Investors and owners of commercial real estate portfolios are seeking new ways to add value to their assets, particularly as economic uncertainty dominates global headlines and daily decision making. Vertical integrators—real estate operators that have historically kept all operations from property acquisition to daily management under one ownership umbrella—are now looking to outsource the property management portion of their business to focus more time and attention on investments.
This “spinning out” of property management reflects a number of emerging trends in the industry. Real estate is a complicated topic for owners and occupiers these days, with questions arising about how much space is needed and for what purpose. Highly amenitized spaces across sectors have emerged as a way to draw people in, shifting property managers’ roles from responsibility for space to now being in charge of experience.
There is also growing emphasis on staying ahead of the curve and investing in solutions that can adapt to rapidly changing market dynamics, necessitating new partnerships that cover non-traditional but increasingly essential services. Globally, real estate owners and occupiers are finding new ways to work together to create greater health and wellbeing for tenants; source and generate renewable energy; and develop and implement more technology solutions that will help pave the way for the future.
It’s a lot to ask of a single vertical operator to deliver expertise in all of these critical functions, especially as the industry continues to evolve at a rapid pace. For those companies that are already using third-party property managers, consolidation of services is on the rise as the challenges of creating a consistent tenant and visitor experience increase, particularly across multiple properties.
When property managers are tasked with creating destination-worthy spaces, a single-source solution can help streamline decision making, creating economies of scale and identifying new opportunities to deliver on an owner’s brand promise. Here are just a few of the ways property management companies are bringing this promise to life at the portfolio level.
Health and wellbeing amenities find new champions
In the age of hybrid work and mixed-use properties, people gravitate to environments that support their physical, emotional and spiritual health. Office owners in particular have focused on adding amenity-rich spaces to their footprint, delivering low-traffic relaxation rooms, outdoor rooftops and gardens and fitness centers, along with access to a wide variety of healthy foods. These amenities are now on the rise in properties from multifamily developments to airports.
But to bring these spaces to life portfolio-wide, additional services are needed. From activating free gym classes to ensuring tenant apps are up-to-date, property managers are tapped with creating the “wow” factor that differentiates an average amenity from a service-rich solution. An outsourced property management solution can pull from best-in-class examples, at diverse property types, to deliver what’s next in the market to a building portfolio.
Driving sustainable building management
Building owners and investors are under considerable pressure to meet sustainable building management goals. Property managers can help lead the charge in developing net-zero action plans, using their perspective and a wide variety of tools to help navigate local regulations and a sea of evolving metrics.
Property management firms with a global mindset and advanced tech are able to deliver real-time data and other insights to create and implement sustainability and decarbonization strategies, both at the building and portfolio level. With so many owners struggling to find the right starting line on their path to decarbonization, having a partner with both the know-how and tools to meet this critical goal is essential.
Technology supports seamless building operations and innovation
Perhaps no area of real estate is evolving faster than technology, with new apps emerging to customize and improve on-site experience, erasing the physical/digital divide, while also delivering in-depth intelligence about property operations.
Leading property management firms use technology to create a seamless experience for all tenants and visitors, and the next generation of tenant apps is already emerging to generate an integrated approach to portfolio management. When building operations and tenant experience are standardized across an entire portfolio, property managers and owners are able to work from a shared database to make intelligent decisions and build on winning experiences to further engage tenants. Leading providers can even build benchmarks from existing data sets, furthering new research, ideas and pilot projects throughout the portfolio.
Today’s building owners need more than cost and risk mitigation from their property management partners. Armed with emerging technology and new ideas about how to activate space, a single outsourced property management solution can create spaces that draw in tenants and visitors, streamline decision making and create new opportunities to deliver value for a portfolio and all its stakeholders.