In recent years, technology has been revolutionizing the commercial real estate industry, providing innovative solutions that enable landlords to optimize their properties to reduce costs and maximize profits. In fact, 96 percent of commercial property teams say they will either stay the course or increase their software investment this year, according to research from “The State of Commercial Real Estate Building Operations for 2023.”
Here are five key ways technology can help commercial landlords reduce costs, boost profits, and improve property management strategies.
1. Reduce costs with intelligent HVAC optimization
HVAC accounts for about 35 percent of a commercial building’s energy consumption, according to the U.S. Department of Energy. However, by 2030, building energy use could be cut more than 20 percent using technologies. By optimizing HVAC systems, CRE owners can achieve considerable energy savings and reduce their costs.
An intelligent HVAC optimization system is one way to save energy and reduce costs. Such systems work by leveraging AI-powered technology to monitor and adjust the performance of HVAC equipment in real time. These systems consider various factors, such as indoor and outdoor conditions, and equipment efficiency, to ensure that the HVAC system operates at its optimal performance level. This results in reduced energy consumption, lower utility bills, and a decreased carbon footprint.
Artificial intelligence can also be harnessed to help optimize HVAC performance. For example, AI can make predictions on building performance that can help property managers lower energy demand during peak energy pricing hours. Or, AI can even suggest maintenance and system upgrades that would have the most impact.
2. Maximize rentable space with accurate measurements
Accurate space measurements play a pivotal role in determining rentable square feet, which directly impacts revenue. By ensuring precise measurements, commercial landlords can avoid underestimating or overestimating rentable space, leading to a more accurate representation of the property’s value and the best pricing for tenants.
Technologies, when paired with professional measurement services, provide a solution for precise space measurements. On the technology side, property owners and operators have access to floor plans and other critical property data. When combined with the expertise of measurement services, this technology enables the creation of accurate, up-to-date floor plans that adhere to industry requirements, such as BOMA or REBNY measurement standards.
Using tech-based space measurements ensures that landlords are charging the appropriate rent for the available space and thus can increase revenue, profitability, and property value. More accurate measurements can help streamline the leasing process by helping brokers market properties more efficiently and provide better tenant tours. Lastly, better property measurement can improve tenant relationships because who likes getting charged for space that you can’t even use?
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3. Earn additional revenue with reservation systems
With the growing need for flexibility, there is a growing need for the ability to reserve resources, including meeting rooms, event spaces, and other shared amenities. Tenants are increasingly seeking easy access to these resources to accommodate their dynamic work environments and foster collaboration. With a digital reservation system, property teams can provide the flexibility that tenants are often willing to pay extra for.
Technology can streamline the resource reservation process for both tenants and property teams. Now landlords can offer on-demand bookings that can allow tenants to reserve resources when needed, even on short notice. A well-built platform can provide intuitive interfaces that allow tenants to quickly and easily reserve resources. This simplifies the reservation process, enhancing the tenant experience and satisfaction.
Property managers can benefit from real-time metrics to monitor usage, track availability, and plan for future needs more effectively. This centralized approach to resource management reduces the potential for double bookings and helps correctly price resources as it may vary by each tenant’s leasing agreement.
4. Enhance tenant experience with a mobile app
Tenant satisfaction plays a crucial role in driving occupancy rates. A positive tenant experience not only leads to higher retention rates but also attracts new tenants through positive word-of-mouth and reputation building. In today’s fast-paced and technology-driven world, leveraging tech and data to enhance the tenant experience is essential for maintaining high occupancy rates and maximizing profits.
For one, mobile apps can be customized and branded to offer tenants easy access to building information, resources, and services. They can be used to streamline communication, submit work orders, reserve amenities, and access essential documents, such as lease agreements, and building policies.
Tenant experience apps also collect valuable data about how occupants use the building. By analyzing data on tenant preferences, usage patterns, and feedback, property teams can make informed decisions to enhance the tenant experience. Data analytics can identify areas for improvement and provide valuable insights into tenant needs and expectations.
5. Accurately invoice tenants and capture all billables
In many lease agreements, tenants are often required to pay for various services and utilities, including electricity, water, janitorial services, and other maintenance costs. Calculating these charges can be a strain on already overworked management and accounting teams. Automating the billing can save a lot of labor costs and reduce the headaches often associated with ancillary changes.
Inefficient manual billing processes can be prone to errors and can leave money on the table when tenants are not billed for services. Without a precise system in place, property teams may struggle to allocate costs fairly among tenants, potentially leading to dissatisfaction and even disputes. Manual billing processes can lack transparency, making it difficult for tenants to understand the basis for their charges and for property teams to justify their calculations.
Property teams can implement technology, such as property management software, to help solve these challenges. The results are improved cash flow from a streamlined billing process, fewer tenant disputes thanks to billing transparency, strengthened tenant relationships, and enhanced efficiency for property teams.
Additionally, property management software can help property teams flag common billables to stay on top of charges for labor and materials. It can also provide a streamlined way to generate tenant invoices and process payments for billable work. That means property teams can make sure they’re not only accurately billing tenants but also capturing all billables they are entitled to according to lease agreements.
Tech is key to long-term growth
By embracing technology, commercial landlords can stay ahead of the competition, streamline their operations, and maximize the value of their properties. As the commercial property industry continues to evolve, the adoption of tech-driven solutions will become increasingly important for success.
The future outlook for PropTech is undoubtedly bright, with innovations poised to transform building operations even further. By staying informed about the latest developments and integrating best-of-breed tech solutions, CRE landlords can position themselves for long-term growth and profitability in an increasingly competitive market.