Proptech Needs to Complement, Not Replace, Interaction Between Tenants and Property Managers01/17/2020
Much has been written recently about the ways in which proptech is being utilized by commercial real estate developers and investors seeking to gain an edge on the competition. This past May, The New York Times proclaimed that proptech was doing nothing short of reshaping the commercial real estate sector, which has lagged behind other industries when it comes to embracing innovation. The paper of record forecast that tech tools geared to the way properties are bought, sold and managed were poised to shake up commercial real estate in the same way tech permutations have altered other industries. These include the impact of Uber and Lyft on the taxi business and Airbnb’s influence on the traditional lodging industry, the Times pointed out.
If the overall commercial real estate industry has been slow to adopt new methods, property management is one of the last bastions within the sector to embrace change.
According to the 2020 commercial real estate outlook from Deloitte, tenant experience may be a top priority, but for a majority of those surveyed digital tenant experience is not a core competency.
Respondents, however, recognized that emerging technology not only could improve the tenant experience, but could also increase the operational efficiency of their properties and, thus, lower costs. The Deloitte’s survey found that that 92 percent of the 750 respondents polled planned to maintain or increase their tenant experience-related tech investments over the next 18 months.
Undoubtedly, there is a great deal of efficiency and ease that is provided through property management software systems. At Olive Hill, for instance, the Energy Management System allows us to operate our heating and cooling building systems by suite without having to physically adjust the actual equipment. These systems allow engineering teams to spend more time addressing complex matters involving the overall operations of the buildings’ systems.
We are also in the process of implementing a new tenant service and work order portal within our office portfolio, starting with our property at 520 Broadway in Santa Monica, Calif., located in the heart of Silicon Beach. The portal will address the ease-of-use and convenience that tenants are demanding today by providing information in one centralized online location. Tenants can access and submit requests for services, such as after-hours air-conditioning, access cards, freight elevator reservations, and both tenants and property managers can track the status of inquiries until they are completed. Tenants will also be able to reserve amenities seamlessly online, such as bikes, ping pong tables or putting greens. This provides efficiencies for both sides.
As helpful as these systems are for improving operating capabilities and enhancing the digital tenant experience, they undoubtedly take away from personal interaction between property managers and tenants.
If tenants only connect with property managers though electronic means, they can become alienated and dissatisfied when their needs aren’t being adequately addressed. This is similar to the frustration customers feel when a service line devolves into a phone tree menu that takes them into an infuriating warren of automated choices without providing an actual person to speak to. Irritated tenants, of course, don’t tend to renew leases. Frequent tenant turnover and vacancies can erode profits and destabilize a commercial asset.
To avoid such pitfalls, technology needs to be used in combination with property managers’ traditional skill set and direct tenant interaction. Historically, the biggest challenge for property managers is having enough time to engage with tenants outside of the reporting and system oversight aspects of the role.
When proptech is used in combination with a property manager’s analytical skills, such tools can maximize tenant engagement. For example, if there’s a work order request that keeps getting filed from the same tenant, a property manager can initiate a direct call to the tenant to figure out how best to address it. This could also involve follow-up by both building management and engineering, depending on the issue. In terms of our own tenant portal, property managers can request feedback about building services and perks online or in-person when tenants come to pick up or return physical amenities.
Perhaps it’s best to think of proptech as a “back of the house” tool, much like in a restaurant setting where the expression comes from. The back of the house are the parts of the restaurant that diners don’t typically see, such as the kitchen, offices or storage rooms, which are integral to running the business and servicing customer needs. “Front of the house,” meanwhile, includes the restaurant portions and staff visible to diners, including waiters, hosts, bartenders and greeters that provide direct, personal service that can make or break their experience and, consequently, the business. Property managers need to utilize proptech in a similar way, so that high-tech tools complement, but do not supplant or take away from the all-important personal touch.
Written by Joy DeBacker, Managing Director of Asset Management at Olive Hill Group.
Back to news