Owners search for every possible opportunity to maximize the value of their properties. A growing number of owners recognize the potential in property and tenant management technology to help them achieve this goal. Rather than view these as tools only of concern to property managers, savvy owners recognize that operations management platforms can help them boost the value of their assets and are increasingly making the decision to adopt and standardize on platform.
A number of trends are driving owners to gladly assume the cost of these tools as the expense is negligible relative to impact on asset value as the technology easily pays for itself over and over again.
- First, the investment community is seeking more data about the operation of assets. According to Tim Donahoe, Senior Real Estate Investment Advisor for Morgan Stanley Smith Barney and Citigroup, investors want to know how a property is maintained. They want to see that it is operating efficiently on a day-to-day basis, and that it is proactively managed consistent with the investment goals for the property.
- Owners still have a post-crash approach of operating their buildings as efficiently and effectively as possible to help increase Net Operating Income (NOI). At the same time, tenants look for properties that are professionally managed that provide access to robust online and mobile tools to access information from the property team and allows them to manage communications and other daily interactions.
- Donahoe also emphasized the need to properly manage operational risk. This requires support from processes and online systems to insure compliance with Certificate of Insurance (COI) requirements for tenants and service providers at a property. He stresses the need for a single location that shows and manages compliance with life safety issues, code requirements, and health inspections, to name a few. The same is true for incident-related documentation.
- Moreover, it can still be a challenge to get deal financing with stricter due diligence required. Underwriters are concerned about issues such as deferred maintenance and prospective buyers want to see records and data on as many areas of operations as possible.
Combined, these factors have prompted property owners to demand transparency and a desire for real-time information for the properties in their portfolio. Access to operational data in a single, online location is critical to achieving this goal. Today’s savvy owners recognize the value of technology that provides visibility into their assets and helps them operate more efficiently and effectively.
With advanced property management technology that provides unprecedented visibility into building operations, building owners gain real-time insight into which property teams are most effective. Plus, with software that operates more like customer relationship management (CRM) systems, they get more visibility into tenant satisfaction and potential causes of attrition, empowering them to be more agile, flexible and responsive than ever before.
Specifically, such a system can lead to higher NOI of the owner or investor’s asset by making it possible to:
Provide superior service and increase tenant retention.
By applying new technologies and best practices, property managers can more efficiently manage buildings while delivering better service to tenants – all with fewer employees on site, leading to fewer pass through expenses. In fact, according to Ellen Z. Darling, Executive
Vice President for Zimmer Real Estate Services, L.C., the cost for such a solution from Building Engines is so low, it is essentially a pass-through expense to tenants. At the same time, tenants can submit requests online, track progress of the issues in real time, and provide instant feedback on any work. With all information captured in a central location, it becomes easy to track trends in tenant dissatisfaction and proactively address issues to keep tenants satisfied.
Extend equipment life.
Support for preventive maintenance ensures that maintenance-related tasks are automatically created and relevant information is captured and tracked. Regular, documented maintenance extends the usable life of expensive equipment and heating/cooling systems. Plus, as common area maintenance charge decreases, overall building rates go down, making the property more attractive to tenants –and to investors and prospective buyers.
Maximize capital investments.
With advanced software in place, it’s possible to spot trends in equipment malfunction. That ultimately leads to better financial insight into replacement time frames and costs, allowing owners and investors to plan strategically for future expenses.
Reduce liability/insurance premiums.
Advanced tools and processes can prove effective in lowering insurance rates. By using Building Engine’s risk management tools Beacon Capital Partners, a property owner, scored a 96% on Liberty Mutual’ s High-Cost Study for Property Managers (about general liability claim prevention). This led to being granted the prestigious Gold Star Award and a reduction in its insurance premiums.
When sellers are prepared and can readily provide information related to building operations, property values may rise and transactions can be accelerated. Selling a property is much easier with a centralized history of maintenance, property performance, and other details that demonstrate the value of the building.
Tapping into newfound visibility, managers and owners can see operations management in a new way and apply services, efficiencies and tactics that allow them to extract maximum value from a building. Essentially, today’s technology has made data more actionable than ever, which translates into cost savings and new revenues.