For 2018, you will probably see more companies returning to having informative seminars in major cities to educate decision-makers in potential corporate and institutional markets on the benefits of adding products and services to their buildings, industrial parks and corporate facilities. Some technology-based power and network solutions are complex for the real estate industry, so we need to borrow and apply the proven marketing strategy from Sy Syms: “An educated consumer is our best customer.”
What does your salesforce know about this market? You need to train them as well.
The first thing to recognize is this is not the market of the 1980s. Back then, to land corporate tenants, real estate owners and property managers could get through most real estate deals by lowering the price per square foot on commercial office space. The idea of implementing intelligent buildings and amenities to attract new tenants was only a glimmer in the eye of some of us on the cutting-edge dealing with a very small, sophisticated market. Many real estate executives did not want to invest the time into understanding these new offerings.
Most real estate marketing strategies were tied to a simple “we sell space” mentality. To land the tenant, the only leverage was to cut prices and sell square footage cheaply. There is no strategy in cutting costs. If cutting cost is your only strategy, you are selling a commodity.
Today, even though many execs in real estate are traditionalists and hanging on to obsolete rules of thumb, there has been a paradigm shift. Real estate, infrastructure, technologies and regional economic development have converged into a new, complex market. They may not have seen this if they graduated from a traditional real estate program at a university. Most of the programs I've reviewed are obsolete. In effect, you cannot solve 21st-century real estate challenges by applying 20th-century solutions.
From a real estate perspective, if your building does not offer new intelligent amenities today to attract and maintain corporate tenants, it will quickly slide off the market when it comes to being a Class A property. Its desireability will diminish, and your ability to lease will become more costly both in finding a tenant and then having to give them a huge discount for plain space. This is the clear message needed to be drilled into the traditionalist executives of the real estate market if they are to consider, buy and implement the products you are selling.
In effect, you cannot solve 21st-century real estate challenges by applying 20th-century solutions.
Somewhere along the line, marketing money for training and education as part of the overall sales process got reduced or entirely eliminated at many companies in our industry. It has to come back, especially now in this era of “let’s get something done and make some profits." If you want the market to understand the value of new technologies and value-added services, you need to educate them and offer them ways to compare your solutions to others.
A couple of executives from different power and connectivity companies whom I spoke to see the need to get the word out from network services to cabling and wireless products to sophisticated system solutions and packages that provide intelligent amenities to corporate tenants as well as residential customers.
Is the lack of routing diversity a common flaw?
What happened at Atlanta’s Hartfield-Jackson International Airport last year is not a single location problem. Is that same type of routing diversity problem inherent at other airports across the nation? More important, is routing diversity for power and communications an issue for most commercial buildings and business campuses?
With one out of three corporate applications being mission-critical, this is a huge question to ask any commercial real estate property owner and manager
Now is the time every building owner should review their power and communications facilities for routing problems like this so they can be uncovered before a disaster occurs. There should be no single points of failure in a building that has any tenant organization within it that utilizes mission-critical applications. No single points of failure means you cannot have anything coming in on the same physical route or conduit, whether it is communications or power.
With regard to routing diversity entering a building or campus, all facilities containing any mission-critical applications should be reviewed to see if any safeguards and redundancies can be added into the configuration.
Will that cost money to fix? Of course it will, but consider the alternative if it is not uncovered and fixed. The building or campus becomes technologically obsolete to any organizations requiring a solid platform to support mission-critical applications.
Now is the time every building owner should review their power and communications facilities for routing problems like this so they can be uncovered before a disaster occurs. There should be no single points of failure in a building that has any tenant organization within it that utilizes mission-critical applications.
To me, it would be a good “smart” amenity to add to their “features list” saying that they can support mission critical applications because their infrastructure is fully redundant as well as resilient. If 90% of their competition are like them and currently do not have built-in redundancy into their facilities, it is a good investment for them to make. If they add power and network redundancy to their building or campus, they have just cut out 90% of their competition when dealing with prospective corporate tenants. That is huge.
Are intelligent amenities expenses or investments?
When it comes to adding capabilities, you should not be selling solutions as some type of cost of doing business. It makes it sound like putting in this new capability is an expense: “There is no value to it. It’s just something I need to put in to maintain the building.”
All of these intelligent amenities—redundant power, redundant connectivity, diversity in routing to the building, new security sensors and cameras and other capabilities—are investments. Looking at them as investments and not expenses implies a perceived payback. If it cuts out 90 percent of their competition, they can hold their prices and not slip into selling a commodity (space).
The payback is that the building remains viable and competitive in the market.
What about the owners of the buildings and business campuses that are less than perfect? Will you be able to sell them on spending money? That is always the key question on any market seminar endeavor. Just remember Sy Syms’ strategy, “An educated consumer is our best customer.”