It’s tough to make predictions, especially about the future. (So said the great philosopher Yogi Berra.) Rather than make predictions about 2022, in the fall of 2021 Building Engines partnered with BOMA (Building Owners and Managers Association International) to ask property professionals about their plans for 2022. Their answers offer a guide to what’s in store for building operations in the year ahead.
Tenant Experience Technology Ranked Most Useful for Building Operations
We asked respondents what they thought about a variety of new CRE technologies. We found a large plurality of survey respondents (49 percent) expect tenant experience technology to be most useful to their business.
(However, this may reflect that these are still maturing technologies. So respondents haven’t had much exposure to them and don’t necessarily know that much about them.)
‘Smart’ buildings are sexy in terms of the amount of media coverage they generate. But property teams seem unconvinced of their potential thus far. Only 17 percent of respondents thought smart buildings/IoT is or would be most useful to them in the future. Meanwhile, 15 percent of respondents rated predictive analytics/analytics tools most useful.
Only 5 percent of respondents felt artificial intelligence (AI) tools are/would be most useful to them. (Again, this may reflect the low level of market penetration for AI tools in the CRE industry to date.) There is also a general lack of understanding of what AI really means for CRE and what the applications are. Many people are concerned about ‘whether AI technology will replace people?’
Software Investment Either Static or Increasing for 2022
Over half of respondents expected their investment in CRE software to remain static over the next 12 months—56 percent. 42 percent said they expected to increase their investment in CRE software. Only 1 percent of respondents expected to reduce their investment in software.
Increased investment in software reflects the fact that Proptech is more mature, with 20 years of development under its belt. It’s more bulletproof, and more clearly useful to property teams’ needs.
Property Teams Prioritizing Multiple Tech Investments
How will property teams prioritize their technology investments this year? Respondents were closely split between investing in tenant experience, energy management, building operations, and equipment maintenance.
Property teams know they need to make office environments more attractive to lure office workers from the comforts of home. Tenant experience was respondents’ top software investment priority.
And many respondents are clearly aware of commercial properties’ large contribution to climate change. Energy management/sustainability was the second top software investment priority. More CRE firms are making “Net Zero,” or decarbonization commitments, fueled by investor and tenant demands for responsible energy use. Legislation to further drive change is also spreading, evident in a growing number of major metros—such as Local Law 97 in NYC. Building Engines expects this trend to continue to expand, and technology will be increasingly important for compliance.
Overall building operations came in third place as the top software investment priority. This is unsurprising, given the advantages in efficiency and convenience building operations platforms offer property teams.
Equipment maintenance wasn’t far behind as a software investment priority in fourth place. This signifies a long overdue change in attitude. Property teams are getting engineers’ need to digitize and go mobile to reduce human error, admin time, and maintenance costs.
Visitor/building access and space management rounded out the bottom of respondents’ software investment priorities.
Responsiveness, Safety Top of Mind for Commercial Tenants in 2022
You might think with COVID driving lower occupancy it should be easier to respond to tenants quickly. But our research shows most property managers and engineers aren’t doing an excellent job at responding to tenants quickly. Nearly 50 percent of survey respondents said the most common tenant request was for faster responses to work orders/maintenance needs.
Many property teams are stretched thin by new processes and requirements to support tenants and building operations. So this result is a reminder to stay focused on responding to active tenant needs.
In pre-pandemic times, this sort of irritation was not a deal breaker. But we live in an era where most office workers are still working from home and vacancies remain high. Property teams should take a systematic approach to ensuring faster response times to work orders/maintenance requests. Assuming you want to reduce turnover and help entice tenants back, of course.
The pandemic has understandably raised the salience of office safety amongst tenants. Enhanced health and safety was the second most common tenant request. 45% of respondents cited this as the request they hear most often.
Upgrades to tenant amenities was another common request for 39 percent of respondents. This suggests property teams should focus on providing spaces that improve collaboration and overall on-site experience. HVAC requests, mostly around temperature levels, were also cited as a common write-in example.
Where Are the Building Operations Robots?
We asked which area of building operations was most time-consuming and in need of automation. Certificate of insurance (COI) management topped the list, just.
This was closely followed by inspections/preventive maintenance tasks as the next top priority, followed by vendor procurement. There are CRE software tools on the market that tackle these problems very effectively. This suggests Proptech vendors and these property teams need to do a better job of finding each other.
(For example, building operations platforms such as Building Engines’ Prism manage and automate processes for building inspections/preventive maintenance, COI management, vendor procurement, tenant communications, compliance, and more.)
Visitor management and marketing were ranked the least ripe for automation, respectively.
Energy Efficiency Tops Sustainability Priorities in 2022
We asked respondents what their teams would prioritize in 2022 when it comes to sustainability. Energy efficiency was the clear top choice, with 71 percent saying it was a priority. This was consistent with survey respondents’ answers about energy management/sustainability being their top software investment priority.
Health, wellness, and air quality was a priority for 63 percent of respondents. Water efficiency and conservation was a priority for 40 percent.
Building Operations in 2022
These survey results suggest an optimistic outlook for the commercial real estate industry in the year ahead. 93 percent of the CRE professionals we surveyed said their property portfolio stayed the same or grew in 2021. And 98 percent of them expected their investment in CRE software to stay the same or increase in 2022.
The biggest through-line in the responses to this survey is the increasing need for technology to optimize building operations. So do you need to do more with less, increase automation, or rise to the challenge of ever-increasing compliance requirements? If so, it’s clear that CRE professionals can no longer afford to be laggards in technology adoption.
Want a deeper dive into more of the survey results? Stream the Building Engines webinar The State of Commercial Real Estate Building Operations for 2022. Building Engines Executive Managing Director Tim Curran, JLL’s Chief Operating Officer for Property Management, Kristin Mueller, and JLL CIO Eddy Wagoner analyze the survey results and take audience questions.