portal to innovation

Maintenance deemed a portal to innovation

Senior real estate executives ponder rapid evolution of building technology
Wednesday, October 11, 2017
By Barbara Carss

Maintenance turned out to be a portal to innovation for one of Canada’s most prominent owners and managers of commercial real estate. That outcome wasn’t necessarily the driving objective when Oxford Properties Group introduced its 310-MAXX 24-hour tenant hotline in the 1990s, but both its instigator and inheritor retroactively tag it as a watershed in energy management, data analytics and building users’ expectations of service.

Jon Love, now the CEO of KingSett Capital, but formerly at Oxford’s helm, and Blake Hutcheson, current president and CEO at Oxford, were among a panel of senior executives reflecting on evolving building technology as part of the kick-off to BOMEX 2017, the national conference of the Building Owners and Managers Association (BOMA) of Canada, earlier this fall in Toronto.

“The thing that 310-MAXX did the most, in addition to getting our customer data, was it diagnosed our buildings,” Love recalled.

A process designed to efficiently respond to tenants’ requests for temperature adjustments, replacement of burnt out lighting, cleaning, repairs and security also generated a trove of information about where those issues were occurring. Launched as a 20th century phone line, a platform for online requests was added in 2000.

Each subsequent iteration of technological advancement has been a step toward today’s on-demand interactive communications. For example, shoppers on their way to one of Oxford’s super-regional malls can now receive tips, via their smartphones or tablets, on available parking spaces closest to the stores they favour.

“Our customer isn’t necessarily just the tenant; it’s the people who frequent the tenant,” Hutcheson observed.

The green building movement was similarly embryonic when the forerunners to 21st century building automation systems and real-time monitoring hit the market. Few property managers in the 1990s may have foreseen their future participation in programs like BOMA BEST, LEED or GRESB, or envisioned the key role that would be staked out for the buildings sector to meet Canada’s commitment to reduce greenhouse gas (GHG) emissions. However, the panellists are now very much focused on that national target for a 30 per cent reduction in emissions compared to 2005 levels by 2030.

“2030 is really problematic, I think, for everyone in this room,” acknowledged Toni Rossi, president of Infrastructure Ontario’s real estate division. “Investment has to start today.”

She calls energy-use monitoring and the resulting data critical for identifying the best place to begin in the 5,000-building portfolio she oversees, particularly when the owner — the Ontario government — prioritizes services dispensed from the portfolio, such as health care, ahead of the state of the buildings.

“The luxury we do not have is funding,” she said. “We are in a pecking order.”

Institutional owners/investors enjoy a little more manoeuvrability. “The bulk of challenging emitters are 25,000- to 30,000-square-foot buildings and there are a lot of them. With a million-square-foot complex, you can do a lot of things that others can’t do,” reflected Remco Daal, president, Canadian real estate, with QuadReal Property Group.

Perhaps closing the circle begun with 310-MAXX, Love noted that tenant satisfaction is now a spinoff bonus of investment in sustainability. “In addition to being the right thing to do, and most programs have an economic rationale, the customers want it,” he said.

Rapid innovations have made flexibility a priority and propelled migration to non-proprietary systems. Daal warned that customized software and systems can present a bottleneck for integrating new technology and/or bringing new properties with differing systems into a portfolio. “A lot of times, organizations customize to the point of redundancy,” he said.

That might be counted among the growing pains of his newcomer company, tasked with managing British Columbia Investment Management Corporation’s (bcIMC) previously outsourced real estate portfolio. However, the new conglomeration also provides opportunities to identify and promote best practices from its various component parts.

“Invariably, when you bring 500 people together from different organizations, there are challenges,” Daal reported. “We had the benefit of continuing to use legacy systems from our predecessor organizations.”

Part of forging the way forward also lies in stepping back to contemplate what direction to take. “Property managers can’t do this off the side of their desks. You need a lab; you need a think-tank around some of these issues,” he advised.

“The world is changing and nobody knows exactly where it’s going, but if you’re not trying to figure it out, you’ll be left behind,” concurred Adam Paul, president and CEO of First Capital Realty.

As a reminder of the rapid pace of change, Love held his smartphone aloft.

“How many people in this room have a smartphone on them today?” he asked. “Just reflect that this didn’t exist 10 years ago.”

Barbara Carss is editor-in-chief of Canadian Property Management.

Leave a Reply

Your email address will not be published. Required fields are marked *