When I was 13 or 14, I started a business. It was a mobile DJ business with a focus on the metro-west Boston bar mitzvah and sweet 16 circuit. There are lots of great stories and learnings I could share, but this one is about data, and it relates to the current commercial real estate landscape.
During this time, which was before digital music and subscription services were available, I had to buy the music I played at the parties one song or album at a time. As an aspiring entrepreneur and having spent most of my money on the equipment, I had to be smart about the music I purchased. Every week, I would listen to Casey Kasem and Billy Costa's countdown shows, ranking the top hits locally and nationally, and write down every single song. At the parties, I would pay close attention to the songs that filled (or cleared) the dance floor. This was my data.
I looked for patterns in the data to help me make more informed decisions about the investments I was making in music, in prizes and ultimately in pricing. Over the many years I did this, I increased both my prices and my margins significantly by using all the available data.
This has a clear translation to commercial real estate and tenant experience (TeX) software in particular. Today, most landlords know very little, if anything at all, about the users of their product – the individuals who occupy their buildings every day.
Landlords, property managers, and leasing brokers are all making decisions on CapEx and OpEx based on what they think tenants might want. That seems like an awfully big risk. Historically, understanding the building population by surveying a handful of tenant contacts was the best landlords could hope for. Today, through technological innovation, connecting with the entire building population has become a reality – and the resulting data has the power to be transformational.
Across the HqO portfolio, we see nearly 60% of the total building population download the app and about 40% using it on a weekly basis. Those users are exploring content about the building, like real time shuttle updates at Jamestown’s Innovation & Design Building in Boston. They are engaging in commerce at the property, for example, by ordering ahead their coffee or lunch at TowerHouse Cafe at the Willis Tower in Chicago, owned by EQ Office, a subsidiary of Blackstone. In Washington, DC, when DivcoWest redesigned the lobby of their 1133 15th Street building, the community came together for the launch party. At The District in Burlington, MA, owned by National Development, occupants have control, using their phones for mobile access to the campus.
Ultimately, landlords will be able to understand patterns within their own assets, but, maybe more importantly, how those assets compare to similar assets across the country. This data will help landlords with tenant curation, floor-planning, amenity and service decisions (both CapEx and OpEx) and so much more. Once you have the data, you can find the insights and intelligence to make decisions that drive up the value of your asset.
Using tenant experience software is not the equivalent of listening to the weekly top 40 – it’s so much more powerful. It’s the equivalent of having visibility into every party around the county and then segmenting that data by geo, party type, attendee mix to understand specifically what type of music to play to get the people on their feet.
We think data gleaned from tenant experience software is incredibly powerful, which is why we created a new eBook, "Data-Driven Placemaking: Using tenant experience software to make smarter decisions about your property." This eBook details the current state and future potential of data from this proptech category, digging into its impact on commercial real estate. We think TeX data will help tenants attract and retain the best talent, and help landlords attract and retain tenants at more favorable rents, thus driving up asset value.