Tustin, CA (November 15, 2018)—There is no disputing the impact or importance of technology on commercial real estate, and specifically, the property management sector. But a new report by Common Areas, a collaborative operations software platform for the sector, finds that technology has not erased a variety of issues, challenges and pain points.
In a CRE sector already challenged by increasing labor costs and the shortage of trained personnel, the Common Areas Property Management & Technology Sentiment Report identified technology costs, the lack of seamless transitions and the need for greater integration, customization and scalability as significant pain points facing the industry.
“The ongoing evolution of technology has been nothing short of impressive as the CRE industry looks to leverage these advances to achieve greater efficiency, optimize process, reduce risks and ultimately, improve the rates of return,” says Casey Rue, CEO and Founder of Common Areas. “We are at the tip of the iceberg in terms of where we can go and what we can accomplish.”
Common Areas issued its report based on an industry survey along with follow up interviews with executives from local, regional and global property management firms. Highlights of the Common Areas Report include:
- Almost universally, PM executives praised the value of innovation, characterizing technology as a “must have” in order to be considered for and awarded assignments. Others said technology is both a blessing and a curse in part because for all it can do, there is no one-size-fits-all solution.
- PM executives differ in their opinions on the ability to effectively calculate technology’s return on investment. Some believe creating efficiencies and saving time translates directly to increases in billable hours. Others, however believe that the greatest returns may be too intangible to measure.
- The three greatest business and operational concerns for property management businesses—increasing labor costs, not enough time and resources, and a shortage of trained staff—each were identified by nearly 50 percent of survey participants.
- While acknowledging that communication is critical, satisfaction levels for communication in general as well as the process for identifying, communicating and documenting property issues is low. Less than 40 percent said they were satisfied with communications and just over 55 percent expressed satisfaction with how various task-driven processes are completed.
- In identifying the characteristics that are most important for software programs, systems and platforms, respondents are most interested in those that provide for ease of use, mobile accessibility as well as dashboard and reporting capabilities.
Clusters of Concern
The report said the greatest areas of concerns for property management firms include increasing labor costs, 52 percent; not enough time and resources, 48 percent; and shortage of trained staff, 47 percent.
The great recession has had a lasting, far-reaching impact on the way management firms view labor issues, according to participants. Today’s thin labor pool is due in part to the fact that as management firms limited hiring practices. They did this to remain as lean as possible, but in the process missed out on 8-10 years of hiring and training a sufficient number of people who could move up the ranks and satisfy today’s needs.
Finding experienced and/or trainable personnel requires a lot of sifting through resumes to narrow down the candidates. The increased competition for labor has been further exacerbated by the construction boom that has added considerable inventory across almost all product types, especially multifamily. The end result is “labor poaching” where newly constructed buildings that require a higher level of staffing and typically can pay a higher salary, are luring talent away from other buildings.
Satisfaction guaranteed; or is it?
According to the Report, more than 30 percent of participants expressed they identify between 10 and 24 maintenance and related issues at a property upon each site visit. As a result, the satisfaction level with processes, systems and communications is an important issue for everyone.
The Common Areas Property Management Study looked closely at the level of satisfaction in two key areas: the process for identifying, communicating and resolving maintenance related issues, and the level of communication between team members.
In general, the overall level of satisfaction is lower than expected: only 42.3 percent of participants characterized themselves as satisfied or very satisfied with the overall process; 50.9 percent expressed satisfaction in the level of communication between the entire property management team (including third-party vendors); and only slightly more than one third reported an 80 percent efficiency rate in resolving maintenance and repair issues correctly on the first time.
The report surmised that the level of satisfaction and or perception of efficiencies likely is influenced by the size of the organization and access to/ability to invest in resources. Executives emphasize, with a degree of certainty, that efficiency and satisfaction issues come down to costs: what property management firms can afford, and what they may be able to pass along to property owners.
Additionally, some executives also expressed a lack of surprise in the satisfaction and/or efficiency levels. One suggested that most companies aren’t as structured as they need to be and that the lack of structure makes it harder to achieve a truly acceptable level of satisfaction.
The future of technology: features sought, pain points to be addressed
The Common Areas survey asked participants to identify the characteristics that are most important for software programs, systems and platforms. Overwhelmingly, respondents are most interested in those that provide for ease of use (79.3 percent). Other characteristics that stood out included mobile accessibility (48.3 percent) and dashboard and reporting capabilities (46.6 percent).
“Because of technology and innovation, the industry can accomplish things that previously were inconceivable, and they can do them easier than ever before,” adds Rue. “Yet instead of technologies that are one-dimensional, capable of solving one issue or problem, the industry needs to hone the ability to link disparate but related functions together to solve greater problems.”
Underscoring the comments by Rue, based on the extensive interviews, The Common Areas Report defined four primary pain points:
- The cost and exclusivity of technology—Often, in addition to buying equipment and software, users also are required to pay annual licensing fees, per user. These costs can quickly add up and can make the technology cost prohibitive, especially for small to mid-size firms.
- Seamless transitions—However, the seamless transition from one version to another—a generally expected and anticipated process to make software and systems run more smoothly—it isn’t always easy or possible. The disruption can be detrimental and costly to ongoing operations.
- Integration—For all the progress that has been made, the inability to achieve widespread integration, allowing people to work together, across platforms and avoid redundancies, hampers the efficiency that technology works so hard to achieve. As one source said, “sometimes the process of being efficient is very inefficient.”
- Customization and Scalability—The industry and technology has not yet found any clear-cut, one-size-fits-all solutions. Typically, technology that currently exists neither offers the flexibility to be customized to address individualized problems nor is scalable to create operational and cost efficiencies for property management firms of all sizes.
Rue suggests that by leveraging the best practices of other industries and innovative CRE technology, tools and platforms can evolve to a point where integrated solutions will have substantially greater value than the stand alone values of the individual parts.
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About Common Areas
Common Areas is a collaborative operations platform that connects the people, places and processes of everyone involved with properties and facilities to create unparalleled levels of productivity and efficiency. The platform offers a comprehensive, a la carte menu of services and features that can be configured to meet the specific requirements of any ownership, management and/or services organization. Some of the features include collaborative workflow automation, configurable web forms, custom reporting, GPS work orders, and dynamic dashboards—which are all accessible via desktop, tablet and mobile devices. Common Areas also offers Business Process 360 to assess an organization’s specific needs, make informed recommendations and deliver tailored solutions. For more information to learn how Common Areas can help you create clarity & collaboration in your operations, visit www.commonnareassta.wpengine.com.
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