Property managers and owners assume new roles in leveraging technology for profit
By Grace Casselman
The real estate industry has collided full force with the world of technology.
In fact, the technological readiness of any building is quickly morphing from a competitive advantage to a requirement. Along with such amenities as square footage, properties are now regularly advertising their “future-proofed wiring” and “smart building” status.
To compete on this stage, property developers and managers are forced to provide a whole new range of services, and are striking a variety of formal partnerships with a wide range of communications providers. “We’re seeing some pretty interesting alliances emerge,” confirmed John Simke, ebusiness leader for PricewaterhouseCoopers Canada LLP in Toronto.
Landlords routinely receive licensing fees from communications suppliers, in exchange for use of “parts of the building,” such as in the basement or on the roof (for satellite or antennae space), confirmed a representative from Peregrin Property Services in Calgary who asked not to be named. She says telecom firms are now “outbidding each other” for such placement, limited by space and signal interference issues. (The choices available to the tenants are for the most part limited to the suppliers that are ensconced in their buildings.)
And she concurred that some property managers are going a step further and directly forming partnerships with telecom providers to sell services to tenants.
One Peregrin-managed building is downtown Calgary’s Hanover Building, and equipment from Norigen Communications Inc., for instance, is stored in the parkade.
“We’re taking a building-centric approach,” confirms Bill Baines, Norigen’s president and COO for Norigen, which is based in Toronto, with offices across the country. The company is trying to compete with traditional telecom vendors by offering a “one-stop” service to businesses, including local and long-distance telephone, high-speed Internet and cellular services.
“There’s been a violent change in the property management business,” says Baines. “They’re in a competitive world and they have to change to make their buildings competitive to attract tenants.”
“There’s not a property manager in the senior ranks of the industry that has not come to appreciate the concept of smart buildings,” notes Baines.
For instance, Oxford Properties Group Inc. has formed the Empori.com Inc. venture to capitalize on Internet-based buying. Basically, Empori.com depots are being set up in major office buildings in Toronto, so local businesses and consumers can pick up goods ordered online, when they’re coming or going from work. Consumers receive an e-mail when purchases are available. Using a password, they can access an Empori.com locker to retrieve the goods, or they can ask a worker at the depot for help.
David Bowden, managing director for Empori.com Inc. in Toronto, comments: “The concept began with Oxford looking for ways to offer more value-add services to people who work in their buildings. Everyone’s a consumer in their spare time.”
Empori.com has made deals with a number of online retail partners, including Chapters.ca, Corporate Express, Grocery Gateway, GiftCertificates.ca, HMV.com, Justwhiteshirts.com, the Liquor Control Bureau of Ontario, Steelcase, Sport Mart, Superpet.com and Xerox.
Residential developer Genstar Development Company Ltd. is marketing wired homes and “e-community” in northern Calgary’s Panorama Hills, where all homes will be equipped with cables and connections for high-speed cable, phone and computer networking. Each house will also get a password for a community Web site, where residents can post messages or shop at local merchants. “A fundamental part of society as we move forward wants more than bricks and mortar. They want to be part of an electronic community,” says James Hammermeister, Genstar vice-president. He has also said the company may take advantage of deregulation in the gas and communications industries to negotiate services deals on behalf of residents.
Calgary-based property management firm Boardwalk Equities Inc. (through its subsidiary Suite Systems Inc.) is wiring its apartment buildings with sophisticated networking technologies, to offer tenants telephone, high-speed Internet and television content, via partnerships with a variety of technology partners.
“We were covering the cost of powering another company’s equipment, storing it in our buildings and putting up with constant rewiring and service calls. Boardwalk was receiving nothing in return,” says Mark Kornak, Boardwalk vice-president and chief technology officer. “We thought, `Why don’t we do this ourselves and provide a better price to our tenants for phone services and television?”
Tenants will have the option to buy services from traditional providers, although Boardwalk says it will offer cost advantages. Estimated savings of between 10 and 15 per cent will reportedly be shared between the consumer and the apartment owner.
Of interest, because Boardwalk will in effect be selling telecommunications services, the company actually had to seek formal approval from the CRTC.
About 2,000 Boardwalk units should be wired within the next 12 months, according to president and CEO Sam Kolias. The company also plans to address properties in Edmonton, Regina, Saskatoon, London, Windsor and Kitchener.
Boardwalk is trying to “reinvent” its industry, says Dave Caputo, vice-president of marketing for Waterloo, Ont.-based PixStream Inc., provider of the television technology. He estimates landlords might see increased revenues of $100 to $200 per month per residential tenant by offering telephone, television and Internet services.
Caputo says: “It’s an exciting new approach to a traditional business.”