New technologies are making buildings smarter, improving a company’s ability to create not only energy efficiencies but also operational efficiencies while enhancing resident comforts-something the 2017 NMHC/Kingsley Associates Resident Preferences Survey found residents increasingly expect.
But making decisions today for the future is increasingly challenging as more venture capital targets commercial real estate. There are a lot of exciting start-ups and cool technologies, but it’s important not to go down the rabbit hole without a strategy, according to a panel of industry experts at the 2018 NMHC Annual Meeting.
Cris Sullivan, EVP and COO of Gables Residential explained that “smart buildings” are their priority, but not in the traditional use of that term. “The most important thing we can do as developers as we look at future product is ensure our building envelopes won’t attenuate signals,” she said.
“Smart business and smart data only work if we design building envelopes that allows signals to penetrate them,” she added.
Scott Wesson, SVP and CIO for UDR, presented two options for firms in developing their smart home strategies-make it an efficiency play to protect the asset’s value or make it all about customer service. Firms need to decide whether they want to deliver buildings where residents can add their own smart home technology or do they want to build out smart units with a back-end network.
“In other words, figure out why you want to do this,” he said. “Is it for the firm or for the resident and then develop your strategies. In my experience firms that try to do both, do both poorly.”
Jay Hiemenez, president and CEO of Alliance Residential, pointed out that different properties may require different strategies. But all agreed that when residents have access to smart home amenities, they are likely to stay longer and pay more.
Both Sullivan and Hiemenez offered warnings, though. “Be thoughtful as you are setting up your contracts. When it doesn’t work, who gets the call?” said Sullivan. “Remember, your leasing agents are not software programmers.”
Beyond the properties, firms are increasingly adopting business information platforms to operate more efficiently. Marcie Williams, president of Rivergate KW Residential, said that understanding customers’ preferences and habits is where technology is headed. Wesson agreed, emphasizing the importance of customer insight data. He said UDR subscribed to the idea that further tightening the feedback loop of the information customers are throwing off will drive profitability.
Alliance Residential has 1.7 billion pieces of information, now we have to figure out what to do with it all, said Hiemenez. He believes the next phases of business information are predictive and prescriptive.
“The holy grail for property management business intelligence is overlaying our data with external data on market conditions to tell us how much we can push rents,” Sullivan added.
Technology may also be able to help with the industry’s number one management challenge: packages. “If the rate of package delivery continues, our properties are going to be mini storage that people happen to live in,” said Hiemenez.
We’ve learned a lot as an industry in the past few years, but the problem is evolving as people not only order more and more of their everyday needs online, but also increasingly also order oversized items that can’t be delivered to a locker.
Sullivan says the ultimate solution is to extricate property owners from these transactions altogether. Residents just want their packages and they want them delivered. Is there a design option that provides shippers with access to the unit that doesn’t involve them actually entering it? With better access control technology, that may be possible.
“Until then, we are talking about replacing pet parks on our roofs with drone parks,” joked Williams.
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