Steve Todd: Data, Finance & Workplace

<— BACK TO OFFICE TALKS

How does capital investment in real estate improve profitability?Coming from a background in finance, Todd challenges the audience to think about presenting business cases for workplace change to a CFO or COO. What are the inputs and outputs? What is the present value? How do we present information that allows you to make decisions about workplace productivity and drive the bottom line. Can we tangibly track and display results to make that business case?

---

VIEW PRESENTATION:

---

Steve Todd, AVP, Global Head of Workplace, NASDAQ

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

My name is Steven Todd,  I'm Global Head of Workplace at NASDAQ and I'm also the founder of Open Sourced Workplace. So what I want to talk to you about today is I want to challenge you. I want you to think about workplace in a different way. I want you to think about workplace and how you would present a business case to a CFO or CEO. So in essence think about what you would need and how you would present that information and then we're going to get to optimize and productivity.

So the way I sort of position is that I'm a finance background, I spent 15 years working in finance, everything we did we did an investment appraisal every time we did a business case. That was what were the inputs and what's the output of a CEO or CFO or interested in is what is that profitability? Is it gone back to what was said before what is a net present value? Is a positive as a negative? If it's a positive okay let's go and do it. So how would you then position that if you wanted to think about workplace. What are the attributes. what are the inputs that drive the outputs? When we consider workplace and how do we sort of position how do we think about that? 

So in 2014 when I got into real estate these are the questions that were going through my head. How do we actually get together. How do we present information that allows people to be able to make those decisions? And these are some of the questions that sort of were flowing through my head. What makes employees productive. What features of an office actually drive the bottom line? We all have a perception that given everyone great coffee drives productivity but actually can we tangibly track that to actually display that actually helps the profitability of an organization.

Do employee engagement scores actually move the bottom line. We aspire to improve them every year but actually does it really materially make a difference. Anecdotally we think it does but we don't have any scientific proof behind it. How does capital investment in real estate improve profitability. So whenever we're presenting a business case how do we actually know that we're going to drive profitability. Real estate is an expense sucker right you have to pay for that through layers letter. You hope you gain benefits from it so how do we put that narrative ahead of time and how do we work that idea and does an employee compute impact profitability and this is just the way my brain works.

I just think along those different lines is it actually a benefit or is it does actually hurt if employees have to travel further. So that's sort of where some of this where this lays. So as I thought about this how do you even start to think about getting the data to answer some of these questions. And so again go through that concept inputs and outputs right. So what are the inputs that we could collect that actually would help us address some of that information. So yes we've got the usual suspects of real estate and human resources but again bringing in that corporate financial information where's the sales revenue coming from per location. 

What is the expense associated with every single office across the organization. What is the product profitability of every product that we produce as an organization on what location are they associated with. Whenever you marry that with real estate with employee turnover with other aspects of some of the other data points then you can sort of start to see pictures evolving and actually the conclusions may be able to get to. 

So what are the marketing KPI is what are the seals KPI is how can we bring that together into one data set to help funnel some outputs and some conversations and external data. So where is the access to talent in all the locations that we operate in right. How many if you've got sales associate. Does it actually impact them for the actual amount of people they're connected to on LinkedIn. Is there a direct correlation. I don't know but again these are some of the ways that our brains are sort of working and obviously the whole point of this is to drive outputs.

So to try and picture this a little bit more I put together a little scenario. So you know you're a sales manager you've just got given this initiative we've built these new widgets you got to go and sell it. So how do we sort of package these datasets to help the sales manager one pick the right location where he wants to put all these people and how does he present that business case again thinking about the CFO and the CEO or he wants to present or she wants to present that information. So what if we were able to pull all this information together? What is the average cost of employees of every word that we operate.

What is the occupancy cost associated with all those various locations? What are employee engagement scores? What is the real estate score for all those various locations, what are the utilization rates the staff turnover, the commute time, access to local talent, what actually is the cost of that local talent that we want to grow? What is the sales revenue by office? As I said are the distance to direct supervisor so how many time zones away is your direct supervisor how does that impact the sales potential of whatever office.

So can you imagine a sales manager sitting down with their eight hour business partner and this is all the information they have at hand. How much smarter and how much better decisions can their sales manager actually make when he then goes to take or she goes to take the business case to the CEO or the CFO. It's a lot more substantial that there's a lot of data behind it. Year two whenever they come back to evaluate they think back and track an index against okay these are the reasons why we made the decision was the outcome as expected. 

So when we go through when we collect this data we always aspire to get more data and part of that. One of the things we have to do is always ask ourselves what is the ROI of this data. What is the cost to actually get it and if we get the information will it actually make a difference to the decision. So today you know we talk about how we can actually look at security badge data and we get utilization rates. Well then if you have that and utilization rates and we all know is usually around 60 percent. If the management isn't going to make a decision or change the decision on that information why pay for it.

Asking for a Desk Utilization Study because they are  hardly gonna change their mind later. Is this how you evaluate what actually should be taken?

So part of this is we go back to the last question are there sort of one of those questions we had up on the board, how do we actually engage with the CEO and CFO to actually allow them to make decisions and how do we present information to them to make decisions. And one of the things we did at Nasdaq was we try to tackle the question up there, what is workplace productivity what is employees productivity and what does that look like. We actually went out to our employees and we asked them. 

We provided 35 attributes of an office and asked them which of these attributes makes you productive. And over half our employees responded and this is what we ended up with. So this is our true north in everything that we do and how we look at and evaluate what we have to do in real estate.  When we're designing a new office, this is where we go. This information, we can look at it by every location. 

The actual productivity factors change by location, so whenever we actually assess what we need to do we go back to this, the attributes, and we look and those are what we benchmark against and we put that forward.

So we have these attributes, each year we ask the employees how do we rate against each of these attributes and what is the opportunity we have to improve an employee experience at every single office. It also helps us whenever we come to make those capital investment decisions we're able to display this information we're able to display the feedback we get from employees. And here's the investment we want to make. And we're now in a cycle where actually we are able to go back and validate actually here's where we invested the money and this is the impact it actually had on the employee experience and how they're rated their real estate portfolio.

So as I said my background finance I come at this at a slightly different way and my brain's a little complicated. Yes it is. But in essence that's how I try to look at this stuff and I sort of want to challenge the team and I sort of hope you've taken a little bit away from what we've said and how you sort of present data and information to the CEOs and CFO. So thank you

Michael Davidson: Curating the Employee Experience

<— BACK TO OFFICE TALKS

Through a truly unique perspective, Davidson takes us back through time to examine the fundamentals of human need and the earliest human disruptions.

Disruption is nothing new, it is as old as we are. As soon as human beings evolved from primates to homosapiens, and realized they needed shelter from the elements, to eat, to breathe, to protect each other, they have been disrupting themselves ever since.

Disruption was based on the needs of the humans at that time but today, humans are the same….how do we measure ourselves? By what we’re building. 

---

VIEW PRESENTATION:

---

Michael Davidson, Head of Global Corporate Real Estate, Managing Director, J.P. Morgan

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

It's a pleasure to be here. My name is Michael Davidson, I am with JP Morgan Chase and have been for nine years and I lead JP Morgan's global corporate real estate portfolio across Asia, EMEA, Latin America, and North America. So today we're going to talk about corporate real estate and disruption.  But before we get to your 2019 I want to go back in time, all the way back in time because this notion of disruption is nothing new disruption is as old as we are the universe the earth by the way was created a pretty big disruption.

As soon as human beings evolved from primates to homo sapiens and realized that they needed shelter from the elements and to eat and to breed and protect one another, they've been disrupting themselves ever since. In 2019 and going forward is just the latest incarnation in our lifetime. In the ancient world the Great Pyramid of Giza or the lighthouse and Alexandria. In the modern ancient world you had the Taj Mahal or Machu Picchu by the way if you look at the wonders of the world and one of the great benchmarks for how humans rate themselves in terms of their progress it's all stuff that we built with technology stones and architecture and thought and one of the things that makes that common to what we're doing today is that all of the great wonders of the world had a purpose and they were tethered to a culture and they were based on the needs of human beings in that society at that moment in time.

Now let's go to 2019 and we have the benefit of having experienced the 20th century and now the 21st century humans are the same. How do we measure ourselves by what we're building? Only now we have steel and glass and we build towers and we go as high as we can possibly build them. We impress ourselves with these monuments and they are monumental. If you go to any city around the world, what are you impressed by first the skyline. When you go to the souvenir shop what do they have, little statues of buildings that were built that you think of a city you think of the Eiffel Tower you think of the Space Needle in Seattle you think of the Colosseum in Rome you think about what we built.

So if you look at this your vision and architecture and engineering and technology. But is it a curated experience? Like what's it like to live inside of these structures. It's great to look at,from afar. It's great at night when they're lit up but if you're one of the three or four or five or six or seven or ten thousand people that go and work in these buildings every day. What's that experience like. Is it is nice is looking at it from afar. JP Morgan is on the cusp of doing it once again.

We are taking down to 70 Park Avenue which was in the Times last year to build a new tower one that is thoughtful one that has core and shell and look and feel and all of the pedigree that you would imagine with a 21st century office tower. We are going through this exercise now but the fundamentals are very much the same, which we'll get to.  

We've built spaces year after year after year and we've hired the best architects and the best thinkers and the best amenities experts and we've engaged H.R. and we've tracked our headcount and we've created spaces spaces that are modern that bring people together to eat to think to learn to collaborate that don't feel like a bank. It feels like a place you'd want to sit and talk to someone.

All of these are examples of spaces there's no need to call out where they're built. It's fairly ubiquitous in terms of how we approach our real estate globally also because our employees are global so that what you build in Singapore or New York or Dallas or San Francisco people travel and if you're not building like for like and you're not consistent they'll call you out on it.

We're very consistent in terms of our design palette. Now, if you're an occupant and one of our spaces or in any space anywhere and if you really add up and account for all of the things that define your experience as an occupant, coming to work every day.  What's your experience like?  all of the things we could have named more but we ran out of space on the slide but we think we made the point is it curated or confusing. One of the things that happens is that although we lead real estate we don't lead all the things that impact your experience.

We don't lead security, that's among your first experiences whether you can get into the building does your card work.  We don't run amenities, food pantries, technology, wellness centers we integrate them in real estate but we don't run these functions. So through the years occupants and different companies occupying remarkable structures probably felt like they're looking at oncoming traffic rather than like in a curated workplace experience. Because all of these things were happening if they were synchronized, it was almost luck or it was because people were really good partners within a firm.  But this is often what happens and what happens on the inside.

I can tell you that every one of these emojis in my 25 year career I have experienced every one of those emojis and many more in the occupants that I've served. You get the entire spectrum depending on what people's needs are how they feel how you're delivering it and how you're integrating the myriad of things that actually impact a person's day or a moment in the spaces you create.

One of the things that happens or is happening in the 21st century is that one of the solutions as well is just fill the space with technology to really disrupt ii and if we load the space with technology well people will love it.  They'll be connected and they can use their devices and they won't need to get together as much. So there are two problems with this. One problem is that when technology is installed people don't often know how to use it.  How many conference calls or telepresence on Cisco have I been in meetings internally and externally where you have eight smart people around a table saying how do you like dial n. It should be intuitive but it's not always intuitive. Is there a wireless signal. Oh wait. I'm from an outside company my laptop doesn't work. Sometimes the technology is not as intuitive as it should be. 

The second thing that we're learning and we're learning this much more slowly, not just at a corporate level but at a societal level is that we're more connected than ever and yet we're lonely.  Why I'm connected to my friends all over the world via social media. They can say hello to me and share pictures. Why are kids lonely.  Why do we get notices from colleges and universities that say that anxiety and depression are on the rise? because there's a fundamental human need for connection and it isn't via wires or screens it's in person, something that's never changed all the way back to the ancient times to now is that people need each other.

When our businesses come to us now to develop new spaces it's interesting that among the first things they say to us after technology is we need spaces to get together in person to innovate. Innovation Labs collaboration spaces smart rooms where we can physically come together even though we can do it with technology remotely we need a room where we can physically be present. That's where the innovation actually happens. 

So you have to be aware that you don't try to solve the previous slide all of the different inputs by saying well let's just kick it out with technology and it'll be fine, It won't be fine. So let's go all the way back in time again and let's talk about fundamentals, fundamentals that were true in the ancient times and every century sense. These are the things that within JP Morgan we are evangelizing over and over again is how we treat one another.

Is that one of the primal parts of the experience that we have no matter how nice your workplace, how beautiful building it is, how far into the sky you are sitting, because we were able to build it that high, is that if you're not treated with dignity and respect by the people you are spending time with, your experience will not be good; if it's not fair.  If these are not exercise if there is not empathy and accountability integrity and respect and diversity and trust, well no matter what space you're in wherever you are in the world you're not going to have a great experience.

So corporate real estate, we are disrupting it and it. It’s being disrupted but just like every other object in space has been built by mankind since the beginning of time, if you disrupt corporate real estate without purpose, purpose equals plan equals strategy equals thought,without values without culture without humanity and honoring and genuflecting to the inherent human needs for the people that are going to occupy your space, well then your disruption is just going to be disrupting and nothing else.

If you use these as pillars, if you build your disruption upon these pillars as a grounding well then what happens is that the disruption becomes a transformation and why is it a transformation? Because you're creating an experience that attracts and retains people. So when you attract and retain people this is arithmetic.  If you attract and retain them that means they start to build relationships and when they start to build relationships they start to trust each other and hang out more and when they do that they talk more and when they talk more they start to share ideas and open up with each other. 

Then they start to innovate and then the real disruption starts to happen. The constructive disruption the moving forward progressive disruption that impacts the person the team the organization the industry and even society itself.

Thank you very much.

Vik Aggarwal: Diversifying Your Real Estate Portfolio Strategy

<— BACK TO OFFICE TALKS

Vik Aggarwal, Global Head of Enterprise for Knotel discusses diversification of commercial real estate portfolio strategy. What you need to know about flexible office space, hybrid real estate model & more.

---

VIEW PRESENTATION:

---

Vik Aggarwal, Global Head of Enterprise, Knotel

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

We are going to talk a little bit about Knotel but this is not a sales pitch. This is about how we approach portfolio strategy. So, for those that don't know me my name is Vik Agarwal, I run enterprise for Knotel.

I’ve been here for about seven months, prior to that I was number two for global real estate for AECOM out in L.A.. Prior to that I ran global real estate strategy for American Express. and prior to that I had CFO role and portfolio strategy roles at BlackRock, Morgan Stanley and J.P. Morgan Chase. So what we're going to talk about today is how you diversify your real estate portfolio.

A lot of that comes down to using flexibility. Harvard Business Review put a quote out about how important flexibility is to a portfolio. Now this is nothing new for any corporate real estate executive, we've been trying to do this forever. Take a traditional lease you know, talk to the landlord, get me my termination rights sure for our expansion rights all these different things but they will come at a cost. And  still you exercise a termination clause you're going to pay on unamortized TI’s, you're gonna pay unamortized commissions, you have asset write off. It's a huge financial pain that you take on the P&L cash flow and balance sheet. 

So yeah there are some advantages to taking a direct lease. Some of these are long term stability, you have more control of the space of a direct ownership relationship. You have the ability to advertise your assets that you own over a period of a longer period of time and you can really control your privacy your I.T. your security as you enter the space. Now flexible workspace is something that's new and it's a new tool that's in people's tool belts.

Now Knotel is not and why use flexible workspaces that we are not coworking. So a company that does enterprise grade does not want two seats, three seats sitting next to random strangers. They need to have their privacy. Some of their employees maybe we're using P.I. data, social security numbers, you know this is a lot of intangible risk and tangible risk around having a transient crowd working with your employees. 

As you think about flexible workplace there's a lot of different ways to use flexible. Your company may have gone through an M&A and maybe divesting a company, it may need swing space, a line of business may need to work differently. Your CEO may have said I need three hundred seats tomorrow and that becomes your oh shit moment right. That you need to go and solve and you've got to be the superhero. So the benefits of flexible is that you don't have to do occupancy. So U.S. gap as you a straight line your rent  as soon as you take possession of the keys which is a drag on earnings; CFO’s don't like that, that goes away. 

You don't have disposition costs in the future. So say your headcount balloons say it reduces by 50 percent, you don't have to go worry about disposition of the space and sub leasing it. You don't spend capital? you are basically converting capital to opp X so that frees up your free cash flow for a company that allows them to go buy things with their cash and use their balance sheet for some things more creative to earnings. If you can have a fully serviced office experience which has IT, design workplace strategy, you don't have to give up some of the stuff I said in the traditional lease about the IT  you get find the right provider, they can even hand you the fiber optic wire and walk away. 

Everyone's headcount fluctuates.  There is a Boston consulting analysis that says 41 percent of the companies interviewed said their headcount projections were wrong by 100 percent. This is not new to anyone right, so if you think about that that's a huge drain. Real estate is the second largest expense for a company so getting it wrong has huge financial consequences.

So why go long in space when the word future inherently means uncertainty and you have the ability to have a fully tailored office that matches your space standards and branding experience, use a certain type of stand desks across the world we can match that. You know Michael talked about whether you go to Portugal or London or D.C. or LA they want to have the same experience as people travel. You can still have that when you work with a flexible office provider that is global in scale. 

There's a mix between this now too.

So some companies are saying you know what I know what my base headcount is going to be is never gonna change but I do when projects and I do lose projects. So I need the capability to fluctuate up and down based on future needs, so that's what I call the hybrid model. The hybrid model is basically that you can add flexibility to transaction level. So a company like Knotel and this is something we've actually done in London is a company who said that they wanted space and go long, but they want to be in the whole building but they don't want to have the whole building today.

So what do you do, you reach out to a flexible service provider like ourselves. We took down the rest of the building and they took a floor day one so they can contract down. Then they also have call options,  first refusals to go long in that space is adding true flexibility at the transaction level and choose scalability. So you're not bifurcating that a second third fourth building or have future disposition risk. 

One of the concepts I want to talk about and this is a metric that every company uses which is net present value to determine what's the best way to make a decision.  Building A verse Building B, Time Value of Money.  Time Value of Money tell us your dollar today is worth more than your dollar tomorrow. But there's a flaw. It doesn't tell you whether the decision was right day2.  It doesn't tell you whether you're spending good money after bad money. So there's a reverse concept of that called the money value of time. So if there is a way to create a structure where you're spending a few percent more to not have to make a decision that's valuable.

What keeps people up at night,  I went too long in space, I went too short in space,  my CFO doesn't want to spend the capital of a fully depreciated asset, I don't want to have dual occupancy have a bubble period. All these things that show you as a real estate professionals like this a no brainer we should be doing it. These keep other people up at night as disposition risk,  asset write offs. If you have a capability to scale up your headcount or scale down the headcount because you're flexible workplace you're not spending capital we don't do occupancy that really transforms the scalability and your ability to do portfolio optimization on a real time basis.

You've heard a lot about what exposure a landlord wants to have in a building. People talk 15, 20 percent of that space should be flexible. But for a corporate real estate executive, what is the right mix. People want to have metrics. Everyone has KPI’s. Well, every business is different. So you have office vacancy rates that are different by market and by industry and most companies say you know what I want to have 10 percent vacancy so I want to restock the whole building.

But then you have on top of that not everyone comes to the office every day. Yes you solve that through heads to seats ratios. You look at badge swipe data but the truth of the matter is people travel. People take vacations, people take holidays, things happen. 

The short answer to that right is that there's really no answer to that. You really have to look at your business and say by market, by business unit what is the right metric that I want to have. And you start implementing that based off of that. Flexibility is the most important thing that company can add to the portfolio because it really allows them to have scalability upwards and downwards for their second largest expense for the company

Roger Krulak: The Future of Modular Construction

<— BACK TO MULTIFAMILY TALKS

Roger Krulak, CEO of FullStack Modular describes a paradigm shift in construction that is revolutionizing multifamily development. Krulak dives into the benefits of modular construction and the overall impact it is having on the CRE industry.

---

VIEW PRESENTATION:

---

Roger Krulak, CEO, FullStack Modular

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Hello I'm Roger Krulak. I'm the CEO and founder of full stack modular we are a fully volumetric solution for high rise multifamily buildings in a dense urban environment. So today I'm here to talk about the crisis of lack of productivity in the construction industry. There are three major drivers, one of them is that we are not meeting the current needs for housing for instance in the United States. There is at least a 10 million housing unit deficit as we speak today. In addition to that there is an increasing lack of labor for productivity for  the built environment, less people are going into the trades or the boce trades in this country.

Additionally the process of construction in the United States and frankly in the world is broken. Projects normally end up at least 20 percent over schedule budget and as much as 80 percent over construction budget. This is part of the reason why the productivity on site is completely disorganized the process of organizing construction by trades is nonsensical from a logical process perspective.

Everything else in the world is manufactured. Aerospace, airplanes, toys candy is manufactured but construction is not. Designed manufacturer construct which is what we do at full stack is the only path to success using offsite built solutions or using manufacturing to construct the built environment. Full stack modular utilizes technology and manufacturing processes to increase the efficiency by which we create the built environment.

Here you see an example of the traditional method of construction which is design bid build against design manufacturer construct solutions and you can see not only is there an opportunity to save time which is of course a major goal but you also can decrease the amount of time that it takes to get the cost efficiency. And that happens by creating a digital twin of the building before we ever build it costing it out and organizing it in a process that is as efficient as possible.

In addition to allowing you to build the foundations etc on site while we're actually manufacturing in the factory increasing both productivity, predictability and cost. Some of the benefits of modular construction and in our solution is that we build 80 percent of the building off site. It's 98 percent cost predictable, we only calculate in the factory labor material and overhead rather than organizing it by trades.

It's incredibly safe. Employees almost never get above 30 inches off of the floor. We have almost no waste. We have less than 70 percent of the workers on site making it a much safer solution and at a minimum you're gonna get a 25 percent increase in time to market. Additionally a full stack modular has some other advantages. We are made right here in the United States. We can build incredibly tall buildings with our solution forty five stories and a double loaded corridor and up to sixty five stories in a tower configuration.

We implement technology within our process. We have a cell ceiling facade solution. We have almost no or few workers on site. Once the once the modules leave the factory and get installed on site and we are always incubating new technologies in order to increase that efficiency.  It’s a value proposition for manufacturing in lieu of conventional construction. So if you always do what you've always done you always get what we've always gotten. So the problem is why isn't everybody doing this.

The reason everybody isn’t doing it is that it requires a significant paradigm shift in the process that we create the built environment and the roles change significantly. For instance the architect normally is involved at the very beginning of thinking about how the building is going to be built and then what it might look like and what the program is and we're trying to shift the role to architecture whereby they worry about the way that the building looks and reacts to the environment and the way that the people in it react to the building. 

We take care of all of the math of the massing of the processing. Technologically. And the role of the general contractor significantly changes and these are some of the ways they are the scope of work that happens. It starts with foundation and utilities which is generally conventional the crane in the stack of the models we bring the models from the factory they get stacked in about 12 minutes we do mateline work and the mateline work and you may not know what that is, there's a picture here describing it.

There's three modules, they're stacked on top of each other. the mateline work is all the connection pieces that are required that happen on site whereas all of that mod work, all the distribution mechanical electrical plumbing happens in our factory. This is a picture of our factory. You can see how the modules are manufactured, assembled as we call it. You can fit up to fifteen thousand square feet of a building in the factory at a time. We manufacture between 5 - 7,000 square feet of finished product a week which includes elevators, stairwells, all of the structure all of the facades toilet paper holders paint lighting fixtures everything except for the hallway.

Once our modules arrive onsite either by truck or by train or by water it takes roughly 12 minutes to stack. The advantage of that is that the building is almost completely finished including stairwells, elevator shafts, all of the finishes in the units including and down to the toilet paper holder, painting, flooring, appliances, anything short of people. And there's no scaffolding required.

There is no hoist required and the building gets stacked up just like it's going to be finished. Thank you very much. Roger Krulak CEO and founder of full stack modular. Thanks for listening today.

Michael Mignosi: Evolution of CRE Marketing

<— BACK TO OFFICE TALKS

CRE marketing then & now. Director of Marketing for The Moinian Group, Michael Mignosi dissects major changes in marketing tactics of the past and what tools are proving effective in CRE marketing today. Viewers will learn about specific technologies and the ROI’s they are bringing to the table.

---

Michael Mignosi, Director of Marketing, The Moinian Group

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

My name is Michael Mignosi, I am the Director of Marketing for the Moinian Group. We are a national developer covering 20 million square feet across commercial residential and hospitality, mostly New York with satellite offices and properties in L.A. and Dallas. Today we're going to be talking about real estate then and now, how marketing has changed how it's adapted and how technology is progressively integrating and adapting to the needs of the current consumer. And these ideologies and innovations really pertain to five different aspects - branding, your visual identity, visualization how you convey and capturing this moment and products that you're trying to sell; advertising what it was how it's changed and how we should think about moving forward; communications; how we're getting in touch with these listings how we're converting these how we're talking to brokers and open houses, as well as analytics. We get a ton of data. What do we do with the data? What are we doing now and how to think about it in the future? 

When we think about branding we think about the visual identity of what your product represents. This is the first moment that we can capture that really captivates your audience base against a huge listing of other product offerings. When we think about branding then we think about luxury, exclusivity, a huge sense of elitism that no longer pertains to the current consumer.

When we talk about branding now we're talking a larger integration of messaging and strategy as well as market research that pertains and captivates that specific audience that you're trying to get. On the visualization side, we're really looking at what we've done with for things like photography renderings and videos and what we're doing with them now. So what we've seen historically is this conventional sense of taking a picture of the home, capturing the essence of finishes, appliances, the packages they are offering, whereas now we're seeing a large movement into integrating that brand that you created and that message in that tone of voice and putting that in interjecting that into your visuals which help differentiate and capture your audiences.

On the advertising side, you think of conventional advertising with ad units, that say specific call to actions, the brand that you're selling an image or couple images of the product that you're representing and then getting them to click through on to some sort of web site or call to action. What we've seen is that there's been a major drop off in that likely for the fact that consumers are smarter they're not clicking on the side banners anymore they want something that's more organic that feels and connects more with the publication or medium that they're actually reading. So what we've done to convert new tenants we've integrated more visual creative things like art that we incorporate into our buildings, something that's visually catching that really gets you to actually ingest and then move forward into reading and clicking on that call to action.

On the communications side we've probably made the biggest strides in this, so when you think about communicating with a real estate advertising or listing you think - When do I need to go to that open house? How do I have to change my work schedule to accommodate that? Why do I have to call this number one I don't necessarily want to speak to someone? And what we've done is incorporate more A.I. technology things like MeetElise where you can actually have what sounds and feels like an organic broker answering questions 24/7. So for example - someone inquires about a property do allow big dogs. We can say through meet-a-lease meet our building requirements or standards of policy and then MeetElise can interject a question or answer that feels more organic something like “Of course we allow dogs we allow dogs of this breed this breed in this period of this size and they cost this much to have them in the building.” Then they can respond with follow up questions and convert that into a tour, or a sale, a lease etc.

On the analytic side historically when we think about analytics we think about ways in which we can quantify these qualitative things like a visual, an ad and so we historically have always looked at how many users are looking at it how many sessions does that one user engage with? how long are they on the website? Whereas now we can use a bunch of new technology and innovation like Nestio so we can see not only how many users in sessions are but where are they coming from, do we need to adjust our media spend where we are seeing an increase of users in sessions interacting on platforms like StreetEasy, Zillow New York Times as well as on the marketing side. So we have integrated HotJar across all of our websites and this allows us to heat map and sense and get a user experience for where they're engaging. What are they looking at? What pieces are they not looking at that we've always valued as important? And then we can move and adjust the website in a way to meet those needs and get those important call to actions at the very top of the page in that instant moment and then convert them. Moving forward there really are four main pillars and important things to take away from this. Knowing your audience who are they. Where do they come from? What do they want so you can adjust for that. Investing in creative where renderings have come down and costs in the past three years so much so increase

 Not only the amount of renderings you're doing but what you're doing with them capture moments like elevators, corridors, lobbies, things that build upon a six tired appearance so that they can feel like they're turning the building without actually tearing it. Maintaining brand consistency is another huge one. We want to talk about creating adding and it's creating advertorial is creating messaging and tones that sounds and feels exactly the same, so you're not changing it so that when tenants are looking at a screen they could feel and remember that product on an instant notice. And then to do this, the most important thing is to mitigate the risk with ownership in getting these approvals to make these innovations and changes in the way that you market.

The best way to do that is through A and B testing. So take that creative, make it a little bit different, put that out to the market take your historical ad units or marketing and put that out to the market and see which one performs better. See which one does or acts differently and then that's where you can prove and quantify your argument to get that media spent back from ownership.

Cormac Crossan: Spare a Thought for Dumb Buildings

<— BACK TO OFFICE TALKS

By 2050 2.5bn more people will live in cities and our energy consumption will double. Of the buildings that will support our densified cities in 2050, 75% already exist. Cormac Crossan sheds light on dumb buildings and the infrastructure challenges we face today.

---

VIEW PRESENTATION:

---

Cormac Crossan, Director of Business Development, Real Estate, Schneider Electric

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

I wanted to prepare a talk for DUMB buildings.  This will be my fiftieth marketing conference and these poor dumb buildings no one ever talks about.  So we're always talking about buildings like these. They all get their day in the sun they get prizes awards. But the reality is the overriding majority of buildings in the world are nothing like these. They're way more like this or maybe this one. And they deploy technology like this and here's an example of some interesting lighting integration. 

So you get my point right. So we've all had experiences of dumb buildings, that airport you love to hate or you know the office building you love to avoid, like the plague. That condo you should never bought, and like that.

I want you to think about the year 2050. Right. So given the pace of change in the world today I think we can all agree 2050 be a very different world. So the experts say it's going to be 2.5 billion more people living in cities. We will consume double the amount of energy we're consuming today. 

The demand for electricity will be growing at twice the pace of the demand for energy.  That's going to be much more electric in the world electrified and we need to reduce our carbon emissions by 50 percent to avoid catastrophic climate change.  So going to need a few things to make all that happen. And one of the ingredients I think you'll agree would be very very smart buildings right. 

But get this, seventy five percent of all of the buildings that will exist in 2050 are already here. Guys they're here and they've been they've been built. And unfortunately for us they are very very very far from smart. So while we're pondering this problem let me tell you a little bit about myself. My name's Cormac I'm obviously not from around here. Get that. Um I head global business development for real estate in Schneider Electric and I worked for 10 years in the datacenter business and in five years in real estate and I spent the last five years working out how we can apply the cloud that we built in data centers to build value in the real estate sector. 

I work for a company called Schneider. You can see the logo down here. Schneier is a French company with a German name with a CEO based in Hong Kong and we do most of our turnover in North America. So easy. 

In Schneider we spend over a billion dollars a year trying to solve questions like the one I just asked you “what do we do with all these dumb buildings?”  and the good news is that there are some promising signs right. So we're already applying technologies from this amazing tool box that we've inherited from the I.T. sector that I worked in for 10 years. Tools like cloud analytics machine learning, A.I., mobile.

We're seeing some very promising signs of what I'm going to do is for the rest of this talk we're just going to look at three ways,that we can address the dumb buildings and try and get them ready for this challenge in 2050. So let's start. 

Number one, we need to make them green. This is a no brainer right. So dumb buildings have a massive carbon footprint. So 30 percent of the world's carbon is produced by dumb buildings 40 percent of world's energy is consumed by those buildings and corporate occupiers don't want to move into them anymore. They're looking for sustainable spaces green spaces and the knock on effect from this is that these buildings are worth less. So studies show that the big buildings that do not have sustainability certifications are between 7 and 9 percent less valuable than their sustainable counterparts. So what do we do about that. Well the good news is we have lots of ways of addressing existing buildings that are not sustainable. 

At Schneider we've worked on thousands of buildings to address the issue. I'm just gonna give you one example our own corporate headquarters is a 350,000 sq ft facility. And from the moment we moved in until today we have divided the energy footprint on a sq ft basis by 6 and we haven't replaced all the equipment in the building. Everything has been done by baby steps. So we add a variable speed drive here, we change a setting in the BMS here, yes we've added some renewables, we've done photovoltaic with geothermal but most of the changes have been added with a with a very short ROI in mind because we have a lease. So the message here is there really is a huge potential to make the buildings greener. 

Second thing I will talk about is making them flexible so the way that we consume space and square foot is changing radically right, we're all talking about coworking, this event is co-sponsored by We, workplace policies are changing and get this, dumb buildings have difficulty in adapting to this these changes. But we're working with some of the largest banks in the world and we're able to instrument their buildings with smart IoT sensors. It doesn't take months or weeks or even days, we can do this in a matter of hours and we can start to gather information about how these buildings are behaving and what the usage is and how we can improve them. 

Then we can take that data and we can start to improve the controls of the office buildings we have technology in on the control side that allows us to completely reconfigure an entire office in a matter of clicks with a fraction of the cost a fraction of the time a fraction of the loss of productivity.  We're also working on technologies like micro grid where existing buildings can become way more agile and way more reactive to the way the energy environment is behaving around them so really exciting things happening in this area. 

I left probably the single most important aspect to this for last and that is that we need to make existing buildings stickier.  Now I don't know if you would agree with me on this but I believe the buildings today are waging a war, for our time. In retail this is called footfall,  in offices this is called occupancy, It doesn't matter if we're talking about the same thing, getting us to spend time so that we produce and the biggest weapon in this war, the most important weapon in this war is something called experience. Just as up to now every building has a unique architectural footprint, every building going forward will have a unique and unique experience many times digitally rendered, which will typify it.  The race to provide that best experience is most definitely on. 

So I've been fortunate to have been involved in the corporate headquarters project of a large French bank Societe Generale and the experience that they provide in their building is absolutely incredible. We provided them with the mobile applications for every person in that building is given an android phone and that phone accompanies them through their entire day. As you're approaching the building it tells you if you can park in the building, where you can park in the building, it acts as your access control taking you through the turnstiles, you pay for your coffee with it, It will tell you using the phone.  No cash in the building, it guides you to the closest collaboration space and then you can control your environment with the phone. You can close the shutters, turn on the lights, change the temperature and if something's not working you can tell the FM again through your phone. This experience, It's like Pringles, once you pop you can't stop. So this is the way things are going. So making things sticky is yeah hugely important.

So parting question from you guys is probably how do we pay for this. So the good news is that is doesn’t have to be a zero sum game. So if we look at for example a world energy report,  they state that 82 percent of the global economic potential of energy efficiency is untapped. How long have we been doing green buildings? Long time, right. So we have a huge amount of potential value to create, money to be minted, gold to be mined, It's just waiting there.  The other soundbite I wanted to give you was from a European Commission funded report, which was carried out by the Wuppertal Institute in Germany and Cambridge Macroeconomics. They basically ran their survey across hundreds of buildings and they said the following. They said that smart connected commercial buildings typically command rents of up to 11.8% higher than non connected equivalents, and they transact for between 5 and 35% more. So these are massive amounts of capital that we can that we can potentially access. So my time is up. If you've enjoyed this conversation please reach out to me on LinkedIn and we can carry it on we'll be delighted to speak with you.  Thank you. 

Kanav Dhir: Powering the Future of Real Estate - Transforming a Trillion Dollar Industry

<— BACK TO OFFICE TALKS

---

VIEW PRESENTATION:

---

Kanav Dhir, SVP of Product, Vergesense

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Good afternoon everyone I'm Kanav Dhir from vergesense. I'm a product manager here. I lead a lot of our product efforts in the hardware and software side and I'm gonna talk to you about how bird sense is helping solve a lot of the questions of today. We have of our spaces around how the spaces are being used and also preparing us to solve a lot of a question we're gonna have tomorrow 

So we all know the transformation that's happening in our industry right. So there's a trillion dollar asset class. We have millions a square foot in our corporations and the way these real real estate is being used is completely changing. We have more dynamic workplaces it's not individual offices anymore. We're designing spaces to be used for interaction. And with all of these changes we need a way to understand how these spaces are being used 

there's some data that shows that with coworking spaces the day old 200 square foot per person is now going all the way down to 75 square foot per employee. There's a big change and we need to understand how it's being used and what can we do about it. 

The industry has a problem it's a little bit of a mismatch in the slide here but there is a lot of different types of data sources available and they're disparate. They're complex they're not fit for purpose. We have manual surveys which are actually really insightful data but they're infrequent they're costly and we have a lot of companies spending a lot of money on Wi-Fi data badge data and they're trying to eat soup with a fork. They're just trying to understand how spaces are being used from data that's not meant for that. And then there's data that's related to low quality sensors. 

I'm trying to use sensor designed to turn on lights to understand how my space is actually being used 

so advert since we're designing sensors that allow customers to get the power of computer vision. 

The technology has made accessible responsible and relevant for understanding how spaces are being used. This technology is 100 percent wireless. 

It can be deployed in minutes is a cellular backhaul so bringing low I.T. friction and the data itself is ninety eight nine 10 percent accurate and a hundred percent anonymous and we're able to do a lot more with it than we would think so versus the one of the main models that virtuous is deploy the main kind of value that we're bringing to customers around people counting so would the single sensor over a pot of desks and six to eight desks we're able to get not just occupancy but person count down to the desk level we're also able to deploy the same sensors in any space whether it's a soft seating area cafeteria lounge and we're able to get a person count for that space and even spatial awareness of where in that space people are 

that's just the beginning. 

Here's an example of a new model that we deploy to the customer so a customer is using virtual sensors to understand how their space is being used for several several months and they actually brought in CBRE to do a manual survey during the time vertex was there and there was two purposes of this. One was to make sure Virgin's is working and we found that Vertex was actually with a double blind test 99 percent accurate. The other was to understand are there data usage that the data is not able to collect other things in the ways people are using the space that we're just not able to measure. 

And one really interesting insight that they found was 25 percent of desks and 10 percent of conference room usage was passive meaning no one was there but they're not available for people to use so with this customer with the same exact sensors they're using for personal count because they're powered by computer vision. We deployed a new model that allowed them to not just get a person count for space but also understand if their signs of life. So both from a historical analysis recycled back understand what percentage of usage is falling within this criteria so they can make behavioral changes but in a real time perspective for live addressing for real time understanding what's available they're able to not you know lose out on occupant experience by sending people to a place that may not have people in it but is still not available for them to use 

this is these are just some of the beginnings of what customers are able to do with our sensors we have customers that are working with us and figuring out for facilities use cases. Can you identify how messy a space is. How much has it changed so I can actually prioritize which spaces too and to not clean. Rather than having a cleaning service go out every single day. We have customers that are spending millions of dollars designing furniture and spaces designed for collaboration and they want to measure. Is it actually being useful or spending money on. So we're working with the customer to design a model that can actually put a collaboration score on these meetings these interactions are people interacting. 

Are they using the space for individual work. Should we be designing different types of spaces and then anything from customer occupants using spaces that are probably not designed to be used to making phone calls and even down to. Does the water jug need to be refilled. 

All that is possible 

with a I so I allows us to have the power of not just what we can detect today but be able to expand that possibility into what we're able to detect tomorrow. I want to share a couple of interesting data elements with you now that we have a lot of you know customers Fortune 1000 that have generated really valuable and accurate person account data 

so across these companies these 10 companies you know Grant six months of data we polled 44 percent of meetings or one person meetings regardless it's conference room size 34 percent of meetings were two person meetings and only 22 percent of the meetings that we saw were three people or more. We all know there is a right sizing problem but being able to quantify it and attack it from actually how big the problem is it is pretty important data. We also do the same thing and understood a new trend of space which is unbreakable conference rooms. 

How are these performing so we found that you know unbreakable conference rooms collaboration rooms essentially are being used 73 percent of time by one person 20 percent of the time by two people and 6 percent of the time at 3 or more people. This is very insightful because while unbreakable spaces are significantly higher utilized than about conference rooms because you don't have ghost meetings you know squatters what you have to do is you have to design the space to account for the types of usage of these spaces they should have less square footage allocated to them because this is how architecture using it 

there's some very interesting data that we're starting to pull and see this. I actually found this to be pretty interesting for Book of confidence. We found that the most common meeting size is 30 minutes. And this is you know a lot along the lines of what you'd expect but for unworkable conference rooms because we're measuring person count and actually have this data reliable data. We saw that meetings were 10 minutes long most common. So maybe we should be using this design for better more comfortable furniture for short stays for poor standing meetings etc. 

So the last thing I'll leave you with is with the power of computer vision we're not only able to answer your question of today which is how our space is being utilized what are people doing. What is the experience how can we improve it but you can invest in an appreciating asset instead of a depreciating hardware device that can actually answer your questions tomorrow. Thank you 

Mordechai Katzman: Saving $$ on your Largest Real Estate Expense

<— BACK TO OFFICE TALKS

When considering your largest real estate expense, most people think of utility charges, insurance costs, H.R. fees paying for your employees administration and a slew of others. But would it surprise you if in fact property tax is your largest expense? In 2017 in the US alone over five hundred and thirty billion dollars was paid in property tax and upwards of 300 billion was paid by owners and multi-property portfolios businesses organizations.

---

VIEW PRESENTATION:

---

Mordechai Katzman, President & Co-Founder, ReThink Solutions

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Hi Everyone. 

My name is Mordecai Katzman and I'm the President and Co-Founder of a company called Rethink Solutions. Today I'm gonna talk to you about your largest or at least one of your largest real estate expenses that really any typical occupier owner and manager of a multi property portfolio is going to encounter.

When we talk about real estate expenses what comes to mind?

I think typically most people think of utility charges. Insurance costs you know H.R. fees paying for your employees administration and a slew of others. But would it surprise you if I told you that in fact property tax is your largest expense? In 2017 in the US alone over five hundred and thirty billion dollars was paid in property tax and three hundred billion dollars out of that or  upwards of 300 billion was paid by owners and multi property portfolios businesses organizations 

What I still find interesting is when I'm speaking to multi property owners and I ask them what they pay in property taxes, I'll still get answers that are really in the form of ranges oh anywhere from two hundred to five hundred million dollars. at least for me three hundred million dollars is still quite a significant range for one of your largest expenses. I think that's because it's tax and people look at tax a little bit differently. Frankly as soon as I mentioned property tax people's eyes typically glaze over and I think it's because no one has patients for tax or even property tax. 

They see it as a tax that simply needs to be paid and I'm here today to tell you that property tax is really unlike the other taxes. I think it would be fair if you're talking about income taxes or corporate taxes or even sales and use tax that are very fact based. You're providing the individual taxing jurisdictions information about your sales your profits your income and as a result they're taxing you. But for property taxes individual jurisdictions are telling you what the value of your property is and hence based on your value this is the tax you're going to pay. 

Property tax is different, as I mentioned it's really very subjective because you're getting values from the individual jurisdictions and I should point out that there's over 17,000 different taxing jurisdictions in the US, so when you talk about transparency and standardization it's all over the place. All the more reason that this needs to be managed and can be controlled because there is tremendous opportunities for savings. Just to stress on that point for a moment there was a study done by an international organization that measured all the various jurisdictions both in the U.S. and globally that found the average U.S. jurisdiction just got a grade from a C to a D when it came to transparency and standardization. Again tremendous tremendous opportunities here. 

I was recently talking to one of our clients the senior property tax manager for this particular portfolio and he had told me that the CFO now recognizes that they exist and that it's a good thing and a bad thing. I proceeded to ask, OK so where's this going. What's good what's bad. So firstly it's a good thing because he says now that you're such a significant line item on our balance sheet and income statements we need to be paying more attention. So whatever tools resources you need to mitigate and control this expense and cost, we're all for it whatever you need you let us know so that frankly sounds pretty good. 

So what's the bad thing. Well he said, Now the CFO knows that we exist, which means there's tremendous pressure on this department to do something about controlling this vast and wide expense property taxes are also rising and our research has shown that even when values are staying constant, meaning your values aren't going up, the taxes are still going up because those local jurisdictions, their fees aren't going down and they need to pay for their local improvements. 

Another interesting thing about property tax is that it's going to impact your organization in a number of different ways across all sorts of different departments. It would be very typical or traditional to find one or two people within a property tax department sitting somewhere in the office again which department they belong to is usually questionable as well but sitting there doing their thing managing their values managing their taxes and submitting some information to accounting but as you can see the entire property tax management process is very complex and it really touches on all sorts of different departments. 

So yes once you verified your payments you'll send it off to accounting but you've got your finance department doing their forecasts and budgets and isolation in a silo using their own data their own spreadsheets to determine what they think property tax is going to look like. You'll have acquisitions going about acquiring more properties for your portfolio. Sometimes doing their own work up or not even inquiring with property tax as to what the tax impact is going to be. And what I'm happy to see that that more recently this is now becoming a requirement. Certain companies aren't letting their acquisitions team acquire without having sort of a suggestion or a report from property tax. 

And the list goes on. It affects operations it affects your leasing in terms of setting your rents or even recovering tax from those individual portfolios. So again it affects the entire department. And today it's all done in silos. Each with their own.

That sets of data without one talking to one another so that's so we're where we come so far. So we've noticed that the property tax itself is going to be one of your largest expenses. We know that there are significant opportunities for savings there. And we know that up until now it's been fairly mismanaged as we've seen it's all done in silos all over the place. And there's a lot of data involved in the process itself. In fact from a data perspective because again you're getting data from so many individual jurisdictions. It's not uncommon for an individual property to have at least one hundred pieces of individual data on an annual basis. 

Again extrapolate this to a portfolio of two three hundred properties you're easily dealing with 30000 pieces of data every year. So that's a concern. 

So what do we do?

Well we have to rethink the way we manage your property taxes and that's frankly where we come in our solution lets you manage and optimize the entire process and bring everyone together on a common platform and what that's going to achieve and that's going to allow you to empower your users to make smarter better decisions when it comes to every aspect of your operation that that addresses or includes property tax and these aren't just buzzwords anymore. It's very important. Again all these technologies exist today and they fit quite naturally and very well within property tax the ability to collaborate with those other departments the ability to automate some of your workflow. So as soon as you get a new value forecast and Budget has that so they know exactly they can alter and adjust in real time you can integrate with other systems you can apply a eye to help you determine where the values are out of sync maybe certain values certain properties. This is what we should be looking at to appeal to further drive savings.

At the end of the day I think we're all trying to achieve the same goal. The goal is to maximize portfolio value. And what I'm here to tell you today is that rather than you know addressing the revenue side which a lot of systems and usually some of the easy pickings to be able to you know acquire better properties to make sure they're fully rented out to drive and maximize the revenue from individual locations. That's obviously a way to drive value and revenues. But another way to do it is also by looking at your expense side and being able to control the costs especially something as large as the property tax is going to have a significant impact on the bottom line value so quite a bit so far.

So just as a quick recap if there's one message I can leave you with is that don't ignore your property tax. As I said there's tremendous savings opportunities there. If they control all tax again you just need the right tools information and data available so that you can properly address it make well-informed decisions that will impact not just the tax side but all the other departments within your organization. Thank you very much. 

Karl May: Connecting People to their Work

<— BACK TO OFFICE TALKS

Enterprises have transformed how they use workplace and therefore IT for commercial buildings has changed. Legacy cybersecurity approaches no longer work. Join CEO Karl May dives into this shift and how how digital workplace infrastructure is tackling this issue.

---

VIEW PRESENTATION:

---

Karl May, CEO, Join

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Good afternoon My name is Karl May. Founder and CEO of Join, Join is based in San Francisco California. We are revolutionizing the way that networks are deployed and our mission statement is listed up here on the screen is about connecting people to their work what I'm going to do today as I'm first going to tell you a little bit about what we as a company do what we as a company do. I'm going to talk primarily about how we address or but some of the risks are with regard to cyber risk not only Visa V what a lot of people can talk about here which is for building management systems but also for your tenants. Need to talk a little bit about how we address it how traditional strategies simply fail and how we address it. And then if there aren't any questions afterward I'll be happy to address them. So let me give you a little walkthrough on us. Join us founded about two and a half years ago really with the sponsorship of several large Fortune 500 companies that saw a fundamental shift in the way information technology is consumed. 

We all know that Amazon but Amazon has done the computing and frankly the storage of data. We know what Salesforce started 20 years ago and changing the way software is consumed by our. Applications are consumed. And what we're doing is the same thing really to the network. 

The idea is that we can actually deploy a network or the edge of the cloud which is where everything resides nowadays in a in a in a neat in an apex in an in an OPIC centric not CapEx fashion that is managed and that is that lives in the cloud.  And that's really what what we do 

We focus primarily on delivering services over our own network. We are not we don't we don't interact with all the other carriers we've built our own and we deliver I.T. services over that network. Now if you look at a traditional way that companies deploy these tenants or frankly even building owners deploy networks in their buildings there is a hodgepodge of vendors they have to deal with their vendors for circuits their vendors for hardware they've got to put all these things together and make them work the magic that we bring to the table now that we provide all of this as an on demand service we build our own tech stack from the hardware frankly from the optics 

On up to the software and we deliver that as an on demand service in partnership with the owners of commercial real estate assets. Now I want to shift to the main topic that I want to talk about here which is cyber security risk. And one of the big issues that we're seeing more and more and we read about more and more is the is the attacks or threats that come from third parties not just not insiders but from third parties attacking corporate networks. And those corporate networks also include by the way the networks that are operated by building owners to which they connect their building management systems their sensors and other sorts of I.T. 

devices. This is a real live it's not live but it's a real output of a scan that we did in about 80 sites around the country. This is from one particular site. This is a real output of a Wi-Fi scan of one of the name of a name brand coworking provider probably known to many of you here. This is the level while everybody thinks I'm safe because I'm I'm using a VPN or UN or I'm encrypting my data or whatnot but they don't realize that I can actually see all their devices. 

I can see your Android phone I can see you. Which Mac you have I can see your MAC address. I can get all this data into a malicious outsider. I can now install a botnet and automate or credit cron job to go stand this on a continuous basis to figure out whether vulnerabilities and the reality is is that we have in many ways been far too complacent about cybersecurity. I mean we can talk about passwords we can talk about VPN or other things but the reality reality is is that many companies are far too complacent. 

If we weren't we would not be seeing the sorts of enormous breaches in companies like Equifax and target and so forth. Our view is very simple and that is that traditional ways of addressing cyber security are simply inadequate. The reality is as a conventional networking technologies are really designed to move on. I really designed to allow for discovery. I use some technical terms they're used for discovery of what other resources are sitting on a network. And the problem is is this opens up your neighbor network. So if you're a tenant in the building the the Wi-Fi network next door could very easily become or your network could very easily become a target of your neighbors. 

And so our approach has been very very simple. We work together with the owner. We secure the entire building and all of the network connectivity into that building to our private cloud our cloud is where we have all of our own connections to the public internet to public clouds to data centers to SaaS providers. We then put in place our own cybersecurity elements at that border which is where we deflect and or or detect and then deflect threats. 

It's where we protect against intrusions and so forth. And then we provide the entire solution into the building not only for the tenant but also for the building management system. So if you look at the rise of cameras based I.T. devices we provide all of those elements their own private network that is secured by us the premise on which we do this is something called zero trust it's actually a new concept. The concept has come about in the last couple of years. It's the notion that in a world where we have mobile workers we have our work that which we work on is sitting in the cloud. We have to have traditional perimeters anymore. And so therefore we need not to trust who you are because of where you are in a building or in an office but because of who you are. And so zero trust simply says that we don't trust anybody or anything. 

We validate devices and we develop validate users independent of where they are and only those users are the ones that get access. To the network resources or the services that we deliver. And that's really the fundamental premise of what Join has built on zero trust. To summarize let me talk a little bit about our business model and then I think if there are any questions I'm happy to know some. We don't see it as most. Most providers today deliver services that are based on old models such as bandwidth and and selling bits and bandwidth and so forth. Our model is very simple. We bring terabytes of bandwidth into a site into a building we charge per user per service type. There is no hardware no hardware to assemble. 

No it's not an IKEA model where you've got to go get 8 or 10 boxes to work together. We take care of all of that. It's an on demand service. You pay for a subscription you pay for it as your organization grows or shrinks you pay more or you pay less. And we believe that fundamentally applying SaaS business model principles to the network as well as all of our cybersecurity is what is going to change the way I.T. is consumed in the offices both of today and of the future. 

And I thank you very much for your time.

Sean Fitzpatrick: Faster, Smarter, Easier - A New Era in CRE Valuation & Underwriting

<— BACK TO OFFICE TALKS

CRE is evolving and technology needs to evolve with it. Coupling years of experience consulting for commercial real estate decision makers with technological know-how, rSquaredCRE launches to tackle advancement in CRE valuation and underwriting.

Filmed in Partnership with Realcomm | IBcon

---

VIEW PRESENTATION:

---

Sean Fitzpatrick, CTO, rSquaredCRE

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

So CRE is evolving and what we've found is while our industry is rapidly evolving the technology hasn't quite kept up pace. In particular we're expected to close acquisitions now and half the time that we previously did but our software isn't keeping up with the task. 

So valuation software in particular hasn't met our expectations. We're still using desktop software, we're using software that was built over a decade ago. And while that's okay it's not going to get us to the efficiency that we need to be as an industry. So things like multi day training sessions to get you up on your valuation software. We think this is really a symptom not a solution. It should take you an hour, two hours tops to get you up on your your CRE software. 

So we're going to show you a solution here in a moment that hopefully will solve some of those problems. 

Our company our squared CRE is a brand new company but we're based out of an original consulting company. We've had hundreds of years of experience producing software. We have two existing software applications right now, our abstract and our budget that our SAS software applications in use for over a decade. So we're not new to this game where we're very much in a technology leader. We've got wonderful very popular clients, clients like Hines, EOP, Griffin Capital, First Capital to name just a few. 

These clients have reaped the benefit of our experience are hundreds of thousands of hours of modeling commercial real estate software. So we used our experience our frustrations that we found in modeling software to come up with a new solution a solution we think that the industry will greatly benefit with.

Here's our mission statement. So we're of course all about empowering CRE. We feel that our solutions will allow the industry to grow more quickly to have less friction and to get what we all need to get done which is valuations more efficiently processed.  So what do you need? What is absolutely necessary to solve this problem? Your solutions have to be SAS based. There's zero cost of ownership as it relates to owning hardware. So your TCO is going to be lower. You don't have to make those commitments, there's no sequel server upgrades. This is what is required for 2019. We cannot be using desktop software. We can't use software that you have to be at your office to actually be able to use it. You've got a SAS solution. All you need is a browser, ubiquity anywhere you have a browser. You're going to be able to use our application.

So again if you've got to spend time training people, if people have to guess what it means in a particular field you're going to introduce errors, you're going to have problems. So our application is intuitive. We have something we call an input carousel so you don't see hundreds of columns, you have to studiously scroll through the input carousel shows you just the field you need to see and just the areas you need to see them. So you're going to realize a much more efficient more intuitive interface. The UI feels kind of like a rich desktop application but you're in a browser so you get all that benefit of the rich desktop but you're in a browser environment and fast.

So we've got all sorts of hooks in the application. We've got hotkeys, so hotkeys to navigate to different places quickly hotkeys to add things to delete things. In addition to our hotkeys we have things called walkthroughs. So we can walk you through common things so you'll find in the application that we can get the data calculated the data in and the data out in the most efficient fashion.

So one knock on a lot of the incumbent software is that they're just pretty close environments and we built this with an open environment we want you to get your data into and out of our application with no friction. We have what we call round tripping of Excel so you can export your data manipulated in excel and return it. And while that's helpful for a single asset if you have hundreds of assets this can be a huge time saver. Take inflation for two dozen buildings change it in one place upload it simultaneously. 

There's a lot of benefits of being open. And we also open in the ability to consume data from other applications out there. So we've got a very robust VTS integration. We can import deal data from VTS we can import portfolio information from VTS we have links to legacy software. So we wanted to be as inclusive as possible to gain as much traction as possible our application is available for third gate trial for free. We don't want anybody to not have the opportunity to try to use the software. While you're using it, you have the ability to create snapshots. These are little things you can email anybody else or you can share the snapshots via our own email links. So you can send out to as many people as you want and get them up and running on the application.

So obviously everybody wants to use a DCF application that's accurate and it's something you'd expect. We try to bring it home further by giving you the ability to see all of your reports in excel. So these are not just CSV exports of data. This is formulas, these are presentation quality reports and that ability to vet them in excel guarantees the accuracy. 

Finally we need things to be transparent, so you can look at that formula, we have wonderful audit reports. A lot of times things like recoveries become black boxes you don't understand how the numbers came to be. When you see the formulas you can confirm to yourself that the application is doing precisely what you want. 

Collaborative. So we've got this in the cloud SAS application. We can have multiple users simultaneously editing the same property, they can be editing the same property, they can be running reports, they can view doing portfolio analysis, they can be working on multiple properties simultaneously so there's no ability to have to check out a property check in a property all of it can be done simultaneously allowing for a more collaborative environment. And again you can send out those snapshots so it doesn't have to just collaborate within your organization. If we collaborate with organizations around the world. 

Our underwriting work this may be our single biggest differentiating factor. So you get this rich 15 to 20 page workbook that has all of the analytics that are typically very difficult to find within these reports. So we've got excel where everyone kind of does their last mile analysis. They're going to layer on debt they're going to put in partnerships going to tiered participations. All this stuff is typically done by taking canned reports cutting and pasting into Excel. 

You know cutting and pasting into Excel you're going to introduce errors.  You know it's going to take you a long time. So we get rid of all that by having this underwriting workbook. We think this will save hundreds of hours for each client each month.  So this is the kind of stuff that we think has to be in an application to be fast and efficient in 2019.

So what we're talking about is a new era. were going to have a new era where people can openly collaborate fast efficient intuitive. No need for weeklong training sessions multi day training sessions. No need to engage another consultancy to get your users up on the application. Our DCF will be that solution that allow you to cleanly efficiently model from start to finish your last mile analysis and excel and we think we will change the industry with it. 

Thanks for your time.

Alan Ni: Smart Building Connectivity: Is 5G the Panacea?

<— BACK TO OFFICE TALKS

Filmed in partnership with Realcomm | IBcon this talk navigates the current climate of CRE connectivity - noting the vast majority of misconception around 5G connectivity and what the future may bring.

---

VIEW PRESENTATION:

---

Alan Ni, Director, Smart Spaces & IoT, Aruba

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Afternoon I'm Alan Ni,  I lead innovation strategy on smart spaces in I.T. at Aruba. I'm here to talk about smart connected buildings and specifically around 5G. There's been a lot of conversation about 5G at this conference and being a leading vendor in Wi-Fi Networking and the de facto way of connecting mobile devices within buildings. We obviously have a point of view here and really wanted to talk with you today to address the question. 

So in my talk I'm really going to talk about these four specific topics right. What is 5G?  at this point the marketing, it's been in beyond overdrive and you know frankly we don't know what the newspaper is going to say, so I want to talk a little bit about that. But more importantly as real estate professionals what are the use cases that we should really care about as we design buildings not only for tomorrow but for today. Then I want to talk a little bit about the technology investments that we're seeing not just in 5G but just in mobility in general. 

And then finally a lot of the new things that allow the new technologies are coming to fruition now and actually should force a lot of us to rethink the status quo, and can be disruptive. So I want to just leave you with a few parting thoughts in that area. So let's talk about 5G what is 5G. As I said you look at the mainstream press whether it's business press technology press every day there's some other form of 5G and it is funny I was at dinner yesterday and one of my colleagues said 5G is like Whatever the carrier selling this years can be 5G. 

So you know we hear about fake 5G real 5G etc. So you know if I had to summarize it I see 5G as these three things right. It's really a set of performance targets and I'll talk a little bit more about. That fundamentally at the end of the day provide faster speeds faster really shorter latency is a much better experience for all the new applications that we need to serve users, things, systems buildings. But also I think no one everyone could agree here.  

There's a lot of marketing around this. I turn to Wikipedia you're not always the authoritative source but if you look at the definition Wikipedia it’s actually written very very carefully right. 5G is generally seen as a first generation cellular technology. The industry association the industry being the Cellular Association defines it as this thing called 5G new radio. But then you look at the bottom there's this cryptic thing particularly for folks that maybe are in the technology world here. 

They talked about these requirements around the international telecom union this I.A. 2020 standard. And when I think about it I think about it from that perspective. So what is that standard? when you know every G you know whether it's first generation sector operation third generation forget about the technologies, they go in they mean say hey we want to actually hit a couple of benchmarks.  I love this diagram here. It's actually a chart despite your chart of you know all the key pieces that they were trying to achieve. 

What you see in the middle of this thing called LTE is basically fourth generation technology the stuff that we're using every day. And as you can see as they move to fifth generation technology that pie has expanded and they want it to really improve a lot of these things some of these things that you know the non technologists wouldn't know. But let me decipher for folks that are in real estate in the process of trying to build buildings. These I would argue are the orange ones are those things that we should care about if we're starting to build new Smart Connected Buildings. 

We want to obviously have greater user experiences whether that is faster speeds, shorter latency. We want to design for higher capacity within the building and we'll talk a little bit about the end points right.  Because we realize it we're starting to get to an area where as we say wireless if you can, wired you must but I'd argue the most important thing is really to make sure that we can support more use cases. And one thing I do agree with, within 5G there's a radio layer and that's a lot of where a lot of the press is.  You know where the peak speeds etc. 

But there's actually a lot of investment in what they call the core of the network to say regardless of what radio you're coming on whether it's a cellular radio whether through Wi-Fi the experience that I have as I transition and move around is consistent. 

So let's talk a little bit about the use cases. I took this picture because I love this as I see it. This is the marketing Ray and this are market 5G. You know how fast can you download every episode of The Simpsons or 500 episodes probably  4K etc. and know 5G could deliver to you in seconds or minutes right but let's think about that. That's not really a practical use case as we're starting to build buildings. These I would argue are really the use case that we need to think about, user mobility, user mobility in buildings right. 

We spend probably about 70 to 80 percent of our time within buildings. Wi-Fi as I said is the de facto way of connecting most people whether in your home in a commercial office building et cetera. We hear a lot around Das, CPRS you know those are connected just one piece which is prior phone the thing that has a SIM card but as you know many of you in the room here you're probably carrying possibly a tablet, a laptop. I would probably venture to bet that most of you probably don’t have a SIM card associated with that device. 

So that's typically been something that the tenant actually provides. There's this other thing now if you think about it is building IoT and that's the heart of what Smart Connected Buildings. It’s  no longer just the people in the building and the smart experiences but the building itself that's being connected. The vast majority of these devices are very low power, they probably won't take a SIM card.  If you talk to any vendors in these spaces, every penny matters are trying to make a sensor as cheap as possible and they're not using SIM cards or any license technology. 

In many cases they're not even using Wi-Fi. They're using other lower power sort of technologies. Fundamentally, you see a big shift right in the past connectivity was a responsibility of the tenant.  Now as you start getting into building IoT you know is it the lights maybe that's provided by the owner the operator the developer. Is it the windows? maybe that's the owner operator or developer. You’re starting to see iPads, smart furniture, that's the tenant right. So how are you going to support all these things in this new paradigm. 

Are we going to buy point solutions for every one of these products and build separate infrastructure. Or are we going to think about it from a platform perspective? Then the last piece you may not think about it from a connectivity standpoint but there's a lot of interest at this conference around experience and there's this idea of a tenant base or building base experience and in a lot of that is being driven through location and if you think about that I need an infrastructure once again to provide location. The cellular network 4G, 5G does not give me indoor G.P.S. 

So how do I do all of this. We can talk a little about the next generation Wi-Fi access point but I won't even call it the next generation Wi-Fi access point. 

This is more than Wi-Fi, It's really the next generation access point. So wanted to talk a little bit about Wi-Fi and just a lot of this stuff that I've been hearing here and there's a lot of that information I'm hearing that is categorically untrue. When they talk about Wi-Fi you know a lot of people are not aware there's actually been six generations of Wi-Fi. But we've been just collectively calling it Wi-Fi.  Maybe you've been at best buy and you had to buy the next one you may have seen BAC and now these cryptic sort of names one of the good things this year is that the Wi-Fi Alliance came around and said OK we need to make this like understandable from a consumer perspective. 

So they started to actually brand the latest version is actually something called Wi-Fi 6. You're going to hear this more so a total of an X is Wi-Fi 6. They actually went so far to even go backwards to say AC which was introduced about five years ago as Wi-Fi 5, Wi-Fi 4, et cetera. Now if I superimpose this on that chart I showed you before around 5G. This is how it lines up and you can see if we're trying to deliver that 5G experience the speed whenever within a building Wi-Fi delivers if not exceeds all those key metrics that we care about. 

Now there is one area here’s where it's more defficient than 5G and it's mobility. And I've heard a lot around people saying that Wi-Fi doesn't work it doesn't hand off etc.. And here if you looked at it would maybe crowd cooperate that but if you look at this when they talk about mobility they have that mobility moving 500 kilometers an hour. Now who moves in a building 500 kilometers an hour. Now who moves in a building at 500 kilometers an hour, I don't think any one of us does. This is really the envisioning you know I'm on that high speed train in Europe, you know, maybe browsing something and having continuity of service. 

Right. So if you think about this there's actually a lot of good senitry you know within a building. We feel that there's a lot of this real technology capability and Wi-Fi 6 delivers the promise and all the stuff that they're talking about for 5G now. Right. The latest Samsung Galaxy phones have Wi-Fi 6 baked in them now. The infrastructure and you'll see this access point that we have and a lot of our other folks in the industry we've been delivering Wi-Fi 6 access points since last year.

 And for the more technical folks here I'll be really quick, you know it's sharing many of those same technologies that 5G has. If you understand some of these things like, channel widths multiple antennas OF DNA technology, we're borrowing back and forth between cellular 5G and Wi-Fi. But really the more important thing is really the use cases right. And we're delivering them today. So this latest generation access point obviously has new technology like A X if we think about it from delivering voice one of the more interesting things is delivering voice in a building and as I said, I heard a lot of disparaging over Wi-Fi doesn't work well for a voice is too hard too hard to get people on. 

We have a very interesting technology called Pass point and we're demonstrating this downstairs, where individuals with a phone with your SIM card, the access point you're going to automatically join the access point. Right. So one of the big frictions in Wi-Fi as you walk into a venue I need to understand what the network name is, I need to go into my settings join it right and then at that point I don't even know if I have security it's prior open network. With this new technology called Pass Point which has actually been around for two years but now really coming to fruition and starting to get real carriers online. 

As I said if you have some of the major carriers answers when you walk by our booth you're just going to automatically associate to it, there's no friction. More importantly you're getting onto a secure network with secure credentials. In our view point is you know now voice which traditionally you've put a dedicated system in, right, at two dollars - two fifty cents a square foot  is now just a service that we could deliver into a building the next generation access point.  

A lot more interesting too is building IoT as I said lights, sensors you know furniture, people counter sensors, are not coming through Wi-Fi in a lot of cases, they're certainly not coming through cellular, 5G, cellular, they're coming through things like Bluetooth 5, Zigby this next generation access point is actually providing that sort of connectivity. Then you know indoor location we talked about it, this is now in the second generation same infrastructure effectively putting G.P.S. above your head in a building to allow people to navigate. 

And then finally the last piece you may have heard prior about a year or two ago, Wi-Fi hacks around Wi-Fi security standard WPA2,  WPA2 is actually over a decade old so it's like geriatric. the newest access points a new standard WPA3 that really closes a lot of those gaps are now in this specific sort of next generation access. 

So really the final thoughts now that I've shared with you a little bit in terms of the holistic development the use cases et cetera as real estate professional’s how does this disrupt how what should we be thinking about. So one is around voice services in this new building keeping people connected. Right. I think I still hear and why we're doing investments with this organization, with this group, is that up until now a one to one association is set to deliver high quality voice you have to do it through DAS or small cell etc.

Not to say that you can't deliver it right but making it exclusive, that's absolutely false. We're delivering that you're likely using Wi-Fi at home potentially for phone calls. Right. We're delivering much much greater quality of service within a building. We can deliver it to the majority of buildings where a lot of these DAS systems may cover 2 or 3 percent of all reasonable space. To this idea of IoT gateways if you actually deployed an IoT gateway to support your lighting system or something, you wanted to avoid you may not have heard of the term shadow IT, if you're doing it you are shadow I.T. 

These are actually devices we have in our building now they're just sitting on the carpet sitting plugged in then if someone just tripped over I have no idea how to manage them, where they are, you know are they a security risk or not. They're really the final piece here, and it's around you as a real estate developer even us as a vendor. Traditionally a lot of this coverage right whether it's networking coverage you kind of placed upon the tenant and the tenant in his or the organization suites you may have connectivity but now the expectation to have consistent experience throughout the entire building is a lot more social services you know club lounges whatever that a lot of developers are now putting into the next generation of buildings. 

So you as one of those developers really need to start thinking about the services that you need to deliver holistically and oftentimes in the past as an afterthought.  The only thing that had to do was deliver DAS or deliver if you could afford it and that would provide cellular services. But what about all those other IoT devices right. You would do smart parking or door locks and other things right. You need to start thinking about a much broader infrastructure play for that. Right. So we're encouraging really commercial real estate to start thinking about this not just for shared spaces but potentially for tenant spaces and for us as a vendor that's disruptive to us to. Our core client has always been and we focus really on the tenant occupier less so on the commercial real estate folks. 

So that's that's really going to wrap it up here. Thank you very much. We've actually done a lot of thought leadership this week. Feel free to reach out to our website. We've published a lot on this and we're just coming out. Thank you

Greg Fasullo: Empowering Multi-Site Owners & Operators Through Technology

<— BACK TO OFFICE TALKS

By elevating the level of transparency within a portfolio of mixed assets, owners and operators can use actionable insights to improve the performance of their portfolio. WATCH to learn more.

Filmed in partnership with Realcomm | IBcon.

---

VIEW PRESENTATION:

---

Greg Fasullo, CEO, ENTOUCH

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Good afternoon everybody, my name is Greg Fusillo, I am the CEO of Entouch.  Entouch is a smart building automation platform currently focusing on the large number of multi side distributed facilities, portfolios are not large centralized buildings and what we view that we do is we enable the promise of smart energy technology in facilities that they are mostly left behind by smart building tech and the infrastructure. 

In particular our clients are either operators or tenants in these facilities. They could be the landlord as well. What we enable to do is connect the building take data and enables sustained reductions on energy maintenance and capital expenditure. I'll focus a little bit on energy to Star because energy is a great opportunity. You hear the speeches here. There are significant opportunities to address energy efficiency in buildings with relatively modest capital investments and process investments and very large returns.  So we all know there is about 6 million commercial buildings in the US, about 90 billion square footage. 

Those buildings use a lot of energy. I actually put this slide together 7 quadrillion BTU’s. I don't even know how many zeros you had to put on an excel spreadsheet to calculate what a quadrillion was I had to look it up. About 1.2 trillion kilowatt hours of electricity which again big number. How big is that?  the equivalency in coal fired power plants 360 coal fired power plants are required to power all the commercial buildings in the US today there are only 359 of those plants in existence. 

So essentially at buildings we're 100 percent efficient. We can eliminate all of the coal usage in the United States, a fairly audacious goal.  On top of that, if you look at EIA government estimates, a large portion of energy and buildings is actually just wasted. Wasted due to inefficiencies, its wasted due to lack of people and processes in those buildings. While we hear a lot about smart building technology, the building to connect the assets in a facility, the climate control the lighting to use database on occupancy to drive changes in behavior in the buildings and optimize energy efficiency, the rally is electricity consumption in buildings is actually going up. 

So why is that. If we've got all these great technologies if they have fantastic ROI’s why are we having issues where energy efficiency is not catching up with buildings. And the dirty secret is, most of these smart building technologies are designed for facilities teams they're designed for organizations that have people on the ground, that have people and process to drive change. They're not designed for the majority of buildings that do not have onsite facilities. 

Those organizations are distributed typically geographically they're centralized from a small corporate facilities team but they simply lack the people, the processes and the priority to focus on energy efficiency at the regional. 

Now we think of buildings we think of large buildings like the one we’re in.  Typical class A building here where there's a hotel or it's an office very large square footage, buildings with significant infrastructure, but the reality is that it's just a small portion of commercial buildings. Most commercial buildings are actually small less than 1% of buildings by building count are greater than 200,000 square feet that only represents 20,000 or 20%  of the available square footage and buildings. What are these smaller buildings?

Well their buildings and services that you know well.  They are retail stores they are restaurants they are health and fitness chains there are financial services the small facilities that are distributed geographically that have very unique pain points very unique operational priorities from a large building that has onsite facilities and can be operated in a different way with a smart building technology platform. Many of these organizations do not have the onsite facility, they've got a remote team. If it's a thousand location enterprise a health and fitness chain you do have people in corporate who are thinking about energy efficiency. They're thinking about investments in technology but locally they rely on essentially maintenance people. 

Occasionally you'll have regional tech or a facility person. But the people are thinking about energy and efficiency are not on at the buildings. In addition there is a trend to rely on outsourced services. You may have an onsite maintenance tech you probably rely on somebody that provides IFM to actually do the work in your facilities. So an organization in charge of keeping the lights on and keeping that facility running. But the line item that they touch on maintenance is a very different line item for a strategic item like energy. So they're fundamentally dis aligned with an incentive to reduce energy consumption. 

Then you rely on the manager so the P&L typically rolls up to the regional manager or the local manager the store manager, that individual to some degree, has visibility to energy inefficiency because in their P&L they have much bigger priorities running the organization dealing with staffing and the top line issues at that location. 

To put that in perspective a Navigant study multi site operators in 2016 essentially talking to folks and these people have building automation systems they've got a range of technologies roughly a quarter felt that they had a smart building technology strategy for their organization. So even though they've adopted a building automation system or a BMS or an energy management system the past their disconnected assets and they really didn't feel they had a connected smart building technology strategy. 

Sixty percent were aware of the pain point they're aware of energy they're aware of sustainability challenges they are looking to do better and operate more efficiently.  They're just now starting to evaluate what they want to purchase. And over half of them, when they're surveyed will tell you, they'd actually like to outsource this in the service. So what they're telling you is they also realize we have other priorities as we're outsourcing non core services energy management optimization of our energy footprint probably something we're not the best at and we're looking at providers that can do that for us as a service. 

That's where Entouch comes in. What do you have to do to solve this problem? Well at heart it's not a technology, it's not a hardware, it's not a systems level problem. It's a holistic software and services problem. The buildings may or may not have a connected system. You need to deploy some way of connecting and access and those are the equipment in those facilities. The buildings when they're connected you've got a commission. So if you connect the system is built you've got to know the various conference rooms you've got to know where occupants are. 

You have to know how that building is supposed to occupy. Think about doing that over a suite of outpatient health care clinics that are all different in size of different assets on the roof have different operating hours in different parts of the country. How do you deploy at very low cost very high quality has to be done with software. Now it connected that building and I've got this firehose of data and all is great information coming in. I can figure email alerts on every time there's a problem. The next thing I know is I my email box is filling up. I turn off the alerts. There's got to be a process that you can take that data coming in. You can analyze it and you can quickly enable support for the ongoing operation of the site.

It has to be integrated. So I've got a services provider I've got an IFM provider. They are the boots on the ground they've got the work order system seeing the mess that I use. Any new solution cannot be a point solution that requires additional work, to extract value it has to be integrated with the existing workflow. That's probably the most important point on this slide. Most legacy systems were independent point solutions. They were not integrated. They were not open and essentially people have deployed these systems and they're a little bit stuck. How do I extract value out of what I've already invested. 

They're very basic users has gotten very easy to use and then ultimately to effect change in these distributed facilities. You don't have a facility team that can optimize HVAC temperatures or do maintenance initiatives to try to improve the efficiency of the rooftop that the systems have to be autonomous to be able to adjust. They've got a watch. They've got a rack based on user behavior and ultimately affect the change to drive real change. 

Entouch does this through a software platform today, we've got about fifty thousand of our systems deployed in the US leading multi site operators.  We start with the ability to deploy and commission. We are a software platform so this third party tech shows up on site, he's got the Entouch app on his mobile device. You can install our platform. He can connect with existing assets and then we can remotely commission that design. Now we've got a high quality installation and we're collecting data. We're streaming it to the cloud. We start doing things with it. So we collect that data we analyze that data. We apply machine learning. We help you optimize the operation of the building autonomously. And now as a facility individual you move from having no intelligence of what's going on and having real time data and the reactive tasks that are associated data. 

We've integrated with your third party services provider and ultimately you can take this organization. You can start pulling the young in you can start feeling figuring out opportunities to optimize and continuously improve. So what we enable in organizations that traditionally were reactive there are maintenance and support they're keeping the lights on of these facilities but they don't fundamentally have the ability to optimize to transform that facility organization into one that can be strategic that could be thinking long term and frankly could be pulling levers to optimize and reduce energy in those facilities. 

So in addition to the operational benefits most of our customers are the facility organization and corporate they love the fact that now they've got an automated enterprise ultimately the business case is driven by energy because that is a large line item this year. Our average customer today saves about 13 percent on their energy bill. Not bad. It's about two hundred million kilowatt hours and over 4000 tons of carbon that we are saving today on an annual basis across our clients. And what they really like because that's equivalent to about 20 million dollars a year of economics. 

So that's Entouch. We enable and frankly we deliver on the promise of smart dollar technology and multi site organizations. Great. Thank you very much for your time. 

Joe Du Bey: The Experience Era - Sweeping Major Industries in the US

<— BACK TO OFFICE TALKS

Joe Du Bey, CEO of Eden helps navigate The Experience Era and how the nature of experiences are transforming industries across the US. This talk showcases how different demographics of people value experiences and how that value is fundamentally shifting the business of entire industries. With real estate taking center stage, Du Bey brings forth examples from industries such as fitness, music, retail, coffee, enterprise offices & more.

---

VIEW PRESENTATION:

---

Joe Du Bey, CEO, Eden

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Hey my name is Joe Du Bey and I'm going to talk today about the experience era and how it's affecting commercial real estate. So what is the experience era? The main thing to take away is that the world is changing. It went from before being where it was something that you know you served any one industry and maybe sold a specific product and service. Today we're all actually in the experience business to think about commercial real estate today versus what's going to happen. It's a largely offline world. And that's it's something that is focused on the space and less on the people and the experience of them.

And that's something that's about to dramatically change. So what is causing the experience era in one word millennials today. Millennials are the biggest cohort of any population. This is a really substantial shift. And this is something that is affecting the preferences of the workforce itself. And the reason why that's so is because millennials are different. They actually value experiences over products. And this is a critical thing to understand once this is grasped. It all starts to make sense.

But the majority of one else would rather spend money on an experience than a thing. They're wired differently even when it comes to work. The majority of millennials would take less money. If they're able to have a better experience at the office if they felt the experience reflected themselves. In contrast in case you don't think that's different. Only 9 percent of baby boomers would do the same. They are wired a bit differently and we need to adjust to their preferences. So what makes something fit the experience area we've discovered there are six hallmarks to this new time.

Specifically you can see involves enabling technology. It's at least made more efficient through technology. Any one of the major experiences that consumers in enterprises are going through in the experience area users are empowered they have voice they're able to customize their experience. This is critical. It shows up in amenities. It shows up in services inexperience error people care about community and they're building community around these experiences that were previously about a service or product. It's really the community that wrap around it. Things have meaning. It's not just about the coffee for instance it's about why it's ethical inexperience era quality matters a lot especially because these millennials are investing in the experience so it makes sense that their since they're shifting money to that they'll care more about the quality of it.

And the last thing is design inexperience error. You'll notice that if it starts to feel to you like more and more things look like the inside of an Apple store it's because more more things do look like the inside of an Apple store. Millennials care a lot about design and it's showing up everywhere. So let's talk about a few industries and how they've been transformed already in the US. There's the music scene if you remember from 20 years ago when you show up to a concert there were a few people playing music and that's what a concert was. Now when you go to a music event it's really much more about the experience. You walk in and it's a crowd of people who are seeking like minded folks.

It's immersive. There are lights there's artisanal food. Yes someone's playing music somewhere but that's not actually the primary thing. You might take away from being at a music event these days and is popping up across the US. Now let's talk about retail. When you used to go to a mattress store it was a roomful of bunch of mattresses. Now you go in and it's actually limited minority might be a mattress. We're walking into is a place that's beautifully designed full of narrative really speaks to millennials. When you used to walk to a gym it was a place full of heavy weights. Now it's if you walk just like Soul Cycle what Barry's Bootcamp.

It's a group of people who are building community. They might feel even you might send something almost religious around the dedication to this specific group. This room and it's beautifully designed. If you think about consumer coffee it's again something where you know it's the kind of thing where people use to go and literally just get coffee from a diner. Now it's a beautifully designed room. Starbucks even calls itself your third place. Recognizing that there is a different kind of feeling that comes in to a coffee shop today and now you can start to see it in commercial real estate just that just starting to.

And that's something because in the past it was really a place where you got work done. If you look at this market leaders Historical Office now with Google there's a climbing wall. They care about customization choice services and they know this is critical for them to actually hire the very best talent. And what is an overheated talent war. The thing to keep in mind is that 99 percent of commercial real estate is offline. This is just starting to happen. And over the next couple of years you'll feel this in a really big way. This beginning it's experience matters because in the first couple of years whenever there's a tectonic shift those who adapt early those are the ones who get to have outsized influence and kind of pain in the future whereas we fast forward or in five years.

The folks who haven't become the laggards they're the ones who threaten the actual performance of whatever their underlying asset is. How will this change commercial real estate. What tactically do you need to do to enter the experience era. Well specifically think about your building across a bunch different dimensions. A big primary one is how do you think about lease terms. It's something where in the future people want to have duration of lease that reflects their actual needs which isn't decreasingly two to 10 years and much more let's say nimble outside of that space controls today it's something where people have almost no control almost no voice that is changing rapidly through technology email to enter from from accessing the building itself to requesting services.

You can now actually have control over almost anything. Tenant feedback historically ignored with a landlord or building and you're really thinking of it places us as a space as opposed to thinking of the people inside of it as customers in the future and experience first building. It actually solicits feedback. It cares how its customers are doing outside of that the brand of the building itself. This is something that's critical in the past people might not even know really what kind of building they're in who the owner is who's managing it. The future is a much more white labeled experience where the building itself has a brand that people care about outside of that something that's really critical is what do you provide in terms of services.

In the past nothing going forward amenity rich people should be able to get any kind of service they want from food to any sort of wellness and like yoga or whatever they might want they need to be able to access through their building. And the final one community. Right now buildings are a missed opportunity everyone in it could feel something. It could build loyalty. Instead today it's mostly a box that has no connectivity the experience era has arrived and there's no turning back at this point.

Over the next couple of years everything will change. Commercial real estate and it will no longer be about the space it's providing an experience with space attached. Eden is ushering that in for all of the commercial key stakeholders from the occupiers and the companies to the landlords and the property managers and we're enabling you to provide an experience first building for your tenants

David Unger: Full Transparency through IoT

<— BACK TO OFFICE TALKS

Filmed in partnership with Realcomm | IBcon.

From the edge, through the fog and into the clouds - a deep dive into the core components of IoT in commercial real estate today. David Unger, CEO of Sentient Buildings helps navigate current pain points in IoT and cloud infrastructure as well as how technology is bringing forth new solutions.

---

VIEW PRESENTATION:

---

David Unger, CEO, Sentient Buildings

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Good afternoon everybody, My name is David Unger. I'm the CEO of Sentient Buildings. Sentient Buildings is a wireless IoT device infrastructure company where we integrate wireless devices to traditional BMS systems, platforms and we bring all of that data up to the cloud securely and reliably. 

So my presentation today is going to be on creating full transparency in buildings through IoT technologies in the subtitle - from the edge through the fog and into the clouds. 

How do you get full transparency of your data in/and controlling that data from the cloud back down to the edge.  So you're just looking at how we put these pieces together, what are the core components of an IoT network or design? You have the cloud the cloud's where you know the data is going to ultimately be pushed too, you have your subject here in the middle, the building, the edge is your edge device network. 

So how does that network function?  How are you getting data from the very edges of your building and not just from your central plant systems or from air handlers or from other operational technologies in the building? How do you get into the tenant spaces and collect data on temperature, humidity or how do you control individual terminal units in apartments and other things?

How do you get bi-directional with monitoring and control to the edge? then the fire concept here is all about distributing that computing power, right. So how do you distribute your computing power between the cloud and the edge?

How do you maintain it, manage your security, how do you maintain data across all systems across both the cloud and the edge? So there is talk about how those pieces get put together but let's just talk about some of the traditional kinds of problems that we try to solve for building owners and operators. The first one is wires. Wires are very constraining in buildings, in wired systems and wiring up sensor data and wiring up devices and control points. It becomes expensive to maintain those systems and you don't typically deploy to the edge in a way that makes sense for the building. Wired is a mass infrastructure, it's expensive to install maintain upgrade and extend. 

What we find is while you could potentially control every tack in a building, every electric baseboard heater in a building while you could do these things they're not economical or feasible in old construction or in retrofit projects. Paybacks for the owners to deploy to the edge are too long for them to even consider.  

What we really look at is how to achieve this full visibility and do it reliably with wireless. Wireless technologies typically in a lot of ways, is unreliable. It might be okay to monitor a temperature sensor but if you're controlling somebody pee tac unit or if you're doing something that needs to be done reliably and consistently you know you can't be subject to wireless interference or other problems that might arise with wireless device networks. 

So the way we look at this is we've divided wireless networks into two typologies. We look at the Star Network as having a central hub right that can coordinate and monitor devices that communicate directly to it. That Star Network provides basically a local area or a personal area wireless network within its face. 

So within a specific space it could be an apartment could be an office space but you have this local area wireless network and you could actually deploy on this network because it's now very short range. When I say short range I mean like 30 to 40 feet. 

If you could deploy low to no power and end nodes at the edge that can be powered by ambient light can be powered by kinetic energy so you don't even have to put batteries in those devices and it could be as simple as peeling and sticking something on a wall like a thermostat and getting readings back to your hub. The mesh comes in where these hubs act as repeaters on a mesh. 

So you have your star network at each node and each hub becomes a repeater in there you form a building wide area network where all the mesh nodes communicate with one another and they report back to a central gateway or central system in the building and that way you achieve full reliable coverage across the entire site. 

Once you have the wireless network in place, what you can do with it? What kind of devices can you deploy and you could deploy these devices very cost effectively, temperature sensors actuators  hours occupancy sensors energy meters and you could deploy them without having to run power or communication wiring to them. So it becomes a very inexpensive deployment and not only that it becomes reliable in terms of wireless range and communication. 

Now you're bringing all of the wireless data back to a central point. That's great. But now what typically happens is the data still remain separate from existing building management systems. Wireless IoT data should be simply extending existing BMS platforms. They should not be their own platform or their own system. The latest IoT device networks are typically proprietary. You have to use some specific kind of sensor, they might have their own portal platform or their own local client to access the system. So you want to basically build a platform that allows for extension of this IoT device system so that it can be used by other systems in the building.

The other thing that happens across multiple systems is your data definitions are not in sync. They're not homogenized. They're not normalized. The way that you define your data is different across multiple systems so you need a simple way to bring all that data definitions together so that they're defined correctly across all your platforms so that you can identify systems and platforms consistently to perform analytics, to run alarming and create issues across the system. 

It's very important to get that straightened out. Where  these edge to fog gateways that bridge the divide fit in is, you create this fully secure VPN network to your cloud. So now you've secured your network of all this data. You have integration of your IoT receivers into that network and then you also create onsite data storage and edge computing power through a central fog gateway.  

Now both the wireless network and the IoT device network can communicate to the other building systems and the same goes for the building systems that were traditionally not connected to these device networks. 

Then pushing that data right up to the cloud so you have your IoT systems and you have traditional BMS platforms all coming together in a central system. 

There are many cloud platforms that are out there, you know performing analytics against the data or providing other services against the data,  it becomes a problem because you still don't get a comprehensive view of operations. Many users have to log into multiple systems in order to evaluate and analyze their data. So really what's needed is a central system to aggregate the data at scale with a suite of API eyes to these external systems in the cloud. 

There needs to be the single pane of glass where the data exists in the cloud and is moderated and controlled in the cloud. Then you have integration so all the other systems that you might need to retrieve data from provide a standard compliant data integration platform with a single pane glass view into that system and then you integrate the value chain of all of these other providers in the cloud. 

Eventually what you'll get is a method of setting the stage for full integration and collaboration across all cloud platforms so that you can easily share data across systems,  distribute data to your engineering and energy consulting firm so that they can evaluate that data and help the building owner make decisions on capital projects, for example the tenants and residents can gain access to their thermostats easily. 

The owner operator could grant access to the thermostat without them having to put their own nest device in or some other type of Wi-Fi device hvac service companies could gain access to enact this. This access control system where data is shared so that they can evaluate problems with your air handler or your boiler plant or your chiller plant.  You get full transparency all the way down to the device level and now you're providing full transparency to all the collaborators who actually need access. 

If they had access they can provide better services to the building, so what is this roadmap to transparency look like?  wireless start a mesh remote control nodes that connect seamlessly to existing building systems. So really designing your wireless IoT device network so that it’s standardized and compliant with existing systems. You want to support standard compliant edge devices while maintaining this from robust backhaul. You want to eliminate the need going forward for power communication wiring. 

We recently did a project in a 2 million square foot building where you can put a device now anywhere in that building, a sensor, thermostat, any control point, you can just place the device in the building and it will come up on the network and be visible in the cloud. So that really allows complete flexibility. The types of sensors that you use and you could use at much lower costs than was traditionally available and then really getting this open protocol cloud platform that's able to not only receive the data from the building systems but also fully integrate with all other cloud based platforms for a fully robust platform in the cloud that has multiple data sources and can really give you a single glass pane into the view of operations.

Deb Noller: Facilities Management As We Know It Is Dead

<— BACK TO OFFICE TALKS

Deb Noller, co-founder & CEO of Switch Automation discusses how owners and developers can take advantage of the new business models and revenue created by digital facilities management.

---

VIEW PRESENTATION:

---

Deb Noller, Co-Founder & CEO, Switch Automation

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

This video was filmed at a Peerspace, the leading online marketplace for meeting and event spaces. Click here to Learn More.

Very shortly, facilities management as we know it today will be dead and a whole new digital model will spring up and take its place.

All across the property and the real estate industry, people are adopting new technologies and using data to create really interesting new digital business models. I'm Deb Noller, I’m CEO of Switch Automation, and we have a smart buildings platform, and we're seeing a rapid transformation towards digital F.M. (facilities management). We're really excited about this digital F.M. because what we think is better building management will lower the impact that buildings have on our planet.

Research and experts have all indicated that there's going to be more than 3.5 billion new data devices posting information out of commercial buildings over the next two to three years. All of this new high quality data is going to create new business models and new revenue streams.

Real estate, as an asset class, is our largest asset class on the planet. We spend more money there than anywhere else. And real estate and the adoption of technology is being very slow. It's not just last across all of the industries it's dead last, and all of this is beginning to change. But why now? What's causing the industry to change now?

So the incentives are actually lining up to create these new business models, new technologies, and the adoption of data is causing new businesses and existing businesses to really understand how they're going to innovate for the future.

If you look at Uber as a company they didn't build technology and bring that into the market and try and sell it to the taxi drivers. What they did was they created really interesting, easy to use tech that scaled and it created a whole new market. So their drivers. And the customers adopted that technology and they adopted it in droves and they built a whole new business model. In this very similar vein, this is what's going to happen in real estate.

So the technologies are more available. They are more cost effective. They’re more deployable and increasingly interoperable. And this is being recognized right across the industry by the property companies themselves and also the service companies that are servicing the industry. They are looking at those technologies and bringing those in and creating interesting new business models and also brand new revenue streams.

We're working with a number of companies that we see as world leaders in the adoption of technologies. So this is a Canadian real estate company largely recognized as being best in class. They are using data to drive a better occupant experience. They passionately want to be the landlord of choice, and what they're doing is they're using data to proactively manage occupant comfort, and to understand where they have hot and cold spaces, and to address those before their customers are even aware of it.

We're also working with a large coworking space that is growing very rapidly, and they are really interested in using data and technologies to understand how space is utilized. So what they're really interested in is the design and the use of space around employee productivity and employee collaboration, that ultimately leads to workplace innovation.

So here's our three tips for how to survive this digital transformation of our industry.

First of all, you need to get your strategies right. So starting with a data strategy, you need to think about how you're going to harness your data, where you're going to host your data, who's going to own your data, how are you going to share that data with all the various stakeholders across your organization, but also outside your organization. You're going to have to think about data privacy, data governance, and data protection.

The second thing is, you need to get some really basic infrastructure right. So this is about getting your cyber security policies right, getting your architecture right, getting your data policies right, not just trialing every bright shiny I.T. device that's in the market.

And thirdly, make sure you're looking at your existing data and your existing systems, because you already have quite a lot in your organization that you can take advantage of. And if you get these things integrated first, and start to take advantage of those, you'll get really quick early are ROI (return on investment). So you'll get those early wins, you'll get the buy in of your management and the organization, and you'll get those wins that support your program going forward.

So commercial buildings are generating more data than ever before. This is going to be a brand new lucrative opportunity for many people in the industry. But what we would say to you is don't wait. Start now.

Mayank Agrawal: Finding Your Zen In A Noisy World

<— BACK TO OFFICE TALKS

Finding a quiet, comfortable and private technology enabled workspace on the go is no easy feat. Zenspace CEO Mayank Agrawal discuss the challenges of finding your zen in a noisy world and introduces concepts to help solve this problem, as well as maximizing use of underutilized space.

---

VIEW PRESENTATION:

---

Mayank Agrawal, Founder & CEO, Zenspace

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

This video was filmed at a Peerspace, the leading online marketplace for meeting and event spaces. Click here to Learn More.

Hi everyone My name is Mayank Agrawal. I'm the founder and CEO of Zenspace. Today I want to talk about finding your zen in a noisy world. Zen to us stands for that quite, private comfortable moment that you need to conduct your business. It's the place where you can actually go and meet someone, take a video conference call or just focus on what you are doing but without the distraction of noise. Building on that, I'm gonna establish in this presentation through statistics, why is this a big need at this point in time. I will also talk about the lack of quietness or like lack of Zen spaces in public spaces like airports and conventions. I will also talk about what is Zenspace doing to address that need.

This was my life last ten years, working in a technology sales for last almost a decade. I used to go to conventions almost every quarter and now after 3 o'clock when I'm tired my legs give up this is what I used to do, find a little quiet little space where I can sit and do some work. I used to take my conference calls with my boss who wants to do a sales review when I'm traveling inside a car by turning on my hotspot and also at the airport. As you can see I mean whenever I travel I mean I have two hours waiting for the next United flight. Even at the open office layouts it's very interesting in the last decade. We talked about that the offices should be more open. There should be more collaboration and open office layout became the cool thing. But it's a paradox, suddenly the new research and new studies from Harvard and from many of the big magazines they are actually talking about the lack of privacy in open offices.

But what can the facility managers do now that they have invested billions and billions of dollars to set up those open open offices but there is a lack of privacy for taking a phone call taking a even topic to a remote workers which are outside the country switching onto some staggering numbers and some statistics which are my favorite while doing research for Zenspace. We came across this number - Global Business Travel in 2017 alone was $1.33 trillion. It's been growing at a rate of 5 percent on an average for the last seven years after we came out of the big dip. And it's growing faster than ever. By 2022 it will hit $1.7 trillion almost the size of a big country. On the other hand. Flexible work space is growing. We all know what is the valuation of we work today. We all know workspace as a service is actually evolving. How can you actually refactor your space so it's flexible is reusable? It's not an office space where you have a permanent office but it's reusable by another other companies simultaneously.

That's what flexible work space is all about. JLL did research as in 2017 five percent of the work space has already been converted into flexible thanks to companies like Regus and WeWork the trend will continue and it will become 30 percent in future. We are talking about trillions of dollars of commercial real estate here. The third number which I would like to establish is remote workers in North America 40 percent of employed Americans last year alone work either in part time or full time outside their offices, remote workers. 3.9 million employed Americans work full time outside their office. They did not have dedicated offices and these are freelancers consultants. These are photographers, videographers, architects, these are sales executive, C-level executives of large companies. We call them digital nomads. Digital nomads are those people who don't have a dedicated office but they work outside. And how do the work is what we are trying to address at Zenspace. Most of the time you have some privacy and quietness there. But when they go out in coffee shops and conventions and airports that's where the big problem is.

There is space. Space is not a problem, we talk about real estate being prime. We talk about you know, how can we actually create more space out of space? There is space out there, and we actually did this while setting up Zenspace. We did research of top 10 airports and convention centers across the world, and staggeringly, 40 percent of that space is underutilized. When I call them underutilized, they look like this.  They’re the the lobby, the patios, the hallways. Las Vegas commercial center as you know, the convention capital of the world, where you have consumer electronics show and shows like anybody, 4 million square feet 2.2 million square feet of which is actually exhibit halls and we're just the remaining of that is hallways lobbies and bodies. What do you do there actually? What can we do to convert those spaces? What can we do to convert those spaces without a huge transformational construction cost? What can we do to convert them into private workspaces?

We actually combined three experiences. We started with the on demand ubiquity aspects of Uber that my care is available within five minutes of me pushing that button. Wherever I am. Then the concept of WeWork which is workspace as a service. Workspace as a service meaning, how can you you reuse the existing space and share it with people? One of my favorites is Starbucks. The consistency of experience attribute which comes from Starbucks. When I'm outside of my home and office and I don't know where to go. I search for Starbucks. I search for Starbucks because I know that there is a Starbucks within 15 minutes of wherever I am. I also know that I will get free Wi-Fi, I also know the coffee I want to order and I have my space there so that to me is my Zenspace until we have enough Zenspaces and that's the consistency of experience, that consistency and guaranteed experience is very important. Uber does not offer that vehicle does that but it's not pervasive enough. Starbucks is pervasive. We combine those in our product called Zen Pod.

What is a Zen Pod? Zen Pod is quite comfortable and private technology enabled workspace which can be set up and as small as 10 square feet the size of a phone booth. And we have three different form factors for one person to person and four person and can be can be set up in less than two hours. Costs are really less than half of what you would spend on construction of a room and they are private, there are tech enabled that can be operated with a mobile app. You can actually download the Zenspace app and book that little room for yourself, pay for it and open the door yourself. It also offers a huge opportunity for generating revenue out of underutilized spaces. Through micro leasing and advertising it’s a big source of revenue. These are some visuals of how a looks like we play is what we have on offer boards upcoming in fairly large shopping mall in San Francisco where we are doing a pilot one of our parts has been placed in a coworking space as you can see here and we the biggest success we actually see and biggest need, we talked about conventions and this is where actually where we had this in one of the big events in Las Vegas. This is hard to find. The Zen moment is hard to find. And so we exist to solve the business traveler and remote workers problem. That's about Zenspace. Thank you so much.

Michiel Hofman: Bloomframe - Designing For Human Intuition

<— BACK TO MULTIFAMILY TALKS

Michiel Hoffman is an architect by trade and the CEO of Bloomframe. His philosophy of architecture is based on human values, pushing the boundaries of how space can serve people.  

---

VIEW PRESENTATION:

---

Michiel Hofman, Partner, HofmanDujardin / Bloomframe

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Good morning everybody. My name is Michiel Hofman and am one of the architect Founders of HofmanDujardin, an architecture firm based in Amsterdam. Today I will speak about the two things. One is our design philosophy which is based on the human intuition and the second, we designed a product which is related to this philosophy which might be very interesting for New York.

This is our office. We're based in Amsterdam. We have approximately 40 architects and this is our design philosophy. It is called shaping intuition. So what we say when we create architecture, urban design, interior design it's always related to the intuitive values of human beings. We call it shaping intuition and what it’s based on actually four elements which are very relevant. If we think about architecture it is spaciousness, groundedness, expression and connection and actually each human being requires these elements. So if you work on urban planning architecture or interior design we say these elements are required. So spaciousness is about lightness, brightness and can you breathe in this space. Groundedness if you feel protected and do you feel safe in the environment. Expression is something what what is very attractive and what is triggering us. And the fourth element is the connection which is the relation between people the relation between spaces and the relation between inside and the outside. And what do we actually say while here you can see the elements based on the natural values but the sentiments you have of these values, the spaciousness when you're on top of the dunes. This is in the Netherlands. Groundedness if you're in the forest, you even have this also in Central Park. Expression these are the flower fields in the Netherlands the tulip fields and the right bottom is that connection, the total flow of space. And what we actually say is that human being requires a balance of these elements.

I don't know if you had this already in school once that if you look into were red dots and you look away you see a green dot. This means that your body creates complementary experiences and we say the same happens in architecture with these four elements so if you create one, you also create the other ones around it so people can be in balance in the space. And we have a quite a nice test. So please have a look at this picture of the Paris Eiffel Tower it's black and white. So if you have a look at this image more or less 10 to 15 seconds I can show you what's going to happen with your intuition. So if I go back to the black and white picture you see the coloring of the image which is quite astonishing because you're looking at the black and white picture. You're creating the opposite colours of what you see here. You see the green grass you see the blue sky. So when we say the same happens in architecture and there are also examples in nature for example. So if you would walk in the forest or in Central Park and it's dark you have the trees around you and people would take a break. What will they do, they will go to the open space. It's about the complimentary experiences of architecture and the opposite happens if you walk in the open fields and then you take a break. People will look for the groundedness and they will sit under a tree. So with this philosophy we create architecture and we design different things so this is more the introduction of the office.

So we do a housing project in Amsterdam with a swimming pool crossing over. We built a residential tower in Beirut which was reported that the CTBUH Awards 2016. This is a funerary centre in Netherlands. This is a proposal for the ING Bank in the Netherlands in Amsterdam. And this is a distribution center in Rotterdam. The booking headquarter, we collaborate with you in studio and this design is in the center of Amsterdam. Seventy five thousand square metre. And we also do interior design. This is for a booking and this is for the American company Indeed. Also in the Netherlands.

So this is these are the designs we're doing with this same philosophy shaping intuition and what we show you now is the bloom frame design. It comes from the same design philosophy but it's a product which can be integrated in the facades. That's actually what brought us here to New York. And what we see is that there are many apartments in Amsterdam also in New York which are very much closed off. There are no relations from inside to outside. So we investigated what can we do? What can windows contributes to the wellbeing in apartments in small apartments. And here you can see pito people sitting inside the windows actually looking for outdoor space the light to breathe. There's an example from Amsterdam so people would like to go outside. So we started sketching what are the possibilities if we can transform the façade and that the facade window becomes a balcony. First we started with the Lego models to say okay how can we transform this façade, how can the lower panel can open up and become a balcony? We made scale models and actually led to this prototype.

So you have a lower window and you have an upper window and within 55 seconds it can open up automatically and become a balcony. So this gives huge opportunities to the real estate market because suddenly you can add three square meter of your facade to the surface of your apartment and we can create responsive architecture transforming facades. Here are the sizes, so the deepness is one meter ten which is three point six foot large and this is ten foot. And here are the examples. So we project that the first project in New York evidently. So you have to close the facade. You can open it up. And which can become this kind of architecture. From the inside, you have this view. The lower panel then becomes a balcony and you can step outside, breathe, have additional light to the apartment. And we made a movie. So the product has been developed completely and. It's now certified as a window certified machine and it's certified as a balcony in Europe.

The Bloomframe has produced by Kawneer France based in Montpellier, France. It's actually an iconic company, an American company, and what I now want to show you is actually the first project where we launched the product this is in Amsterdam. It's a housing project and we have some images of the wait has been installed. These were the visualizations.

So it's at the canal, has a very beautiful view. This is the way it opens up.

And so these were this was the launch of the first product they installed and it was quite amazing. It's very simple. It arrives in a box at the building site. You just lift it in the correct position. You pull it towards the facade and you fix it, and that takes actually say two hours and it's done. This is the owner of the apartment and actually the scaffolding is now out. The it has been completely produced. And this is the site with the French engineer also part of the team. This is the view on the canal.

So it is the first one they installed and they actually were quite ready now to come to New York and say we see a huge opportunity in the city to transform the facades, create responsive architecture, and to make micro apartments slightly bigger to create outdoor air space. Thank you very much.

Shannon Smith: Does A Building Have A Mission?

<— BACK TO OFFICE TALKS

Buildings need to have a mission. Shannon Smith, CEO of PointGuard says the mission of a building is not to save energy but rather to serve occupancy comfort. Smith shares how to weaponize your building management system by harnessing the wealth of data it holds and turn it into meaningful insights.

---

VIEW PRESENTATION:

---

Shannon Smith, CEO, PointGuard

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

Hello everybody, I'm Shannon Smith, I'm glad to be here. I'm the CEO of Abundant Power now known as PointGuard. At PointGuard we're committed to innovative and impactful technologies for building teams to help them realize higher building performance. But I'm not here to talk about me and hopefully here to talk about something that's important to you and not often discussed. And that's a question of whether or not buildings have a mission? How many of you have mission statements? I know we do at PointGuard. Missions are important. It helps you determine where you're going, what you're all about, and what's your purpose? I believe buildings do have a mission and if building is complete their mission, they will have an amazing impact on your businesses and on the people who come to work and to live in them every day.

So this conversation we're going to have today is going to be about what is a buildings mission? What are some of the things that are keeping buildings from completing their mission, and how certain older technologies maybe are failing on the job and what new technologies, new software like PointGuard can do to help buildings complete their mission. So let's get going.

Now one of the things has always found curious in the conversation about analytics and building and building software is that so much focus is on energy analytics. But we don't build buildings to save energy do we? We actually build buildings to provide an amazing workplace experience and to last as long as they can at the lowest possible operating and capital costs. Energy costs just come along for the ride. So if your building completes it’s mission and does those things, great workplace experience at lowest capital and operating costs. What happens? Profit for the owners and great enjoyment for the occupants and the tenants. So I want to talk a little bit now about what can be done or what stands in the way of buildings completing their mission. They're really six things that come to mind to me and I want to talk about it and maybe some you know. But here listing them out can tell you a little bit about why it's so hard for building to complete their mission. And then what and why software sometimes doesn't really do the job.

What is time? It’s a tyranny of the urgent today. We have so little time we had one building manager say I have one click in one minute. The next is talent. There's a major talent gap today saying a recent study by RIBEX says that there are more people over the age of 70 in facility management than under the age of 30. The third thing and this is really builds off of time and talent, is stability. We have less time and less people. You're moving teams around more and the knowledge is embedded in the building and how it performs is being lost. There's a lot of lack of stability today. Comfort is an important aspect of a building's mission. We found at PointGuard buildings are not within three degrees a set point, one out of every five days during occupied hours. It's the one thing you can’t control in your operating of a building and it's the one thing you don't. Knowledge everyone knows in the facilities space that knowledge is reactionary, it’s static is based on the things that the vendors are telling you to do and is still visual today so little data is being used deeply in buildings to help them complete their mission.

And the last the most important thing that keeps buildings from completing their mission is action. Nothing good happens in a building unless you know exactly where to go to turn a wrench and so much of energy analytic software and software is being used a day in facility management doesn't have any idea where to tell people to go to improve their buildings. So here's your analytics, is a long way away from helping millions complete their mission. Recent Energy Star score recalibration might even tell you that even more, the average office building lost 12 points of Energy Star score in August. Energy analytics is just a small part of the data opportunity deeper building analytics is the real picture that you have today. So what can be done? How do you begin to take technology and help a building complete its mission?

We believe at PointGuard to the answers right in front of you. What you already have invested in the building, you're building management system. There's a wealth of data there that is underutilized. It may be the most important asset you have in this journey. How does that work? You start with your energy bill data, that's a very small part of it. Then you take all your BMS data. The next most important thing is having some form of software solution that can help you process said data. But it has to do the most important thing of all and lead to meaningful action. If it does that the building can complete their mission. If you take a look at all the pieces of equipment that are available and you're BMS you can begin to look at it in terms of comfort and asset health and with the right kind of software tools you can take all those pieces of equipment and move them into the highest asset life in the highest possible comfort delivery.

So at PointGuard we think that the next platform has to meet a number of goals and that’s how we designed our facility management platform. It has to maximize time, has to be intuitive, straightforward, easy to use, it has to solve the talent gap. It has got to allow one person do a lot more work than before and also attract younger talent into the facility's space. And if you're outsourcing your facility services, they're facing the same challenge. Using a PointGuard software, one person can manage over 20 million square feet. That's over 20 times the current rubic used by facility management today. It needs to remain with your building. It has to amplify local knowledge all the people that have come through all the people that know that building, that information has to be captured and algorithms and machine learning, and it has to stay with that building for the next owner and the next management team. We have to eliminate comfort mistakes. You have to be able to deliver 100 percent comfort 100 percent of occupied hours. If you do that you eliminate over half of your comfort complaints. It's an amazing outcome and it's something that building management is not doing today at all.

Instead of focusing on energy we've got to move to something bigger and more important, something in the mainstream of what real estate is all about. It's about your assets. It's about operating expenses. You want to extend your asset life. You want to replace assets when you want to replace them, not when the vendors tell you to replace them. Operating data is single most important piece of information missing from building management. They were the only asset class it doesn't replace equipment based on operating information, replacing static nameplate maintenance information that's not accurate and billions of dollars are being wasted today. Lastly it's got to be precise. It’s got to stop wasting time, tell people where to go to turn a wrench to improve your buildings and help them fulfill their mission. And those are the six points that we designed our platform around to deliver that kind of value to the people that use it. So it's time to go beyond energy Analytics. In my opinion it's time to for buildings to help complete their mission to provide maximum occupant comfort. To have the lowest possible capital and operating costs and as a result, help you have maximum amount of profit and have the occupants have the most enjoyable workplace experience possible. We can do that and PointGuard.

David Sullivan: Solving Rental Evictions

<— BACK TO MULTIFAMILY TALKS

David Sullivan, CEO of Till illustrates why tenant evictions occur and the myth of landlord “late-fee revenue.”

---

VIEW PRESENTATION:

---

David Sullivan, CEO, Till

WEBSITE | TWITTER | LINKEDIN

---

VIDEO TRANSCRIPT:

My name's David Sullivan, I'm the CEO and Founder of Till. I'm here to talk today about why evictions suck. The underlying problem that creates eviction risk on our portfolios and how we can use innovative financial products to improve both the residents lives and ability to pay rent but also your portfolio's performance.

So each year 900,000 evictions occur. Many more occur in the shadows and we as landlords use different tax to get residents out of our portfolios who aren't paying rent. So why do evictions occur? Well the Rent Is too damn high, we've all heard that story and that's true. Affordability challenges are affecting all of us as landlords in finding residents who have the right ability to pay rent. We have serial skippers and professional residents who squat. We've all faced in battle those. But more importantly I believe that the cash flow challenges within our resident base. Drive almost all of the evictions and default we see in our portfolios and place eviction risk on an even broader set of residents.

So let's go down another level. Why do our residents face eviction challenges and cash flow risk? Well we have median household income of about forty five thousand dollars and that is really representative of stats that we all know. We've had stagnant wage growth with rising costs rent being the primary cost that we replace on the resident base. In a similar demographic, half of Americans see 25 percent month to month income volatility. Our resident bases are working multiple jobs, they're paid hourly, they're part of the gig economy. This makes their ability to budget and to pay rent challenging.

Most people in the country also have limited savings. Half of the country has less than four hundred dollars in accessible savings to actually weather a financial event Then finally we as landlords are placing a constraint on the resident base ourselves. We're putting a cash timing constraint by charging rent on the first of the month which makes it hard for the resident who is having to pay 30 to 50 percent of their income to us as landlords on that day.

So okay if a resident can't pay rent, what do they do? What current options exist? We have the family bank, family and friends, asking mom and dad or cousins or relatives for help. That works but people are embarrassed to do it and the capital base is inherently limited. We have banks real banks. The reality is many of our residents, especially in the workforce housing space, are under banked. They have limited access to the right capital and credit solutions that can stabilize their financial ability and means to pay rent on time.

We have new online peer to peer banks popping up, these are offering more personalized lending solutions that can help solve this problem but many have principal requirements that are above what the resident actually needs. We have payday and title lenders. These are real. Many of our residents are using payday and title loans to finance rent payday and title loans are giving their residents two to four weeks to pay them back and charging them three to 700 percent APR’s. As a side note, there are three times as many payday lenders sitting in our rental communities as there are McDonald's in the country. So they are a very real capital source for our resident base. And what's what the worst part is about are residents using them as a credit solution is that they are increasing the long term default risk on the resident base. The average payday loan will be refinanced eight times. And once that borrower is hitting that eighth borrowing cycle they are likely in default to both the payday lender and to use the landlord.

Finally, I want to highlight the landlord us. We are landlords. We as landlords offer credit to our consumer base our residents but it is not a effective credit. We do this in two ways. We have payment plans. We have a good resident they'd been with us for a few years and they hit a cash timing problem. We give them a payment plan because we don't want to lose them and we understand the cost of the eviction.

But more prevalent is the second form of financing we're offering them. We're giving residents a form of financing called a late fee. The late fee in most jurisdictions is 5 to 10 percent of rent for that month and we usually give them two weeks to pay. So what happens if they don't pay? We then file eviction and charge them eviction fees and them if they don't pay that we put them on the street. So let's just look at the initially late fee. The initial late fee is let's say 10 percent and we give them two weeks. That is a over 200 percent APR and we are not giving the resident any adequate time to solve the problem that they're facing.

Fair housing makes custom rental payment solutions challenging. And we as landlords are under resourced to deliver this type of credit. We are not re underwriting them. We can't read underwrite them. We don't actually know what the residents credit risk is at this point of need.

So I want to dispel a myth that I hear all the time from our landlord partners and people that we work with. So I talked all the time to landlords and they say well, we like our late fee revenue. I want to challenge that. Late fee revenue is a lost center. At best, it is a breakeven value proposition. I want to quickly talk you through why I believe that and why we as landlords are really bad at delivering credit.

We as landlords look at our income statements and there is an explicit line that says late fee revenue that makes us feel good. I ran a portfolio that had 1 million dollars in annual leave fee revenue that made me feel good. Well some residents might not pay but we made a million dollars. That is not true. We pulled it apart and the challenge in understanding late fee revenue is understanding the costs that drive and are associated with the doing quinsy and the collection effort. I challenge you to go look at your portfolios and actually pull apart these costs to see whether you're making money. And I would hands down bet that you are not. The challenge is we have five different items sitting in three different sections of our income statement. They create a loss center. We have bad debt that's easily tracked it sits in revenue. We have excess vacancy due to longer turnover for an eviction than a regular turnover. That also sits in revenue but it's harder to understand. We have our collection teams costs we have an eviction filing cost hidden in property management expenses. We then have materials and labor to turn a turn over. We all know our evictions cost us more. We have materials and labor to turn on eviction. Turnover beyond a normal turnover that are hidden somewhere. Ideally we shove them into Cap X but are also hidden in turnover and maintenance costs. The portfolio I was running I did this exercise a million dollars in annual revenue off late fees. We were spending one point four million dollars on those items we were losing 400,000 dollars a year charging our residents over 200 percent APR is giving them two weeks to pay us back and still evicting many of them.

The worst part is the resident is the biggest loser in this equation.

So even if they aren't evicted they face the stress of eviction month to month. But the ones that are evicted we are damaging their confidence, we are destroying their credit scores and we're destroying their ability to find housing in the future. Many families who are evicted are forced into transitional housing with family or friends homeless shelters or hotels, children are ripped out of schools and there's just an overall loss of community. Parents who are the breadwinners of these families who face the cash instability or the cash uncertainty, are then distanced from their job opportunities making it harder for them to actually earn income to rent a home from us again.

I want to talk about two solutions. We have a suite of financial products that we're delivering into and specifically designed for the multifamily and single family rental housing industries. We have a core rental loan that is meant to weather a financial emergency. It is a three to six month loan. We underwrite the resident on their ability to pay. We want to make sure that they have the ability to pay us back and the ability to pay you as a landlord in the future. We partner with landlords to deliver this product is a B2B to see model. This is another tool that the onsite property managers have to offer their residents who are struggling to pay rent. We underwrite them. We take the entire default risk away from the landlord and we pay you the landlord directly on time and in full. Every resident's balance that borrows from us goes to zero when we pay you. We also have a short term rental loan that is meant to solve intra month cash timing issues. So as I said earlier 30 to 50 percent. of our residents income is spent on rent.

We have designed as landlords a very inflexible system allowing our residents to pay rent when they have a challenge and we use sticks with late fees to hurt them to get them to pay on time. The short term loan allows us to pay you as landlords every single month on time and it gives the resident ultimate flexibility over that month's time period to pay us back. They can pay us back on their pay cycles, they can pay us back weekly, they can pay us back daily whatever improves their ability to pay you rent to lower their ultimate default risk and costs you as a landlord.

So I am very passionate about addressing the affordability challenge with innovative financial solutions. I believe that alternative credit specifically designed for the rental industry can do good and do well, that we can improve the financial stability of your resident base while improving your portfolio's performance. Thank you.

Jamie Hodari: A Better Way to Workplace as a Service (WaaS)

<— BACK TO OFFICE TALKS

Jamie Hodari, CEO of workplace provider Industrious, describes the latest office strategy: Workplace as a Service (Waas).

---

VIEW PRESENTATION:

---

Jamie Hodari, CEO & Co-Founder, Industrious

Website | Twitter | Linkedin

---

VIDEO TRANSCRIPT:

My name is Jamie Hodari, I run a company called Industrious. We're the largest premium workplace provider in the country so we're in about 35 cities and launching three or four units a month. Within that context I wanted to talk a little bit about what our industry actually is and then to talk about risk in our business. So when we started our business, in those initial sort of pitch meetings, all anybody wanted to talk about is coworking the real deal and how long is it going to be around for or is it just a trend? And I think at this point that's really receded but people do want to know. Okay I believe it's here to stay.

I know that adoption is growing really quickly but how risky is it? And so I wanted to focus a little bit on that and then in particular what landlords can do to take advantage of the rapid rise in adoption of this product category and in a way that mitigates risk. So what is our business? Here's the truth about workplace as a service, it is in large sense an outsourcing business. So when we started the business the premise at the time was that the white space in the coworking industry was for a more professional, more elegant product and that was true and I think that remains true to this day.

About a year in we had a customer, a large Silicon Valley firm that was growing out of one of our spaces and they approached us and said, hey we actually really need your help. Would you be willing to build out our headquarters in Chicago for us, we think that you'll deliver a better product than if we did it ourselves.

And in that moment I think my Co-Founder and I had sort of a light bulb moment where he said this is an outsourcing industry. This is basically where a large sophisticated company is taking a major cost line non-core complex out of their business and handing it off to a third party. And the observation is that in a lot of outsourcing industries, they kind of exist as niches for decades. So if you think about manufacturing outsourcing that was around in the 70s and the 80s as 1% of the market, your factories are overloaded so you use an outsourced manufacturer in data storage. You've run out of server space, so you outsource some portion of your data storage. Until someday when you see this rapid rise in adoption, and in a lot of outsourcing industries it goes from 1% to 5% to 50% in data storage. 95% adoption, and the question is what causes that rise in adoption?

For us it's clear that in most outsourcing industries it's the moment when someone can walk in your door and say I can do this better than if you did it yourself. So I can manufacture the iPhone more efficiently, more effectively, with less errors than if Apple did it. I can store your data more effectively with less downtime, fewer service interruptions than when you hosted on your own servers and we've basically spent five years trying to cross that exact threshold to be able to walk into Johnson & Johnson's Head of Workplace's office or Pinterest or Twitter or Spotify or Bank of America and say we are going to deliver a better workplace experience to your employees. You're going to have happier, more engaged, more productive employees if you let us deliver your workplace experience for you rather than if you do it yourself.

I think about a year and a half ago Industrious and a few other providers were actually able to start crossing that threshold. And that's why when you look at our business and you say what's going on here? Why is this cropping up everywhere? Why are large enterprise customers starting to really crank up their adoption? It's because like a lot of outsourcing industries it's also addictive once you started doing it and you see that you get a better outcome. It's really hard to go back to doing it yourself. So that would be kind of my framework for where we are today.

I don't want to oversell it. I think for small businesses and teams of 20 and below that ship has sailed. You're going to be in some sort of outsource setting. For larger teams from big businesses, I think we're in the experimental phase. If you look at most big Fortune 500 hundreds they're doing one or two major experiments with putting a team of 200, 300, 400 people in an outsourced setting and they're testing, how happy are my employees? How many people quit in an 18 month period. They're taking stock and a lot of those companies are coming to the end of that experimental period and I think, look I'm biased here but I think most of them are coming to the conclusion that they actually did get a better outcome and they're now starting the wave of really pushing adoption, at least outside of their headquarters, moving a lot of their workforce portfolio to a third party setting. So the question I think at hand is what does that mean for landlords?

This is, I think, very clearly becoming the most important amenity in a building. Meaning, Ernst and Young comes with a 300,000 square foot lease in a building and they're trying to decide if they're going to be in you know Columbus Circle or the building three blocks south of here. And it matters if the gym is nice, and it matters if there's a roof deck, but really if you can say look, I have four floors of the building that are dedicated to highly serviced flexible space that you can grow your team into, that really is an amenity that moves the needle on how corporate occupiers are deciding where to go. We're in the building already having whisky tasting classes and lectures and a highly serviced sort of amenity base and we're able to deliver that to the entire tenant base of the building not just to the flexible workplace customers and you find that increasingly are saying I really want this in my building but this feels risky.

What I will say is the knock on our business, which is that it is a mismatch of long-term liabilities and short-term asset, and I think if you talk to any coworking skeptic that's the first thing they will point to is a very valid criticism of our business. I think people bend over backwards in our business to try to say it's not true and here's why it's not true and you don't have to worry about that. The reality is, it is true. I think as our business becomes an increasingly large part of the commercial real estate industry more broadly, that's a problem because you're amassing a lot of risk and we think there's a better way to do this. So this would be an exhaustive sort of you know revenue of a coworking operator over various ups and downs, various cycles and it probably looks a lot like other revenue management businesses which is to say you know if you look at lodging over the last eight recessions there tends to be a 15% swing in revenue. If you look at Regus, which is comparable to the different businesses in the last recession in North America where they have twelve hundred units they saw about an 11% reduction in revenue at the unit level. That's not that risky of a business within the framework of most industries. I think that's a relatively reasonable risk profile.

The problem is when you put a lease underneath that, it's basically like putting leverage on our business. It's like if you put debt on your house and you get all of the upside from appreciation and you're underwater immediately if you go below the loan amount. What it does is creates these wild swings in profitability for coworking providers where in good years they're printing money and in bad years they're in the red. And the problem for landlords is if you look at a WeWork, Industrious or any other coworking provider and this is brutally honest, they will put money into a unit for 3-7 months perhaps if it's losing money in a recession but they're not going to forever. It means the landlord is bearing a lot of the downside risk and participating in none of the upside risk.

We believe very strongly that it's time for our industry to start shifting over to the model of the hotel industry where coworking providers and workplace service providers partner with landlords. They program the whole building, they have coworking floors of essentially custom suites for teams of 20 to 400, and you do that in a profit sharing arrangement rather than on top of a fixed lease. This is something that doesn't sound that cutting edge but it's at the very forefront of the industry right now.

This Reuters article from I think four days ago is the first time I've seen a major publication talk about the fact that providers like us are starting to move to management contracts. It's happening very quickly. So for Industrious for example, a year ago 95% of our pipeline was arm's length leases and 5% were partnerships with landlords. It's now about 75% partnerships with landlords and I really think this is not just about Industrious. This is something that's going to turn our industry into a more sustainable, safer business. That large occupiers can really use with peace of mind that it's not going anywhere and that landlords can take advantage of without taking on undue risk.

This for example is a project we just announced with Blackstone in Los Angeles to manage an entire campus of buildings for them under a profit sharing arrangement where we're managing coworking or managing custom suites and also all of the building common amenities. So let's say your the landlord and you decide, this makes sense, I do think I want to partner up with a provider under a sort of management or partnership arrangement. And then you've got to really dig in on who you're going to partner with because more so than an arm's length lease scenario, you're really shoulder to shoulder with that operator.

I'll go very quickly through some of the ways in which a landlord should approach this question.

So first what is the quality of the provider to go back to the earlier point. The name of the game in this business is to walk in the door of Pandora's Head of Workplace and say, we can deliver as good or better of a workplace experience than when you do it yourself. That's a high bar to cross and it's very important when you're working with your workplace-as-a-service provider, to be working with a quality provider that can actually make that pitch. Here's some images of industrial cities across the country. Increasingly it's a relationship business where the coworking provider, whether it's WeWork or Industrious, is working directly with the occupier. So it's important to be working with one that already has a series of existing relationships with those occupiers to start to deploy more and more of their workplace portfolio across the country.

The next is what is the profile of the actual people to walk into work everyday? Some buildings want a very young engineering-heavy sort of workplace, some want more mature, broad national businesses and there's no wrong answer to it but it's worth thinking for your building about matching the type of workplace provider you're bringing in, with the general brand tone of the building.

The next is, and I do think this is quite important, you need a national provider. So this is true for a Johnson & Johnson, they're looking for one or two providers to do 7, 8 markets with and it becomes increasingly hard for single point local providers to compete. So that's part of why you're seeing a lot of consolidation in the business.