Local firms deliver virtual property management
Puget Sound Business Journal (Seattle) - by Vanessa McGrady Contributing Writer
Bats are bothering customers at a Phoenix baseball park. An architect wants to see computer-aided design (CAD) drawings of a Seattle department store to estimate how much a renovation will cost. A maintenance worker wants to order light bulbs for a whole floor and check how much he's spent on cleaning supplies this quarter. A business manager needs to know when the insurance policies expire for all the branch offices.
The new wave in commercial property management is to handle all such details - service requests, leasing information, important documents about a building, its mechanisms and its tenants - online, all under one umbrella. And the newest rider on that wave is a company called Essention Inc., a privately held Seattle company that has developed a system for catering to a property manager's every whim.
"We take a lot of tasks out of their hands so they can concentrate on their jobs," said Jim Shulkin, Essention's marketing director.
Essention's establishment as a privately held company came in May 2000 as an offshoot of McKinstry Co., a mechanical design and construction firm. In 1997, McKinstry began developing Web-based solutions to better deal with its clients' service needs. Since then, it has set up sites for more than 300 buildings representing more than 30 million square feet of space in major metropolitan areas across the country, and launched its national rollout this month. After an initial $4 million investment, it projects conservative revenues of at least $3.5 million for its first year. Dean Allen, who serves as CEO for McKinstry and Essention, said he anticipates the revenues to at least double next year as people realize the cost-effectiveness of streamlining certain functions.
Essention's service, called InfoCentre, works this way: Each client, whether it is a company that handles several properties across the country or a single office manager for a Bothell building, can call up an account on a Web site. From there, the person can log in a service call and keep track of its progress; in turn, a vendor or the person called to do the work can check details on the site. The work requested goes to a 24-hour service desk that dispatches the calls to whomever the client designates. Other tools include a tickler service that reminds the proper party of such things as scheduled elevator maintenance; a drawing library that keeps CAD plans and operating and maintenance instructions and diagrams; and customized cyberspaces that can be used for tracking contracts or neighborhood news, for example.
Essention's services range from 5 cents to 10 cents per square foot. The price depends on how big the properties are and how many options are used:
• A 150,000-square-foot building with five to 10 tenants that requests work order management, preventative maintenance, a project archive, online operation and maintenance manuals, drawings and reports, for example, would spend $3,000 on a set-up fee and $10,000 to $12,000 for the annual fee.
• A 500,000-square-foot property with five to 10 tenants, all the above services plus "desktop concierge" would require a $9,000 setup fee and cost $45,000 to $55,000 annually.
• A 1 million-square-foot place with 10 tenants and all the above amenities minus the concierge services would take $10,000 to set up and $50,000 to $60,000 to run per year.
Clete Casper, the managing director for the CarrAmerica's Pacific Northwest region, worked closely with McKinstry to develop Essention's system. He swears by its efficiency, and is now one of Essention's biggest clients. In Carr's Northwest region alone, consisting of 1.7 million square feet for 38 properties, Casper estimates the company has saved hundreds of thousands of dollars in labor costs and customer retention.
He credits the system for managing the chain of a traditional service calls. Before using Essention's systems those calls would often turn into a game of telephone tag and leave tenants frustrated as messages were lost or service was delayed in the relay.
"The reasons most people leave a building are because they are not happy with the HVAC (heating, ventilation and air-conditioning)," Casper said, noting online property management systems can funnel all the information through one point of contact. "This way, there's just one throat to choke."
He cited the Feb. 28 earthquake as a perfect example of why an online service is an irreplaceable tool: Because tenants could e-mail and log in their damage complaints, workers were free to make the rounds of the buildings and check on things in person.
"With this application, we try to never forget the human touch aspect," Casper said. "We are a bricks-and-mortar industry, and this is a good example of Mr. Gates' vision of how the digital age is coming to fruition."
And there are others out there who share that vision, but according to Allen: "People playing wait-and-see are probably our biggest competitors."
Rod Kauffman, the executive vice president for the Buildings Owners and Managers Association of King County, said that several Web-based firms are picking up elements of building management, such as online browsing for properties or service calls. Essention, he said, "was first out of the gate with a revenue source."
BuildingsNet Inc., a Seattle-based software company, has been in the business of designing custom real estate information-management systems for the past year and a half. It is currently setting up systems for customers up and down the West Coast, and is three months away from its official rollout. While much of the end result is comparable with Essention - document management, interaction with tenants and service providers, and a 7 cent to 9 cent per square foot price tag - Jim Sackett, the company's CEO, said the most important difference is that BuildingsNet provides software to directly power a client's in-house service call center, rather than bring in a third party. He also boasts of the "robust information system," designed with the same engine used by Intel, Deutchebank and Honeywell's systems.
Even those companies that do business in a more traditional manner are getting into the act.
Joe McWilliams, the director of asset services for Cushman and Wakefield, said that his company has developed Web-based tools and resources in-house.
"They lend themselves very handily to call centers, particularly for users in far-flung places."
But those systems still can't replace essential services, he said, particularly when it comes to air quality issues. That requires dialogue with many people who are directly affected by the problem, and simply dispatching instructions on a computer won't do, he said. But whether technology comes into play or not, McWilliams contends that the core of the property management business is still serving the customer face to face.
"The best management job is the one you never see, the one you never hear about, the one that's transparent to building occupants." he said.
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