Proptech is having a moment. If you are like our team at HqO, you started to feel it coming on at the end of 2017. From the many conversations we have with both tenants and landlords, the overall sentiment around real estate has seemed drastically different than years past. How companies think about and interact with their space has changed as employees have adapted to the internet's impact on work. Smart landlords are ramping up their knowledge and implementation of technology much more quickly than they may have anticipated just two to three years ago.
But why? And why now?
Our team decided to poll the source of what is driving the seismic shift occurring in the real estate industry – the tenants themselves. We've gathered concrete data that can provide insight on why this movement is happening now - why tenants want more from their space, why they are looking to technology for solutions, and why landlords who have been hesitant to adopt technology in the past are starting to change their ways.
You can review the entire 10+ page report here, but I'll dig in to a few of the stats that really stood out to me.
69% of tenants have never interacted with their landlord or property manager
As many landlords have acknowledged to me over the past year, property owners have little to no brand awareness with their customer and end-user of their product. Establishing brand awareness is the first crucial step to customer loyalty, something WeWork is intensely focused on, and where many traditional landlords are trying to move quickly to make up ground.
72% of tenants are unsatisfied with their current amenities
35% of tenants said they have no amenities, 31% said they have some amenities but wish there were more, and 6% have no idea what amenities they have access to, if any (yikes). Amenities are no longer a nice to have – as tenants are spending more time working than in the past, landlords need to have a positive impact on the day to day life of their tenants.
And a quick freebie, we took a look at the top four amenities that tenants value most: fitness & health perks, food and beverage promotions, networking and community-building opportunities, and convenience services – the stuff we all dread handling before or after work, like dry cleaning, hair cuts, grocery shopping, etc.
74% of tenants said they would download a mobile app for their building
The specific survey question was focused on a mobile app to get into the building, accessing amenities, connecting with the property & other tenants, etc. Making the office tech enabled is one of the quickest and most effective ways that landlords can make an immediate impact on the tenant experience.
We have long believed that landlords need to provide a tech-enabled experience in order to directly connect with their customers, but the data speaks for itself really. The real question is what should landlords do in response? Here are the three reactions I recommend:
- Identify your brand –First, you have to know who your ideal tenant is and who you want to be in their eyes. For many landlords, this wasn't a concern in the past, but taking the time to establish and agree upon what type of property experience you want to provide will help guide any high-level marketing, purchasing, and tech decision making processes.
- Conduct an audit of your current property experience – Our data shows that tenants are completely disconnected from their office building. Do a quick analysis of your property: the amenities you have, how tenants can find out about them, whether they are in fact finding out about them, and the gaps you could fill to maximize the impact of what you already have on site. Tenants of office buildings are all battling in the war for talent. If you, as their landlord, take measures to make recruitment and retention easier for their business, I guarantee you'll see an increase in their lifetime value as a customer.
- Upgrade your skill set – In order to be a true placemaker, landlords will need new skill sets to provide services inline with what the hospitality industry has provided for years. First, this will mean determining the right amenities and services needed to compete in the marketplace. Second, you must identify the skill sets needed to execute on providing these amenities and services and specifically whether you want to bring them in house or outsource. Finally, determine the technologies needed to effectively deliver and maximize the value of your amenities and services. Without adding much to your overall operating expenses, landlords can make a marked improvement to the tenant experience by finding the right technology and amenity service providers.
While the real estate business is about to undergo great change, the good news is that the players that embrace this moment will win big. If you're interested in grading your property and tenant experience, we're here to help.