In this series, Bisnow highlights people and companies pushing the commercial real estate industry forward in myriad ways. Click here to read Q&As with all the innovators Bisnow has interviewed so far.
For years, Building Engines CEO Tim Curran said he was frustrated that many commercial real estate owners didn’t give their buildings’ operational systems the attention they deserved.
But that has all changed during the coronavirus pandemic. Commercial property owners over the last year have been intensely focused on adapting their building operations, from the HVAC systems to access control to virtual communication tools.
“We have a 20-year history, we’ve been around for a while focusing on building operations,” Curran said. “And when we get into the pandemic, I’ll tell you that all of the sudden building operations was a spotlight. It was super important to run buildings perfectly well during these times.”
Courtesy of Tim Curran
Building Engines CEO Tim Curran (right) with his son, Jackson.
Curran has sought to take advantage of this spotlight by moving forward with new acquisitions, partnerships and product launches that have responded to the hottest building operations topics of the moment.
In April 2020, just one month after the pandemic forced most U.S. office workers to shift to remote operations, Building Engines announced a partnership with virtual touring software company FastOffice.
In September, Building Engines launched Prism, a new platform to integrate all of its various applications and provide an open architecture to incorporate them with other products. Curran said the proliferation of proptech startups has made it difficult for building owners to pick the right ones and make them work together, a problem he is looking to solve.
“We’ve got this great opportunity to help our customers do some consolidation,” he said. “Our intent is to build out the platform for building operations and really tie all of these solutions together.”
In January, Building Engines acquired Ravti, a software company for HVAC management. The Ravti deal came after Building Engines acquired proptech companies RDM and Synlio in 2019, and Curran said he is actively working to acquire more companies.
“Now it’s picking up massive speed,” Curran said of the company’s acquisition push. “It’s almost going too well. We have too many companies that are lined up and interested. Now we have a different problem of how do we sequence, how do we prioritize. There’s only so many you can do at any one time.”
Curran joined Building Engines as a board director in 2011 and became CEO in 2017, his fourth CEO role for a business-to-business software company. He has responded to the pandemic with a series of moves to grow the company, and he has more plans in the works.
This interview has been edited and condensed for clarity.
Bisnow: You mentioned that when we got into the pandemic that building operations became a big spotlight. I want to go back to that moment in March 2020 when everything shut down. People were no longer going into the office and everyone was in panic mode. What was that like for you, those first few weeks, and how did you begin to chart a path forward?
Curran: In general, we were all frozen. There was a lot of fear. A lot of stress. What’s going to happen to our individual health but also the health of our industry. As it relates to our products, we have modules of functionality, so a lot of it has to do with maintaining the building, but there’s a bunch that has to do with communicating with tenants. Between the property managers and tenants there’s a communication module. We have things like visitor registration that wasn’t used a lot during that time.
As the pandemic unfolded, there were different phases where our product was important and got used. That first month or two, there was a ton of communication, so that module spiked. We saw a lot of, ‘What’s going on in the building? What are you allowed to do and not allowed to do?’ So that first bit was a lot of communicating. How do you get back [into a] building? What are you allowed to do? There was a lot of signage, a lot of coordinating and getting folks back in a limited way. That was one phase.
Then a little later what we saw was that as tenants got back into the buildings, you really needed to build trust with the tenants that you have your act together. If there’s one thing that Building Engines does, it manages workflows. It manages work. It manages maintenance, sanitation, cleaning. So just the mere fact you have a system, you’re collecting data, you have processes, it’s secure, and you’re going to be transparent about that. I think our customers got a big boost right away, because they were able to say, ‘We have our act together.’ We know how to service our building. We have service levels we’re hitting.
Bisnow: Within a month of the pandemic starting, you announced a partnership with FastOffice for virtual touring. How did you decide to make that partnership? How did you realize that you needed that virtual touring capability and FastOffice was the right partner?
Curran: We’re always looking out for what our customers need. And more importantly: Do they want us to get involved? Is this something we should take care of for our customers? That’s the selection criteria.
So a FastOffice would be: Does it make sense for us to help in this area, to expose FastOffice to all our customers? Is there a linkage there? We had some presence in leasing already. The one thing we do in the leasing area is we do a lot of floor plan management, so the CAD drawings, the floor plan drawings that describe how the floors of a building are laid out. That becomes really important in leasing because when a suite becomes available, you want to expose that to tenants.
FastOffice takes it a much further step. It’s not just a static floor plan. You can imagine moving around desks, chairs, moving around walls and creating kitchens. But they provide the virtual tour, so you’re getting a look inside the space through that product. It’s always about where does it make sense for us to get involved, and how do we best do that? What are our customers caring about? How does it relate to other functionality? That’s the screening process.
Courtesy of Tim Curran
Building Engines CEO Tim Curran (right) with his wife, Michelle, and son, Jackson.
Bisnow: You also broke into this other trend that emerged during the pandemic, which was the focus on indoor air quality and the HVAC systems of buildings. You announced this acquisition in January of Ravti. At what point in the pandemic did you realize HVAC systems and air quality were becoming a more important factor for office buildings, and how did you go about making that acquisition?
Curran: One thing I’d say is HVAC happens to be something that was pretty complex and interesting even before the pandemic. It’s one of the biggest consumers of energy. It’s one of the biggest drivers of comfort. Whether it’s too hot or too cold is probably [one of the] most common service requests that happens in Building Engines. That’s the biggest issue type we have logged in our system. So you have these systems that are very expensive, they consume a ton of energy, so when it comes to energy reduction, that’s a really important piece of equipment. It drives a lot of tenant satisfaction. So it’s always been important.
Ravti was very significant before the pandemic. And on top of it the pandemic layered on yet another reason why HVAC is so important. They are air handling systems, so the filtering, the fresh air, how you’re cycling air. The air conditioning system in jet planes became interesting and important during the pandemic. I was flying during the pandemic and was paying close attention to what JetBlue was doing with that air. It’s the same thing. It becomes a system that has a little to do with our human health, not just comfort, and not just a big energy consumer. So it made perfect sense. Even more so, Ravti is a great example of something that is in Building Engines’ world, it’s a building operations core system.
Bisnow: It’s interesting, HVAC obviously was important pre-Covid. And last year it became the hot topic, with webinars and news headlines about HVACs, and people cared about it. It became this big trend. So I’m curious because you acquired an HVAC software company, was that competitive? Were there other people out there looking to buy companies like this? Was it a competitive landscape when you were doing that deal?
Curran: Yeah, I’ll make one comment about what you just said with webinars. Last year, I got more requests to be on panels than ever. We got really frustrated for years that people didn’t understand the importance of building operations. And we’d get comments like, ‘Oh yeah Building Engines, those are the folks in the basement or they’re on the rooftop fixing the building systems.’ So I got asked to be on lots of webinars and panels, and it was great because people finally understand building operations are really important.
So on the Ravti thing, yeah I’d say we had a fairly tough time reaching terms and reaching a valuation. It’s a hot area on all fronts. Literally even the hardware, the manufacturers, filters, different ways you can ionize the air, how do you kill bacteria or viruses that are flowing through the air, all kinds of contraptions started popping up.
In this case, it was a great fit for us, and it goes back to when we decide to expand to an area, it’s making perfect sense to our customers, therefore it also makes perfect sense to the software company. So for a Ravti, or an RDM or a Synlio, when we approach them and say, ‘This is our vision for what we’re trying to do over the next 10 to 20 years, and this is how you fit in.’ They’re like, ‘Yeah, you’re right this does make perfect sense, we agree.’ In that way it gives us a little bit of an advantage, because we are a great home, we can help Ravti’s customers big time. So you still have to reach terms that make sense to shareholders, but I think we have an advantage there because we are a great platform to join.
Bisnow: That gets to one of the questions I had where you said the vision of what you’re trying to do over the next 10 to 20 years. Can you describe that to me, and what you would say to those companies as you look into the future?
Curran: Yeah so a couple ways. One of the things we think about is when it comes to building operations, there are a lot of personas. We want to hit them all. We want to make their lives, their work excellent: property managers, engineers, maintenance, vendors that come into the buildings from the outside, tenants, leasing people, asset managers, executives. You think of every single persona that interacts with a building gets affected by Building Engines. So with that we say, ‘How do we make their jobs better and better by expanding our product capabilities?’
So when it comes to engineering and maintenance, we’re going to make their lives better because Ravti now brings them really awesome HVAC capabilities. So with that basis, we’re going to take our core product and expand it, and we’re going to expand it very uniformly. There won’t be odd tentacles. It’ll be logical and uniform, like a sphere. And ultimately we want to be the operation platform, broad and deep, and we’re going to nail this.
And if you know the rest of the software landscape in commercial real estate, accounting and financials, Yardi and MRI in particular, what they’ve done over their 50 years, they have done what we’re going to do in our building operations space. They are consolidated, they have broad and deep applications covering all facets of financial operations. And they’ve done a wonderful job. They’ve gotten huge, they’re really giant companies. I describe that, so what they did in accounting, we’re going to do in building operations. We’re going to affect all of those personas. We’re going to be the platform for building operations. When I describe that, that’s what really appeals to the target company, like, ‘Wow that sounds awesome, we want to be part of that.’
Courtesy of Tim Curran
Building Engines CEO Tim Curran (right) with his wife, Michelle, and daughter, Ellery.
Bisnow: That’s interesting. I do a lot of our proptech coverage and that’s something I’ve heard is there has been a proliferation of a thousand different startups in that space and there’s a need for one unifying platform. So you said acquisitions are part of your strategy, are you actively looking to buy other companies right now?
Curran: One hundred percent. We got going, we created this playbook and we started on our way, and for the first several acquisitions, we were new to this. And that story I tell now, we were formulating that. So we got going. And we formed a little corporate development group at Building Engines that goes out and meets companies, gets to know them. We study the landscape. We have our own market map. We’ve mapped the building operations landscape, and we think there’s 40 different categories of software, and we’ve zeroed in on like six or seven that we really want to focus on right now in the next five years. Now it’s picking up massive speed. It’s almost going too well. We have too many companies that are lined up and interested. Now we have a different problem of how do we sequence, how do we prioritize. There’s only so many you can do at any one time. So it’s going excellent. It’s getting better and better.
Bisnow: Can you shed any light on what categories you’re looking at, what spaces you see as opportunities for growth?
Curran: We really like energy management, smart buildings, IoT. Those are categories that were really tough markets for a long time. People didn’t care about energy management. They needed to, but they didn’t. In the United States, we’ve kind of paid attention, but it’s gotten higher visibility. I think everyone’s realizing that we’ve got to do our part. Energy management we think is a real product offering that people care about. We’re looking at the tenant experience space is real hot, real interesting, so we’re paying attention to that one. The whole vendor management workflow is not as well done as it needs to be in our industry, from selecting vendors to paying them and rating them and figuring out if you should do business again, that whole workflow could be better.
The digital twin space, we’re paying attention to that. It might be a little further out there, like more leading edge. But we really believe in the visualization of space, so we’re still in more of a 2D world where we have floor plans we’re going to visualize operations data on. That’s one of the products we’re building out ourselves. Digital twin is 3D, and bringing lots of data on 3D model would probably be how they define it. We’re to watch that space closely. Access control is real hot right now. So how do I get through the lobby of a building, onto an elevator and into office space. We’re watching that one. So without revealing which one’s we’re going to go into next, those are some of the more interesting categories now.
Bisnow: I want to go back to one more thing that happened last year. In September you released this new operations software platform called Prism. Can you describe what was new and innovative about this platform? Were there any pieces of it that responded to the pandemic?
Curran: Prism was planned before the pandemic. It’s great for pandemic or no pandemic, it’s just a great platform. We created Prism because of our strategy. We want to be a platform company with lots of capabilities broad and deep, so that meant we needed a platform where we could quickly build applications, and also really integrate acquired applications, products seamlessly. So how do we do that? That was one of design tenets.
So how do we create a really open system that can inter-operate with others? We have this strategy. We’re 20 years old, and we have this next 20-year plan. We needed the next-generation technology architecture to do that. So the features of prism that are super important is open, its APIs, so the more open and well-documented and well-architected your APIs, the easier it is to operate with other products. We went crazy with designing the best API that you could create because of our strategy. It’s scalable, it’s secure, it’s international. We’re already out in 60 different countries with Prism in 25 different languages, currencies, time zones. We’re zeroed in that we’re going to be a global solution. Our history is focused on North America. And for the first time in 2020, we went outside North America and started to get customers in Europe and around the world.
And for data privacy and security, I don’t think our industry has paid enough attention to cybersecurity. I don’t think we’ve had enough attacks and problems in our industry for people to really wake up like the banking industry has. I think that’s super important, so we ended up doing that. We said let’s cover security and privacy, so the privacy laws like GDPR in Europe, there’s a California law, people are paying more attention to your privacy and the security of your data. We went crazy on that in Prism. It’s a lot of scalable enterprise features, and the openness was key.
Bisnow: You touched on another thing I wanted to ask about: your customer base. Has that grown over the last year? Have you been expanding your reach and your overall revenue?
Curran: Yeah, what the pandemic did was from February and March through late summer and fall, our industry was paralyzed in a lot of ways. There was a lot of stress and fear about what’s going to happen, so new sales slowed, but the retention of our customers was outstanding. The usage of our system was outstanding. It really tested us in a lot of ways. For that six-month period of time, sales slowed down, but it didn’t stop. We grew during the pandemic. We grew a little less than we would have otherwise, but we grew.
The other interesting thing about our customer base is we have a spread across office buildings, retail shopping centers, and industrial warehouse and distribution facilities. We also have some hospitals and stadiums. So we have this nice diversity, where you saw each of those segments get impacted differently. Distribution and warehouse went crazy. It’s the hottest part of CRE right now with all the e-commerce and whatnot. So all the sudden those customers became super interested in innovating and automating. So we got more business in industrial.
In retail, we focus on grocery-anchored, open-air retail, which was excellent because that’s a really stable space. Even though people say retail’s dead, open-air shopping centers with grocery is pretty stable, it’s a pretty healthy segment of retail. So that was good. And then on the office side, that’s where the ‘Wow, are people going to come back to office?’ that whole thing, which we’ve clearly been watching. So we grew, and our customer diversity really helped because some were going up, and some were paralyzed a little bit. It worked out well. I didn’t want to be tested in this way, but we got tested and we passed really well.
Original article published by: Bisnow