By Chris Rising & Marc Gittleman.
Rising has a technological impact at every project in addition to the social and environmental impacts we have discussed in past blog posts. Considering today's ever-changing work-live-play lifestyle, we believe a tenant's business and the technology they employ in their success are inseparable. In our view, every tenant is a “tech tenant,” making technological impact fundamental to the way we manage buildings.
Technology in Commercial Real Estate
In commercial real estate, as with most user-experience-oriented businesses, technology exists in four distinct, yet interconnected realms:
- Corporate Technology (e.g.: systems, platforms, mindset of corporate leaders to embrace, employee indoctrination)
- Building Operation (e.g.: building systems, elevators, security, parking, HVAC, work orders)
- Tenant Satisfaction (e.g.: Work order systems, HVAC control, concierge apps curating tenant experience, ease of productivity)
- Connectivity (e.g.: High productivity, connectable square footage, fastest free public Wi-Fi, carrier diversity, 5x5 Telecom, same-day internet installation, low price)
We make our technology investment decisions by defining the tenant experience that we will deliver, then work back from that point.
Tech and Real Estate Success
In our office, everyone uses a laptop. Nobody has a desk phone. Flexibility in where and how we collaborate makes us more productive and gives us a competitive hiring advantage.
When we acquired PacMutual in 2011, we immediately recognized three core tenant experience issues:
- Frequent service interruptions
- Exorbitant internet pricing
- 45 - 90 days of waiting for fiber installation
We took control of our risers, engaged Summit Riser to secure our entire telecom infrastructure, and optimized for zero service interruptions.
Next we launched 5x5 Telecom: fiber internet service at 1/3 the price of major competitors and same-day connections for tenants in 5x5 Telecom properties. At PacMutual, almost all new tenants, and many existing tenants, signed up.
We create places we want to be
PacMutual has an impressive historic lobby, outdoor restaurant seating, and is next to Pershing Square. Traditionally, these were places you passed through, took a break, or made a 'NSFW' phone call. We created Connectable Square Footage™, a technology expanding 5x5 Telecom subscribers' secure Wi-Fi network throughout these common areas, sidewalks, and parts of Pershing Square. The ability to work essentially anywhere — in a pocket park, lobby, or at a restaurant — drastically improves workers' performance. Studies demonstrate workplace flexibility reduces stress, increases cognitive function, and promotes active lifestyles. Healthier work habits are strongly associated with improved energy and morale, greater work productivity and higher employee retention. The Park DTLA has approximately 30,000 square feet of Connectable Square Footage™: dog-friendly grass fields, hammocks, outdoor desks and solar powered cell phone chargers. Lease a 2,000 square foot office and have 32,000 square feet of space for your employees to be productive. Amenity space is expensive per use. We use technology to create productive amenities, dramatically reducing the cost per use. This increases the space value, allowing us to underwrite more attractive and useful amenities. That is technology in real estate!
Connectable Square Footage™ answers the big question regarding lifestyle office design trends: When the trend shifts toward private space and flex spaces, you have shared common and outdoor office. The future may be an aggregation of private conference and phone rooms, leaning toward private “office” space, with "living rooms," blending into building common/amenity/outdoor space.
Being involved in the community is a major key for us. It's important that we exemplify our thought leadership in a number of different ways: hosting educational events with the LA County Computer Incident Response Team, donating space to be used for hack-a-thons, providing technology consultations upon move-in with tenants, giving keynote speeches at the Better Buildings Challenge Annual Technology Showcase. The list goes on....
In addition, Rising features 100Mb x 100Mb free public Wi-Fi. From the FCC Broadband Progress Report: “90% of Americans have access to 25Mb x 3Mb..." We give away internet 30x faster than what 90% of America pays for.
5x5 Telecom saves the average tenant $500 - $1,000 a month; a minimum $6,000 per year savings. Every business wants to save $6,000 per year. Assuming equal rent and amenities at two comparable buildings, which are you going to choose? Our experience achieving the highest rents in Downtown LA shows tenants will pay premium rent. Highest rent + fastest absorption = greatest asset value. This benefits our tenants, the community and our investors.
Rising recognizes our tenants' success drives our success. We owe our tenants the best user experience we can provide. Oxford defines “technology” as, “the application of scientific knowledge for practical purposes, especially in industry.” This captures Rising's ethos of translating our expertise for the benefit of our tenants and the community. When we create the best environment for tenants to thrive, we all thrive, and that after all is the goal of technology.