Once that office is occupied, PropTech and smart controls can help eliminate wasted space and latency in usage, reducing energy prices and helping to make micro-climates per user to extend the well-being of the people that add the building. Customers are going to be able to book meeting space, register guests or maybe access concierge services through a specially designed app. Finally, anonymizing and collating this property use information across all the offices of a specific owner, tenant or property manager can create enormous opportunities for the analysis of building usage and better specify space for tenants. An honest example of this is often within the retail sector, where info about typical “cross-shop” patterns in shopping centers can help landlords create tenant mixes and co-locations that better appeal to shoppers and maximize turnover for retail tenants.
While these opportunities for larger efficiency and transparency are positive, they also create challenges. A landlord is not any longer the vendor of a commodity – an empty floorplate let loose on an extended lease – but is typically the supplier of an amenities service during a smart building where the tenant is potentially way less secure. The need to possess buildings that meet these new specifications has challenged conventional underwriting assumptions around Capex, depreciation rates and void periods. Moreover, the investment and energy required to bring IT systems up-to-date, in order that huge data sets are clean, well-organized and compatible with each other, is sizeable.
Increasingly, these office buildings are marketed to tenants using computer game tours of space that's still being built, with visualizations of how space is often used most efficiently.
The PropTech opportunity is thus a transformational one for land investment managers because it challenges the very nature of how we price and operate land, but also how we glance at what we will offer and therefore the quite talent set we'd like to take a position in to deliver our clients’ performance targets. 5 years ago, what percentage folks employed data scientists? How massive were our IT budgets? What are those stats today and what is going to they be in 5 years, 10 or 15 years’ time? The managers who will survive and thrive are people who embrace the disruptions that PropTech brings and invests to take advantage of the larger efficiencies that they promise. In other words, the simplest deals we do that year shouldn’t simply be the assets we buy, however the tech firms we invest in.