment with a difficult to identify return.

2.       There may be a short-term investment strategy that conflicts with the long-term nature of a PM program.

3.       The PM program requires knowledge and expertise owned by a few.

4.       Relevant and important information is difficult to access.

5.       There is no visibility into activity, problems and results.

6.       Electronic or online systems that promise to simplify the PM process are often overwhelming, complex and difficult to implement.

7.       Staff is overwhelmed and resists the input of sufficient data necessary to realize full system benefit.

So what is required to implement a PM program that delivers results?

Belief

Everything must begin with an underlying senior management belief that a successful PM program is a core strategic objective.

Management Will

There will often be pushback from teams and there is a change management component to the implementation.

• The most common complaint will be lack of time to input what maintenance teams will portray as a huge volume of information to input.
• This cannot and should not be a manual operation any longer. True efficiency requires automation of the PM process.
• While good systems will help, at the beginning, this is a project that must be managed.

Cooperative Teams

• PM is everybody’s concern and should not just be relegated to the maintenance staff or outsourced providers. The maintenance team needs commitment and help from management to do their job well and deserves input into the program.

A system that works for you

There are many available system choices to consider and evaluate. Ease of use and system reliability should be a given.  The critical evaluation factor should be to find a system that is designed to help you accomplish your specific PM objectives.

Guidance from knowledgeable partners.

Much like the internal requirement of a cooperative team, your system provider must be committed to a long-term partnership far beyond the initial sale. You will require expertise and knowledge from them about what it takes for a successful implementation.

As we wrap up 2010 and prepare for the New Year, this is time of budgets, planning and resolutions.

Make a resolution to commit time to evaluate and plan for the long-term health of your building by taking a long, hard look at the condition of your preventive maintenance program.

You learn plenty of lessons in life if you’re fortunate to stick around long enough.  One of those lessons is that there is often no replacement for the value of experience and the accumulated knowledge that comes along with it.

I was reminded of that today by a line and key plot element description in the Wall Street Journal’s review of the movie Unstoppable… “Unstoppable” is not only a prodigy of kinetic energy, but an eloquently understated tribute to working men and women who do their jobs well… and to older workers with irreplaceable experience…”

Working with real estate owners and managers has allowed me the opportunity to meet many terrific people with tremendous experience and knowledge that just cannot be easily replaced.  I think of people like the chief engineers who know every inch of the buildings they work in like the back of their hands and the tenant coordinators who know each of the tenant office managers and key executives on a personal level.  They are often people who have stayed with the building  though ownership changes and transitions.

In addition to valuing their experience and considering these people as a significant resource, it is critically important that you do everything you can to retain their accumulated experience where possible.  One of the ways to do this is by providing your people with the right technology and tools that not only make their jobs easier to do, but serve as data collection repositories so that you retain that institutional knowledge. The goal is never to replace people, but to make them more effective by letting them leverage their experience by allowing them to focus on higher value activities.

Knowledge retention is often regarded as a “fuzzy” concept. It’s difficult to quantify, but there is a very real and significant cost of having to retrieve, or rather, re-create from scratch the information acquired through years of work and experience that exists in the heads of your people.    This is one of the key and most important benefits of platforms like Building Engines.

This is not a new axiom, but one that is worth revisiting. It seems to be particularly important for these trying times in the real estate industry where tenant retention and attracting new tenants is first and foremost on everyone’s minds.

I was reminded of this recently when I read an excellent article by our accounting firm, Braver, who also happens to have a substantial regional real estate client base.  The article was entitled Turning your Most Knowledgeable Real Estate Employees into your Best Marketers.

In the article, they outline 5 ways to connect your employees through communication tools to help them become your “most passionate and enthusiastic spokespeople.”

We certainly adhere to these principles at Building Engines.  We place a premium value on customer service and making each and every interaction with a client a positive one; not only is it the way we believe in doing business, but we also know that our customer service effort pays dividends in the form of referrals and reference-able, happy customers.

But we don’t stop here. We require each member of our team, including developers, product managers and admin personnel to answer phones, to interact with and to get to know our customers. We encourage participation in BOMA and other industry events for everyone and share information internally through systems and social media tools.

We believe wholeheartedly in the “every employee is in sales” mentality and by connecting everyone here to each other and our customers, have seen irrefutable proof of the power of that concept.

Photo courtesy of Bisnow Media

Building Engines sponsored the Bisnow Boston State of the Market event on Thursday, September 30 at the Marriott Copley Hotel. The outstanding event,  put on by Bisnow Media, attracted over 1000 of the region’s real estate professionals and included two panels of the most successful and accomplished leaders of the local market.

The experts were fairly optimistic about the pending recovery and the Boston market in particular, driven by the knowledge-based economy and the continuing need for entrepreneurial space.  The CBD is in better shape than the suburbs for the most part and they liked multifamily and retail as investment opportunities. While leasing activity is up from last year, they remained cautious that the key to any real return to growth is job recovery.  Additionally, there is the looming (2012) maturing debt crisis to deal with. Most, however, seemed to feel that the Boston market is at or near the bottom.

One comment reiterated and confirmed by several of the panelists is that those who operate well will be best positioned to both ride out the storm and attract buyers for their properties.  This is clearly the era of the property manager.

As National Preparedness month continues across the country, property owners and managers follow guidance and suggested best practices delivered thru top 10 lists from partners like Building Engines (10 Best Practice Points for Property Team Preparedness) or BOMA (Preparedness Top Ten List for National Preparedness Month.) The question is, who is preparing adequately for the Black Swan Event?

In his 2009 book, The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb, the author makes the case that business owners and risk managers place too much weight on the odds that past events will repeat.  Instead, the really important events are rare and unpredictable. He calls them Black Swans, which is a reference to a 17th century philosophical thought experiment. Nassim argues that most of the really big events in our world are rare and unpredictable, and therefore, trying to extract generalized stories to explain them may be emotionally satisfying, but it’s practically useless.

In an October 2009 Harvard Business Review article entitled The Six Mistakes Executives Make in Risk Management,  Nassim and his co-authors summarize the primary points of his book and their research in the following manner-

Six critical mistakes that many executives and risk management professionals make in risk management:

1.       We think we can manage risk by predicting extreme events

2.       We are convinced that studying the past will help us manage risk

3.       We don’t listen to advice about what we shouldn’t do

4.       We assume that risk can be measured by standard deviation

5.       We don’t appreciate that what is mathematically equivalent isn’t psychologically so

6.       We are taught that efficiency and maximizing shareholder value don’t tolerate redundancy

They continue by presenting 6 answers or solutions to those mistakes:

1.       Instead of calculating the odds of whether things will happen, rather think about what you will do if they do happen (This is your response planning!). People who can handle one type of crisis, always have the potential to handle many types of crises.

2.       Hindsight can never be converted into foresight. Lessons should be learned from the past, yes, but the past should not be used to predict the future.

3.       A dollar not lost is a dollar earned, and preventing losses is perhaps a better strategy than gaining profits, and risk management activities are in fact profit-generating activities. There is no separation.

4.       Statistics is a complicated science and the often cited standard deviation is not average variation, but the square root of average squared variations. Although in a perfect world of randomness, most events fall within the -1 and +1 standard deviation, in real life (“Black Swan”), movements can easily exceed 10, 20 or 30 standard deviations. (…This is what your real exposure can be.)

5.       In absolute quantified numbers, two events may be equal, but subjectively, in a group of people, the same event may have very different value to each of them and may be understood entirely differently.  After all, number are just numbers, feelings, values, and risk acceptance are not so uniform. (…This is the real risk to your business.)

6.       Optimization of processes makes them vulnerable to changes, but robust processes can survive change.

There are no shortage of Black Swan events we can point from the past decade that have impacted the real estate ownership and management community.  Make sure that you give some thought to how you can apply some of these principles to your risk management plan during National Preparedness month.

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

Best Practice Definition

Methods and techniques that have consistently shown results superior than those achieved with other means, and which are used as benchmarks to strive for. There is, however, no practice that is best for everyone or in every situation, and no best practice remains best for very long as people keep on finding better ways of doing things.

~ Source: BusinessDictionary.com ~

Where do we go to find best practices? It’s a question most managers have asked themselves at one time or another.  At some point, we recognize that we don’t always have the answers we need for improving operating performance.  And with that recognition comes additional questions about where to look to get those answers.

Finding the best, and most relevant, sources for our particular problem can be challenging.  While there is no shortage of access to information these days thanks to the Internet, the volume we have to wade through can be daunting.   In addition to the Internet, there are industry associations, various publications and people we know whose opinions we trust and value.  I think one of the most overlooked sources of information on best practices is often right under our very noses, and that is the service partners that we work with every day.

We recently hosted a Webinar for our clients: “Field Service 2.0: Bringing Best Practices To & From the Front Line…Everyday.”  The webinar featured a company, UGL-Unicco, that provides facilities and maintenance services to the real estate and facilities management space.   While it would be easy to classify UGL-Unicco as a “cleaning company” at its core, that would be simplistic. They are an international powerhouse, a market leader in their space and are as sophisticated in their operations and business practices as any of the companies they serve.  They have achieved their place in the market through a relentless commitment to continuous improvement and managed the change required to support it.  They have successfully created a system for scouting  pockets of excellence and best practices from across their organization, as well as a means for sharing them with any of their clients to apply to many areas of their own businesses.

And the effort has certainly payed off.  In an industry where companies change vendors more than clothes, UGL boasts a 95% client retention rate.

The real beauty of looking to your suppliers for guidance on best practices is that it is in their best interests to help you- and doesn’t that help define what a true partnership with your service providers should look like?

The next time you have an internal discussion about process or business improvement and you are making your list of information and other resources, don’t forget to look internally and consider involving your service providers in the discussion.  Sometimes the answers are right under your nose.