The Next Step for Streamlining Operations in Commercial Real Estate February 19, 2015 | Samantha Dubrow
Commercial real estate is sometimes considered to be slow to adopt new technologies. But when you think about the software solutions that property managers use every day, you realize technology is actually a vital part of day-to-day operations in the industry.
There are several commonly used property management solutions, such as MRI Software, Building Engines, and Appfolio, which allow real estate executives to collect and store data online that is relevant to their business operations. These are especially common for companies with very large building portfolios.
At a high level, it seems these tools provide all of the big-picture data executives need to make decisions. However, there is one thing missing from all of these tools: tracking energy spending.
Energy is the largest controllable expense faced by commercial real estate companies, amounting to 22% of their total operating costs. Tracking energy consumption has the same benefits as the other metrics you already calculate, from allowing you to track spending to maintaining tenant satisfaction, and if you add it to your data-driven facility operations plan, you’ll understand and be able to control 22% more of the variance in your spending.
1. Add Energy to Your Centralized Portfolio Data
Companies with large building portfolios often track and compare their spending and productivity across all their buildings. When you add energy to the mix of data, you get a much better understanding of which buildings are performing better than others.
Now when you track your building performance you probably consider tenant retention and percent occupancy. If you add energy data across your portfolio, you will get a better understanding of the annual cost of your total building operations, what the most expensive operating months of the year are, and whether they are consistent across your buildings, and whether there are seasonal changes that affect your operating costs in certain buildings.
2. Make Predictions to Track Capital Progress
By only considering the expected revenue from current and prospective tenant leases, you miss a huge chunk of your operating costs. When you collect energy data, you can also predict energy savings based on projects you may decide to implement. You might find you can save enough money to justify some amenities for your tenants that will become competitive advantages.
3. Control Vacant Space
Do you already keep track of the vacant or common areas of your buildings where you do not bill the utilities back to your tenants? You may only consider the money you are losing by having unoccupied spaces, but there is more to include in your analysis. When you add energy data, you can see how much those spaces are consuming, and you will know to make easy changes that will save money every month.
4. Streamline Data-Driven Facility Operations
With real-time energy data, you will be able to catch maintenance problems before tenants notice them. You can also make informed decisions to start new projects that your tenants will benefit from and appreciate, increasing satisfaction and retention. When everyone on your team has the information they need, they can work together on the same page with uniform goals.
One reason energy efficiency often falls to the bottom of the priority list is because there not usually a way to track its effectiveness for your unique buildings. Getting the
data you need to make informed decisions about controlling your consumption is the next step to full data-driven facility operations across your building portfolio.
About The Author
When Samantha isn't writing for the blog or managing our HR like a champ, she studies Organizational Psychology at George Washington University.
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