It takes data, tech, and a strong human element to build a great tenant experience
The real estate industry is charting new waters. No longer is the property business a static field where buildings can be expected to retain tenants and steadily gain value over time; market upsets, the emergence of disruptive forces like flex leases, and finally COVID-19 have made that abundantly clear. What's more, tenant expectations have changed. The old way of doing business, where landlords simply address maintenance issues, collect rent checks, and let their brokers market the property just doesn't hold up anymore.
"The occupants of a space have a lot of say about whether they stay or go, while also presenting an opportunity to grow revenue in much more creative ways than just collecting those rent checks."
The reality is that the very nature of the global economy is changing. As countries around the world transition into service-based economies, the way individual people go about their day-to-day lives has also changed, with services taking on a fittingly greater role. Now, instead of going to the movie rental store or record shop we stream media through Netflix or Spotify. Instead of taking a taxi, we often order an Uber on our phones. And instead of booking a hotel, we often grab an Airbnb from another individual just like us.
That idea stretches out to other parts of the property business, as well. The "space-as-a-service" trend, where a package of services stretching beyond the space itself are shared with occupants in an on-demand fashion, has come to dominate the business over the last few years. Coworking and co-living are the two greatest examples of this trend.
In fact, the business of real estate is no longer just handled on the B2B level. While owners need to appeal to companies, they're increasingly finding themselves playing a two-level game where B2C concerns are relevant as well. It makes sense: the occupants of a space have a lot of say about whether they stay or go, while also presenting an opportunity to grow revenue in much more creative ways than just collecting those rent checks.
What does this mean for property owners? The modern emphasis on services and amenities, as well as the focus on solving occupant needs, means that physical space by itself has become "dumb". Just providing space may still be the beating heart of the real estate business, but it's far from enough to make properties, or companies, shine. Instead, it's the digital layer of data-driven services that makes space smart and companies win big.
"Tenant and user experience has become an increasingly important factor. Their demands, particularly concerning how technology is integrated into the experience of living and working in our buildings, are challenging us to raise the bar with our offering to them."
This puts property managers into a new position of importance since they are the ones that become the curators of user experience. If real estate is now about more than just solving maintenance issues and collecting rent checks, it's the property managers who are the front-line staff to oversee that transition. For these employees, creating a great user experience requires three fundamental things that stretch beyond the property itself: great tech, great data, and a great human element. Two out of three is not enough.
Let's break down why that is.
Tenant experience management is an inherently data-oriented proposition, since it revolves around ascertaining what exactly tenants want and then providing it to them in the most efficient way possible. Since it's about fulfilling human needs and demands, it makes sense that the responsiveness of a human (and not an app or program) is critical. And finally, despite the fact that humans need to be involved to guide and steer things, tech itself is also critical as it allows for easy data collection and nimble responses to the needs of occupants.
With the three elements of a strong tenant strategy in mind, what does a "standard" implementation look like for a landlord starting from square one?
1. Developing a strong tech foundation
It's critical for owners to have the observational and communicative functionality they will need to enable a strong tenant experience. Tech can help not only landlords communicate with their tenants, but also help tenants speak to each other, improving collaboration across the board.
2. Collecting data
This is where owners go from guessing at what tenants want to knowing it. A strong data collection plan is critical to ensure that the right choices are made down the road. This could include direct conversation, surveys, and even space use analytics involving sensors.
3. Developing consistent branding of both property and owner.
Tenants need to know what a building and its owner stand for without having to guess. Whether it's a theme of creative fun, tasteful elegance or something more nuanced, making both building and company identity stand out is important moving forward, particularly for the next step.
4. Integrating building features, amenities and payments in one interface.
Unifying the tenant building experience into one "command center" is a great way to kick things off, and by integrating on-site payment functionality into the equation, landlords can immediately expand their monetization opportunities beyond collecting rent.
5. Cultivating an on-site community.
With tech, branding, and data initiatives underway, owners can begin to grow the community of their buildings. This is where the magic happens. Why not kick off with a party? Here is one of our posts with a few more ideas.
6. Customizing the tenant experience based on data.
That's it, you're off to the races! But it isn't time to sit back and relax: as data keeps coming in, it's important that owners stay on their toes in order to provide the features, services, perks and opportunities that their tenants want. After all, this is why data collection is so important in the first place.
As you can see, it takes a true integration of data, tech and the human touch to build a successful tenant experience. If owners skip the data component, they'll be working in the dark, with no idea what tenants want. If they neglect the human element, they'd become robots. Without tech, there would be no easy way to unify the tenant experience and implement easy communication functionality.
The process of keeping occupants happy and engaged is an ongoing one, befitting a new world where space is now a service. In the new landscape of real estate, where disruptive technologies and new ideas stir the pot seemingly every month, the onus is on the owners to stay nimble and keep providing what tenants want. The stakes are high: as shorter-term rentals such as coworking arrangements become more popular, it's getting easier and easier for occupants to pack up and find a new home if their needs aren't being met - in any area.