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editor’snote IN THE DAYS WHEN typewriters and smouldering ashtrays commonly sat on workers' desks, Human Resources was known as Manpower. While that may seem a distant era from a technological and cultural perspective, many of the real estate industry insiders providing insight on Staffing & Service Delivery in this issue can attest that it wasn't necessarily so long ago chronologically. Senior executives now nurturing a Gen Y workforce typically recall some very different experiences at the genesis of their own careers: computer-based tools were more basic; many tasks were more time-intensive; and prevailing attitudes about gender, diversity, accessibility and sustainability were less evolved. Yet, some critical determinants of professional growth haven't changed at all. Aptitude, work ethic, mentorship and collegiality are constants, and key qualities that help every generation negotiate changing demands and definitions of success. Our Focus features explore the findings from two recent surveys that asked real estate professionals to reflect on what they do and how they do it. Given its multidisciplinary nature, the real estate workforce encompasses a diverse range of job functions with some very specialized skill sets, but the industry also relies heavily on capable generalists who can bring a well-rounded understanding of property management, operations and finance to their roles. Not everyone needs to be an engineer or a financial analyst, but proficient managers do need to grasp the fundaments of energy management and return on investment. We also look at one of the industry's worrisomely less-frequented career portals and the need to replenish and expand the ranks of building operators. Happily, persistent innovation and advances in building technology are helping to make the career an easier sell to students and newcomers to Canada. Filimon Tsionas, a Professor in the Building Environment Systems program at Seneca College in Toronto points to the challenges that can also be an enticement to an interesting, engaging workplace. "As buildings become more elaborate, you need to know how all the systems work together and how to make everything run efficiently," he says. It's an observation that could be equally apt for many elements of property management.
Barbara Carss barbc@mediaedge.ca
VOL. 30 NO. 6
OCTOBER 2015
Editor-in-Chief Barbara Carss barbc@mediaedge.ca Publisher Sean Foley seanf@mediaedge.ca Contributing Writers Matthew Bradford, Karen Shriner, Rob Robinett, Leah Waldrop Senior Designer Annette Carlucci Wong annettec@mediaedge.ca Designer Jennifer Carter jenc@mediaedge.ca Production Manager Rachel Selbie Ricca rachels@mediaedge.ca Production Coordinator Karlee Roy karleer@mediaedge.ca National Sales Sean Foley seanf@mediaedge.ca Mitchell Saltzman mitchells@mediaedge.ca Digital Media Director: Steven Chester stevenc@mediaedge.ca Circulation: Maria Siassina circulation@mediaedge.ca Alberta & B.C Sales Dan Gnocato dang@mediaedge.ca
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/cpmmediaedge /CDNPropMgmt /cpmmediaedge 4 October 2015 | Canadian Property Management
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contents
Focus: Staffing & Service Delivery 10 Skilled Trade Demand: Property managers, industry organizations and community colleges focus on keeping the talent pipeline flowing. 14 Leadership Qualities: Thinking strategically, communicating effectively, delegating appropriately and setting an example for hard work, loyalty and honesty are all part of the essential skill of people management. 17 Tasks & Knowledge Areas: Real estate professionals examine and prioritize job functions. 18 Technology to Support Productivity: Service delivery through hands-on attention and digital platforms. 20 IT meets FM: Integrated facilities management draws on analytics for heightened business intelligence. 22 Data Aggregation & Interpretation: Integrated software serves growing demand for internal and external investment reporting and analysis. 30 Best Practices for Vacant Properties: Retail closures can result in a slate of dark properties that continue to require vigilant upkeep.
Articles: 26 Bill Garland's Legacy: Former president of BOMA Toronto, BOMA Canada and BOMA International had many talents and many friends. 28 Properties with Potential: Industry insiders examine the prospects for 2016.
Departments 4 Editor’s note
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MENTORING WITH AN AGENDA
On-site Internships Capture Building Operator Prospects
By Matthew Bradford
Operations and maintenance insight at
10 October 2015 | Canadian Property Management
THE COMMERCIAL real estate industry is proactively strategizing to replenish Canada's aging pool of building operators. Property managers and educators alike are keenly aware of the need and competition for new skilled talent as buildings increasingly rely on sophisticated technology, controls and automation systems. “In my 30-plus years in the industry, I've never seen such a high demand for building operators," reports Filimon Tsionas, a Professor and Program
Coordinator of Mechanical Engineering Technology Building Sciences at Seneca College in Toronto. Happily, students like Adam Odendahl represent a new generation who see opportunities for a dynamic career. “I became interested in building operations because of my father. He worked for Siemens and would show me the specs of the boilers and the chillers on his computer," Odendahl recounts. "He always loved his job and talked about it often. Now, it’s nice to be
staffing&servicedelivery "In textbooks and in the classroom, you don’t get to see the entire machine, so being able to piece it all together has really helped me understand the systems better,” he says. “There are so many different varieties of boilers, chillers and air handling units that it’s nice to be able to put theory to practice.” PLACEMENTS AS JOB AUDITIONS The BES program has similar partnerships with several major property management companies, which have capitalized on the opportunity to groom trainees who are also getting required theoretical fundamentals from a highly regarded education program. “In many cases, co-op placements are a student’s first step in getting a good job, and often with the company through which they had their co-op,” Tsionas notes.
In fact, it's something of a workers' labour market these days with employers willingly queuing for a chance to woo prospective job candidates. GWLRA's Building Operator Partnership Program is a response to those conditions, and is targeting students who will be seeking their first fulltime employment and immigrants now establishing careers in Canada. Notably, the first recipient of the company's newly established scholarship for building operators is Yi Zang, a second-year Seneca student who came to Canada with a Bachelor of Civil Engineering & Diploma of Building Technology Science and 13 years combined experience in construction management and engineering.
ADDRESSING THE AGING HVACR WORKFORCE
able to sit down and talk to him about what I’ve done during the day and what I’m learning.” As a student in Seneca's Building Environment Systems (BES) program, Odendahl's classroom learning is further augmented with a co-op placement that provides hands-on experience. That occurred in two Toronto office complexes – College Park and North York Centre – with supervision from his co-op sponsor, GWL Realty Advisors (GWLRA).
A joint Canada-U.S. study of labour demand in the HVAC and refrigeration sectors concludes Canadian industry and colleges have had greater success drawing new technicians to the field than have their American counterparts. Nevertheless, the recently released findings suggest both nations face a skills shortage as the aging HVACR workforce nears retirement. "HVACR programs in the United States and Canada are seeking new students, from recent high school graduates to veteran or second-career adults," reiterates Kari Arfstrom, Executive Director of the HVACR Workforce Development Foundation (WDF). Already, U.S. employment analysis shows that job postings for HVACR specialists remain open 12% longer than other positions requiring comparable skill levels. Refrigeration technician tops the list of in-demand "middle-skill occupations" (along with broadcast technician) in taking an average of 44 days to fill, while HVAC installer/mechanic ranks 10th (along with network/systems support specialist) at 36 days. In comparison, across all middle-skill occupations it takes an average of 29 days to fill an open position. Nearly half of the existing HVACR workforce will be eligible for retirement over the next decade, but technical and community colleges turned out only about 21,200 newly qualified individuals in the 2014-2015 school year – a rate that will not keep pace with required replacements and anticipated job growth. HVACR instructors in Canada and the U.S. recommend concerted recruitment efforts, which also target women, minority groups and older adults considering a second career. Toward that end, the WDF commends the Heating, Refrigeration and Air-conditioning Institute of Canada (HRAI) and associated Canadian players for proactively tackling the skills shortage issue at a much earlier stage, beginning with a 2007 study. "The key strategy in Canada has been to attract more young people into the industry, and it's working," the WDF's executive summary states. Part of that lies in promoting what the industry has to offer. "With HVACR certifications, new employees can be assured of a solid middle class job that cannot be off-shored, is high-tech and offers better-than-average pay," Arfstrom maintains. For more information, see the HVACR Workforce Development Foundation website at http://www.careersinhvacr.org/site/1/Home – Barbara Carss
Canadian Property Management | October 2015 11
staffing&servicedelivery "The Building Operator Partnership Program is an important part of how we are addressing the building operator talent shortage," explains Charles Stade, GWLRA's Vice-President, National Commercial Property Management. “The co-op placement not only allows us to be a mentor and give back to the community by providing a real work environment and coaching, but we are able to build our talent pipeline by observing and evaluating a student’s skills for future hiring opportunities.”
“In my 30-plus years in the industry, I've never seen such a high demand for building operators.”
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ARRIVING RESOURCES Looking to western Canada, partnerships have been formed with the Calgary Catholic Immigration Society (CCIS) 5th Class Engineering program, which was specifically designed to link landed immigrants and the Canadian real estate market. “It is not just CCIS’s 5th Class Power Engineering training that these competent young individuals bring to the field, they also bring with them extensive education and relative experience along with transferable skills from their countries of origin,” advises Monika Bhandari, CCIS Senior Program Coordinator. For example, GWLRA's recent hire, Obi Ugo-Okeke, was a mechanical engineer in Nigeria before coming to Canada. “Before the program ended, Obi was offered a job by GWL Realty Advisors in Calgary, where he had been placed for the work experience component of the program," Bhandari says. "In fact, every partnering company hired at least one graduate, and as the word got out to other companies in the industry, graduates received multiple job offers." Stade predicts programs like CCIS will continue to be an important supplier to the talent pipeline. “Many immigrants come to Canada well trained and experienced in a professional career," he observes. "Working with organizations such as the CCIS is an important part of our recruitment strategy in Calgary. It connects us with new Canadians that have a technical background and are looking to apply their skills and knowledge.” zz
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Matthew Bradford is a freelance writer and editor. 12 October 2015 | Canadian Property Management
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Navigating the Executive Career Track Leadership Qualities for Commercial Real Estate Success Real estate HR specialists, Hays Canada, delved into the DNA of a Commercial Real Estate Leader through a survey of more than 100 Canadian commercial real estate leaders and an examination of the resumÊs of 100 vice presidents. The following is an excerpt from the resulting report, analyzing skills, qualities and experiences that senior executives commonly share – Editor. PEOPLE MANAGEMENT is ranked as the most important skill a commercial real estate leader must possess. It’s a people business and 87% of respondents say their team's overall ability is important to extremely important to their own individual success. The number one weakness vice presidents admit to is their inability to delegate (23%). This could be a result of the inherent nature of the industry and countless years of hard work, dedication and perseverance the industry demands, resulting in difficulty letting go of aspects of the role that have been so close to the individual. Next to people management, work ethic is the second most important trait respondents say is necessary to advance in this industry, proving that leaders have to lead by example. More emphasis is placed on learning and developing soft skills as professionals climb the career ranks in commercial real estate. Of these, communications tops the list as one of the most vital soft skills among leaders and potential hires alike. Leveraging communication skills to handle situations strategically is essential. Forty per cent say strategic planning, providing solutions to meet organizational goals and problem resolution are vital elements of a senior role. Leaders must be strategic and strong critical thinkers with the ability to act quickly and decisively in challenging situations. Interestingly, though, these elements remain second to people management. True leaders will empower their teams to support them in strategic plans and in problematic situations. Hard work and dedication are fundamental elements. Fiftyfour per cent of respondents reported they had 15 to more than 25 years of experience before they achieved the VP title. When asked about the single most important attribute that enabled VPs' success, the majority of respondents noted hard work, determination and loyalty. Six out of 10 respondents 14 October 2015 | Canadian Property Management
staffing&servicedelivery say having a work-life balance is very difficult, with 63% saying this has to do with the work, which is characterized by pressure, hours in the office and work load. The key to becoming a leader in commercial real estate is understanding that it is a team industry. Leaders will achieve great success if they can build a high-performing team that can be trusted and delegated to, while being led through the many obstacles that the role presents. EXPERIENCE Having a broad range of experiences in commercial real estate is a necessary part of becoming a reputable professional within the industry. For example, 73% of VPs and more senior positions have experience in the residential sector (25% have more than 10 years of experience), and 54% have experience in the condominium sector (18% have more than 10 years), as well as commercial real estate (89% have more than 10 years of experience). Further to this, more than half have 10+ years of experience in retail, commercial office and industrial types of assets. Interestingly, only 19% actually began their career in property and facilities management. For example, 13% started in sales, 14% in accounting or finance roles and 16% began in operations. Once working within commercial real estate, the majority of today’s VPs moved within functional areas. Notably, 37% have worked in all major areas in property, including property management, leasing and lease administration, asset management, development and building operations. Many of Canada’s VPs have expanded their horizons outside of the local market, with 37% citing international experience, primarily in the United States. In organizations with a business value between $100 million and $1 billion, 46% of respondents have international experience. Nearly a third of those who lead organizations that conduct business worth $1 billion or more say it is unlikely they would have achieved their role without an international background. Overall, 84% say their international experience has had a positive to very positive impact on their role and 64% would consider an international opportunity. NETWORKING 37% of commercial real estate professionals have been working in the industry for more than 20 years (an additional 37% between 10 and 20 years). With many years under their belts, senior leaders today have strong roots within the industry that have helped them advance their careers. For example, 59% got their current role through networking, whether through an industry or technical event, an industry social event, through memberships or social media. Along their career path, respondents reported challenges in getting promoted. This was consistently the case in moving from junior to mid-management to senior and executive levels. The number one challenge across all levels was the lack of opportunities within their current organization. At more junior levels, years of experience was also a factor, whereas at the more senior levels, the higher level of competition in the marketplace became a factor. Involvement in associations and the industry as a whole could help employees combat these factors by gaining more tangible work experience as well as raising profiles ahead of the competition. Should the opportunities not be available, the lack of a strong network could delay career advancement or title progression in a current organization. 82% of respondents say networking is very to extremely important and 26% say they network monthly, while 31% network quarterly.
Further to this, 46% have had a mentor at some point during their career and 30% currently have one. 61% say they are unsure or would not have achieved their current role if it wasn’t for the guidance and support of their mentor. Interestingly, when asked about the biggest obstacle to being promoted, senior to executivelevel respondents said not having the right mentor or leader was second to a lack of opportunities. PROFESSIONAL DEVELOPMENT The market and industry is ever-changing. Technology continues to challenge how professionals conduct their day-to-day functions. Being open to change and committing to ongoing learning and development throughout all stages of a career will help keep employees in touch with trends in the industry while enabling continued career advancement. 82% say professional development is very to extremely important and 36% engage in professional development annually. A quarter (25%) commit to quarterly professional development, while 15% do it on a monthly basis. 78% of respondents are members of a property association and 61% have taken courses such as leadership management, executive training and customer service seminars. Even at the senior leadership levels, despite people management and leadership skills being essential components, employees still have to demonstrate an understanding of the current market and technical expertise. Case-in-point: 22% say the biggest mistake they have made is a technical error. zz The complete text of DNA of a Commercial Real Estate Leader can be found at www.hays.ca/dnaCRE
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SCRUTINIZING JOB FUNCTIONS
Residential and Commercial Managers Prioritize Some Skills Differently
NEW SURVEY RESULTS reveal that credentialed residential property managers have some key diverging priorities from their peers in the commercial sector, despite the many similarities in their job functions. Data recently collected from more than 1,400 Canadian and American property and asset managers with certification from the Institute of Real Estate Management (IREM) underscores the importance of marketing and leasing skills in the rental apartment sector and the relative lesser weight given to sustainability issues. "For office buildings, the primary people responsible for marketing and leasing are brokers rather than the property manager," the executive summary of the survey results explains. "It is also something that is likely to come up less often for office buildings since office leases can be five, 10 or even 20 years in length rather than the 12 months or less for conventional apartments." The job analysis survey, which is central to IREM's ongoing scrutiny of required competencies and criteria for certification, asked respondents to rate the importance of job-related tasks and knowledge areas that support the fulfillment of those responsibilities. Questions fell broadly into six categories: maintenance and property operations; financial operations and asset management; legal and risk management; leasing and marketing; human resources; and client/owner relations. A seventh category, crossfunctional skills, was added for consideration of knowledge areas.
Overall, enforcing operating policies and procedures emerged as the most important task, with 88% of managers considering it important or very important. Communications was seen as the most important knowledge, deemed important or very important by more than 95% of managers. Comparing the responses of residential and commercial property managers, seven of each group's top 10 tasks are the same. However, more than 80% of apartment community managers ranked "marketing leasable space" as important or very important, while only 40% of office building property managers gave it that prominence. An even smaller percentage of commercial managers deemed "implement a leasing plan for the property" as an important or very
important task, in contrast to more than 80% of residential property managers who viewed it that way. Meanwhile, more than 50% of office building property managers ranked sustainability issues as important or very important, while less than half of the total respondents felt that way. "Sustainability generally doesn't register high on tasks for multi-family managers, but site managers at residential communities do believe that it is important for them to educate residents on the role they play in sustainable practices, e.g. energy and water conservation," the survey's executive summary states. zz For more information about IREM's job analysis survey, see the website at www.irem.org. Canadian Property Management | October 2015 17
staffing&servicedelivery
SMART ASSETS NEED SMART DEPLOYMENT Technology Ushers in New Era of Human Productivity
TECHNOLOGY WILL continue to play a important role in service delivery, both in monitoring and controlling the built environment and in supporting the staff who manage it. The following are identified as emerging technological trends in property and facilities management. Machine to Machine (M2M) Technology Machines that talk to each other through wireless technology will improve asset management and remove waste from maintenance processes without the need for human interaction. Workplace productivity will improve, while the impact of downtime, lost revenue and the risk of negative reputation, caused by badly maintained or failed equipment, will be reduced. Research suggests there could be more than 22 billion M2M connections by 2023. The use of smart temperature sensors for HVAC systems; remotely monitored security alarm systems; and remote tracking and status information of assets, from fleets of trucks to vending machines, will result in less cost, less energy use and less time.
18 October 2015 | Canadian Property Management
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Integrating FM Software for Cross-Departmental Collaboration There is a new wave of integrating computer-aided facility management (CAFM) with other departments’ expert systems to ensure that conditions in the workplace encourage high productivity. Facilities managers will embrace the coherent and collaborative use of technology to increase business efficiency and improve data quality. Integrating FM software with BMS (building management systems), ERP (enterprise resource planning), space planning applications, HR tools and environmental management systems gives the capability to deliver one comprehensive picture of the functioning entity. Mobile Access On and Offline Anytime, Anywhere Rapid developments in mobile technology and the proliferation of mobile devices have created ubiquitous connectivity and the ability to access data everywhere. Businesses are embracing the trend for Bring Your Own Device (BYOD) and the rise in mobile facilities management software apps. This offers facilities managers better flexibility and control of daily operations, along with improved reporting and huge potential to drive up service levels. An increased use of touch-screen and interactive tablets facilitates the logging of jobs and booking of rooms, as well as improved interaction with the premises. Improving Staff Skills through Online Collaboration Maintenance and engineering technicians need to be constantly on the move and mobile devices will make online collaboration with industry experts and remote task management possible. HD images, video, calling facilities, such as Skype, and 4G will give staff the ability to confer live on site. Overseen by more experienced colleagues, they can seek expert advice on the job, increasing the opportunity to secure a first-time fix, improving the work process flow and reducing costs. This allows remote resources to be intelligently assigned, based on work schedules and operator skills, to provide users with an intuitive single point of contact.
Decentralised Help Desks The relationship between the help desk and supporting functions is critical in achieving ultimate customer service performance. The automatic, smart allocation of jobs is streamlining the help desk process and allowing for the reallocation of critical resources. A better service quality and customer focus can then be delivered through a smaller help desk team that can concentrate on exception management, rather than being bogged down by standard everyday issues. Voice-Enabled Help Desk Apps The first voice-driven mobile apps for the help desk are enabling the logging, tracking and signing off of jobs, from start to finish, simply through a vocal command. Voice recognition autopopulates the help desk to allow mobile request management, reduced response times and increased operational efficiency. Smart Tagging and Resource Scheduling Smart tagging technology and the use of dynamic resource scheduling software, combined with GPS tracking, locates the closest service provider or operator (e.g. using Google Maps) to pinpoint building locations and smart routes within a facility. Technology is optimizing processes and productivity, bringing time and efficiency savings to the customer and the company. Smarter Assets Smart assets can make processes more efficient, give products new capabilities and lead to new business models. New technology, which gives assets the power to capture, communicate and collaborate, is transforming the management of assets to make them more productive and less costly to maintain. As smart assets become increasingly sophisticated, with the capability to self-diagnose and highlight problems by raising alarms, this will support asset lifecycle management and deliver strategic information to implement change.
Integrating BIM with FM Software for Quality Data Building information modelling (BIM) is one of the most talked about concepts in the facilities industry, particularly in the United Kingdom, which has mandated fully collaborative 3D BIM for all public sector procured projects beginning in 2016. The opportunity for BIM lifecycle management to integrate BIM with existing CAFM systems to provide reliable and meaningful data, is encouraging facilities managers to adopt BIM from the planning phase to the decommissioning of built assets. BIM offers a great opportunity for those who deal with end-user needs to impact the whole life-cost of a building by working collaboratively with the construction and design industry. Rise of the Robots The robots are coming and automated systems are on the advance in facilities management, particularly when it comes to energy management and use in hospitals. In hospitals, from soap dispensers that send out alerts when they are empty to robotic automatic-guided vehicles (AGVs) that transport food, linen and hospital stores, robots are helping staff to carry out their work in a safe, hygienic and efficient way. However, it’s not just the health care system that can benefit from intelligent FM technology, robots are already being used in cleaning; for security control and food delivery; drones are being used for property surveys; and in one hotel in Japan the receptionist is a humanoid with blinking lashes. zz The preceding article has been supplied by SWG, a global specialist in facilities, proper ty and workplace management software. For more information, see the website at www.swg.com.
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Canadian Property Management | October 2015 19
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STANDARDIZATION CONNECTS BUSINESS PROCESSES AND PLAYERS IT Embedded in Integrated Facilities Management CONVERGING ADVANCES in information technology and facilities management serve evolving industry expectations. Integrated facilities management (IFM) is now the common term for the integrated nature of the business, its processes and the types, sources and uses of information. The increased demand for business intelligence and analytics cannot be fulfilled without effective integration of information from multiple sources and a common information architecture 20 October 2015 | Canadian Property Management
adhered to by all business partners. In turn, effectively managing big data and innovative initiatives in IFM calls for standards. Similarly, service firms are looking to standardize the service delivery model, requiring consistency in the way information is used, aggregated and delivered, while a shift to new performance fuels demand for improved benchmarking. Several new forces are now in play:
staffing&servicedelivery • IFM costs are a significant component o f To t a l O c c u p a n c y C o s t f o r occupiers and therefore need to be linked as part of a hierarchy of costs and the chart of accounts. • Asset management is getting greater attention, including links to other functions. The line between facilities and IT is blurring, such as linking Moves, Adds and Changes (MACs) to telephony and networks. Intelligent building systems are more often the responsibility of FM. Systems monitoring and maintenance planning means greater understanding of assets and their maintenance needs. • The links between IFM and finance are deepening on a number of fronts, such as linking IFM expense budgets to capital planning, linking expense management to financial charts of accounts and linking IFM to project management and construction budgets. • RFPs for systems and services require integration of databases, systems and data standards. For example, OSCRE (Open Standards Consortium for Real Estate) information exchange standards are becoming a requirement in RFPs for service providers to ensure that information is gathered and exchanged in consistent ways from all sources and systems. • End users want speed. They expect their service providers and software firms to easily and quickly integrate their systems and data with corporate systems and databases. Service providers have to move quickly to transition into new accounts. The demand for speed emphasizes the value and importance of standards, and the quality of information the implementation of standards provides. • IFM has to address the increasing interest in measuring building and portfolio performance for sustainability purposes. While there has been some progress, an effective cost structure and performance measurement model has not been developed that captures the direct impacts of sustainability across the full spectrum of IFM, making reporting for sustainability much more difficult.
Integrated facilities management (IFM) is now the common term for the integrated nature of the business, its processes and the types, sources and uses of information. • Data governance and transparency is becoming a top priority. Data governance means a common data model, high rigour around data quality, well-constructed contracts for data management, data ownership by key players in the IFM functions, and increased involvement of procurement, IT, accounting, risk management, audit and compliance business units. Data governance is also becoming a primary requirement in outsourcing contracts. There are specific implications and transformational change occurring in the industry as a result, including: • Effective data governance will become a core competency. The most successful end users and service providers will have strong data governance practices built into their business processes, contracts and data architecture. • Information aggregation and systems integration will be critical. Bringing information “into the middle” is a key to success. There are new market entrants from outside the real estate industry that could begin to gain traction. • Services and systems together. With end users and clients being agnostic to systems and looking for flexibility and value–add services, a new business opportunity exists as a combination of services and systems. The question is where is that going to come from? New market entrants could change the lineup of offerings in this area.
• Standards become more important than ever. After a long road to reach this point in the area of information exchange standards, the convergence of these influences and pressures means standards are in high demand. Alignment of information exchange standards will become a more prevalent strategy combining complementary standards such as OSCRE, COBie and others to provide flexibility in implementation. • Gaps in standards will fill quickly. The increased attention to standards focuses light on where there may be information gaps. Leading companies are looking at the full spectrum of standards today and identifying where the gaps are. Constructive collaborations will emerge to provide the leadership to fill the gaps and ensure the needs of the industry are met. • New capabilities will be needed in IFM. The capabilities in the IFM function will begin to focus on information stewardship, data governance and transparency, a focus on performance management, implementation of standards globally, and a better understanding of how to use this information for business intelligence and analysis to improve performance. zz
The preceding article is excerpted from a white paper from the Open Standards Consortium for Real Estate (OSCRE). For more information, see the website at www.oscre.com. Canadian Property Management | October 2015 21
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SPREADSHEETS SPREAD THIN Integrated IT Urged for Investment Reporting and Analysis S O F T WARE PROVIDERS and advisory services calling for heightened real estate industry investment in information technology (IT) aren't entirely self serving. The argument is backed with findings from a recent survey of 320 senior corporate real estate executives worldwide who revealed a lag in financial reporting and data management spending compared to other kinds of technology. It's estimated the corporate real estate industry invested U.S. $59.3 billion, globally, in building automation systems in 2014 versus $1.2 billion in IT software systems. Corporate real estate also trails other sectors in the percentage of its revenue spent on IT – at 3%, compared to 4.3% in the manufacturing and resources sector or 5.7% in the financial services industry. The new report, Future-Proofing the CRE Industry: Is Commercial Real Estate's Innovation Curve Moving Fast Enough?, from Altus Group and ARGUS 22 October 2015 | Canadian Property Management
Software emphasizes real estate's growing stature as an asset class, but suggests its investment reporting and analysis capabilities aren't keeping pace. In particular, the report critiques the industry's still significant reliance on spreadsheets and the prevalence of so-called data silos – i.e. single-purpose software that complicates the aggregation of multiple sources of data. About 30% of survey respondents use spreadsheets, while only about one-quarter have implemented integrated suites of software for cross-functional numbers crunching. "Potentially U.S. $11-trillion of assets are being managed in manual spreadsheets with all their inherent risks of human error and inefficiencies," the report contends. "This unconnected approach to managing data makes it harder to generate top-level oversight of the business in a timely fashion. It can take weeks or months rather than hours or minutes to aggregate the data, apply the sensitivity analysis and reforecast the
returns, by which time the situation has already changed." Many of the survey respondents acknowledge they are not adequately taking advantage of technological innovation and confirm plans to invest in better exploiting big data. While voicing concerns about data quality and regulatory requirements that currently pose obstacles, they also admit a lack of tools to capture and analyze multiple, interrelated streams of data. This is occurring in the context of institutional investors' growing appetite for real estate. Alternative asset classes, in which real estate figures prominently, once typically accounted for about 5% of any given institutional investment portfolio. Today, it is closer to a 10% portion, and the report cites a PricewaterhouseCoopers projection that real estate allocations could one day be in the 20% range. In tandem, requirements for internal and external reporting have escalated.
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staffing&servicedelivery The report tallies investors' demands for more frequent and detailed reports in consistent formats that can be attained via mobile devices. The ability to benchmark and compare asset performance is becoming increasingly critical. "With so much institutional capital up for grabs over the next decade, early movers in adopting best-in-class data management and reporting practices have a real opportunity to differentiate themselves from the technology have-nots," asserts Bob Courteau, Chief Executive Officer of Altus Group. "Investors raised on a diet of instant access to information on their investments in shares, bonds and equities have little appetite for manual spreadsheet-based calculations and forecasting which require significant manpower to make updates on the latest rates, rents or cap rates," the report reiterates. zz The complete text of Future-Proofing the CRE Industry can be found at http://info. argussoftware.com/innovation_report
PRE-SCREENING STREAMLINES ONLINE PURCHASING
By Leah Waldrop Distributors are losing influence in purchasing decisions as product selection and ordering increasingly occurs online. The process isn't necessarily straightforward when large volumes of building supplies are in play, however. Purchasers will need to input a lot of specifications and erroneous data entry can have large scale and costly repercussions. Recognizing that purchasers can still benefit from some guidance, product distributors are now introducing online purchasing programs to develop a profile of the property or properties in question, and the property/facility manager's needs. With this in place, the program can pre-select a more scoped range of products for prospective buyers to examine. The question used to derive customers' profiles might look something like this: • What is most important to the success of your facility? (green issues, operating efficiencies, marketing and branding, etc.) • How important is reducing supply-chain costs to your facility? • What is driving your facility’s sustainability initiatives? • Are you currently using forecasting and budgeting tools? • Is your facility certified by a third-party organization or is this a concern? As with other kinds of analytics, the data collected may point to different realities than respondents have assumed. For example, answers might show that sustainability is actually a lesser priority than reducing expenditures, in which case, the online system would showcase lower cost products ahead of pricier green options. Alternatively, answers demonstrating that sustainability is an organizational priority will result in greater emphasis on environmentally preferable products. Leah Waldrop is Marketing Manager with the supply chain management specialist, AFFLINK. For more information, see the web site at www.afflink.com.
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35-YEAR BOMA STALWART Bill Garland Leaves a Legacy of Accomplishment and Friendship By Barbara Carss RELATIONSHIPS FORGED through the Building Owners and Managers Association (BOMA) figured prominently in Bill Garland's multidisciplinary, crosscontinental professional circle and among his lasting friends. His death, September 29, 2015, leaves many reflecting on his industry contributions, his camaraderie and his courage in facing a long and difficult illness. A 35-year BOMA stalwart, Bill was a past president of BOMA Toronto and BOMA Canada and one of only two Canadians ever to serve as president of BOMA International, as well as a property manager and respected consultant specializing in building operations and cleaning services. Outside the workplace, he was a certified sommelier, a pilot, a race car enthusiast and an embracer of the outdoors, whether skiing, boating, golfing or tending to his farm in the Ottawa Valley. "Bill was a connoisseur of everything he did, but he didn't spread himself too thin," says long-time friend Bill Stallan, an equally longstanding member of BOMA Toronto. "He could be hard-nosed and he was a man of few words, but he had a generous spirit. Among other things, BOMA is a big social club, and we all had such great times together." First joining BOMA Toronto in 1980, Bill served as chapter president from 1989-91. Next, his tenure as BOMA Canada vice president, in 1991-93, provided his first exposure to BOMA International as the Canadian representative on the president's advisory committee. During his term as BOMA Canada president, 1993-95, the association marked its 50th anniversary and Bill received the President's Award for Outstanding Service from BOMA International. Those years also cemented his friendship with his west coast peer, Wayne Smithies, president of Martello Property Services Inc. The two met 25 years ago in Calgary at the inaugural BOMEX – BOMA Canada's national conference and 26 October 2015 | Canadian Property Management
exposition – and were soon sharing board rooms and ski slopes. "Bill was vice president when I was president of BOMA Canada. Our families would come to the networking events, and his boys met my son and they were all BOMA brats together," Smithies recalls. "I have pictures on the wall of my new home in Whistler of Bill and his sons." OUTREACH & INFLUENCE Bill was the last BOMA International president to serve a two-year term, from 1997 to 1999. While closing out one millennium in that role, he remained a valued advisor into the next. Ann Coslett, BOMA International's director of executive services, remembers him as something of a constant over her BOMA career. "When I came to BOMA International 28 years ago, Bill was an active member of the leadership team. He was active on committees before becoming an officer and then the president. We soon developed a friendship which grew over the years and became solidified during the early stages of his illness," she says. "Bill was always passionate about the relationship between BOMA Canada and BOMA International – working hard to improve that relationship. His contributions to BOMA International were critical to the development of the organization as it grew to what it is today." The same holds true for his home chapter. "We want to acknowledge the tremendous influence he had on many careers in the real estate industry," affirms Susan Allen, president and chief staff officer of BOMA Toronto. Professionally, Bill was president and owner of Daniels Associates Inc.'s Canadian operations. He was one of the earliest proponents of daytime cleaning, a practice now widely accepted in commercial buildings and credited with saving energy and boosting worker productivity. He co-authored Office Building Cleaning Operations in North America and edited Cleaning Makes Cents, both publications
that BOMA International commends for helping to increase property managers' awareness of cleaning costs, innovation and the variables that affect service delivery. Bill's concern for workers' well-being is likewise evident in his writings over the years for Canadian Property Management where he tackled issues such contractor responsibility, wage levels and the emergence of organized labour — maintaining that employers' investment in reducing staff turnover would yield returns in morale, performance and customer satisfaction. DISCERNING TASTE Training as a chemist led Bill to his initial career in the cleaning/janitorial sector, but Stallan suspects it also supported his ardent interest in and vast knowledge of wine. Observers were invariably impressed with Bill's ability to taste and identify the grape, country of origin and year of the vintage, while witnesses report even sommeliers on duty in restaurants would be drawn in to listen to Bill's discussion of the wines on the menu. "He had a huge cellar, himself, with incredible wines," Stallan notes, yet recalls when Garland's own ice wine was the unanimous crowd favourite at one of the many wine-tasting events he hosted for his friends. Although he was less proficient at golf, Bill's take-up of the game was in keeping with a history of rising to a challenge. "He really didn't have the frame of mind to be a golfer, but that made him even more determined to prove the sceptics wrong," Stallan recounts. No doubt, he drew on the same tenacity in facing his illness. Donations in Bill's honour can be made to CurePSP (www.psp.org), a research and support hub for neurodegenerative diseases. zz T h e p re c e d i n g a r t i c l e i s re p r i n t e d from the REMI network. See www.REMInetwork.com.
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2016 REAL ESTATE BEST BETS Low Dollar Raises Prospects for Warehouse/Distribution Space REAL ESTATE INDUSTRY insiders see the industrial sector as the likeliest beneficiary of the decline in energy prices and Canada's weak dollar. A pick-up in exports coupled with lower transportation costs should translate into increased demand for warehouse/ distribution facilities. Meanwhile, community shopping centres and medical office properties are considered more resilient in a sluggish economy and poised to prosper when good times return. The newly released Emerging Trends in Real Estate, 2016 – the annual forecast and analysis from PwC and the Urban Land Institute (ULI) – predicts those three property types will be among the better performers as the Canadian real estate market generally cycles downward. New purpose-built rental housing is also generating investor interest as it becomes increasingly difficult and costly to acquire existing stock, although some of the report's sources advise new construction is a leap best left to longterm holders like institutional investors and large REITs. "Caution and prudence characterize today's Canadian real estate players," the PwC/ULI report observes. "Many of our survey respondents suspect that Canada's real estate markets are due for a breather after so many years of economic and real estate expansion – and they're acting accordingly." The report's conclusions are drawn from personal interviews with real estate developers, owners, managers, sales and leasing specialists, written responses to questionnaires, real estate market fundamentals and wider economic data. When asked to rate the investment and development outlook for six property types, Canadian evaluators placed nothing in the "good to excellent" nor in 28 October 2015 | Canadian Property Management
the "abysmal to poor" categories. However, all property types except single-family residential were gauged to be "fair to good" investment prospects for 2016. Of these, industrial properties are assigned the most favourable investment and development potential, attaining a score of 3.61 out of 5 on the investment scale and 3.43 out of 5 for development. Drilling down to specific property uses, fulfillment centres, warehouse industrial, medical office and neighbourhood/ community shopping centres rank as the top four (out of 16) investment prospects, while warehouse industrial, fulfillment centres, medical office and luxury rental housing are considered best bets for new development. The report points to economic, technological and cultural factors in the ascendancy of warehouse/distribution facilities. Logistics hubs serve the anticipated export uptick as an improving U.S. economy spurs product demand and associated interest in exploiting an exchange rate that favours American importers. Toronto and Montreal, with proximity to the Canadian manufacturing belt and large markets in the U.S. northeast, appear well situated to capitalize on this dynamic. The PwC / U L I r e p o r t s f u r t h e r speculates on other possible economic spinoffs. "Should U.S. firms choose to capitalize on the stronger U.S. dollar to hire skilled Canadian staff, the office sector, especially suburban office properties located near or on transportation hubs, may also benefit," it suggests. Domestic consumers also figure in the projections for industrial properties as the rise in e-commerce makes distribution centres a prominent piece of the retailing formula. "Smaller store footprints,
locations that combine both retail and distribution functions and click-andcollect facilities will become increasingly common," the report forecasts. Functionality has been a key aspect of competitiveness and new industrial development in recent years, resulting in buildings with lower ceiling heights being consigned to obsolescence. Now, retrofit/redevelopment of older properties is identified as an increasingly popular option – particularly to avoid a move to other side of the Greater Toronto Area's extensive protected greenbelt – often deemed more cost-effective than new development. Likewise, the cost of new development and uncertain paybacks of a market frequently subjected to regulatory controls has traditionally presented an obstacle to the development of new rental housing. On the flipside, a meteoric rise in house prices – most significantly in Vancouver and Toronto – now fuels two types of demand for rental units: from a growing demographic of permanent renters who can't afford to buy or have rejected the choices they can afford; and older homeowners cashing out their increasingly valuable asset. Investors have few options to tap into this demand via existing supply, which almost invariably comes with low cap rates on the rare occasions it's up for sale. This underlies a current surge of new purpose-built projects. Similar factors – demographics and perceived inadequacies of existing stock – bolster medical offices as one of the forecasted top-four properties for 2016. zz The complete text of Emerging Trends in Real Estate, 2016 can be found at www.pwc.com/ca/en/industries/realestate/publications/emerging-trends-realestate-canadian-summary.html
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BRIGHT MANAGEMENT FOR DARK STORES Vacant Sites can be a Portfolio within a Portfolio
RETAIL STORE CLOSURES call for dark store management practices to protect assets, maintain brand image and ensure properties are ready for potential tenants and buyers. An organized process can reduce the expense of taking active retail space out of service. The process might not be fun, but the process can definitely be easier. As retail facilities management consultants, Karen Shriner and Rob Robinett, advise in the Professional Retail Store Maintenance Association (PRSM) 2015 Best Practices Guide, retailers should view their vacant sites as a portfolio and apply portfolio-wide management strategies. Meanwhile, contractors/suppliers can best meet these needs with an operational approach that accounts for facility type, climate zones and neighbourhood conditions. Shriner and Robinett's suggested steps for retailers include: • Empty dark stores of all fixtures, including signs, logos, canopies, awnings etc. • Ensure the space is accessible through a secure key management program. A simple weatherproof combination lockbox can provide the means of access for associates, authorities having jurisdiction, utility companies and contractors. • Perform monthly store visits, either by the 30 October 2015 | Canadian Property Management
local facilities team or a supplier, and create a simple way to communicate and report deleterious conditions. A small sticker on the storefront with basic contact information, including after-hours phone numbers, is extremely helpful. • Consider the extra security that a fence and padlock system can provide in challenged areas susceptible to trespassers or vandalism. • Establish required minimum levels of maintenance such as snow removal for access and landscaping, HVAC preventative maintenance and winterization, and perform all fire safety and utility inspections. A site that looks well tended typically attracts less illegal activity. For contactors/suppliers, Shriner and Robinett emphasize scalability and delivering field services in a logistically organized way, ideally through established relationships with trades in various regions. They recommend: • Working together with the retailer, develop a monthly visit menu or checklist based on the type, location of the facility, as well as the type of
equipment located in the building and the budget available. • Some considerations when planning the checklist that should be specifically considered are: retail tenant units (RTUs) versus central plants; climatic zones; whether the property is in a strip mall or regional mall; or owned versus leased. By using this menu of items, services can be tailored to meet the goals and budgets of the clients, whether that means the bare minimum of services or the full offering. • If possible, offer a full spectrum of services that includes, for example, landscape, alarm response, repair execution and parking lot maintenance. • All closed stores and facilities should have temperature sensors installed in several locations in the building, hooked up to an appropriate alarm system. Seasonally monitored visits are essential so that temperatures are set for both high and low thresholds based on the climate to prevent mould from growing in the summer and pipes freezing and/or bursting in the winter. Best practices for dark stores include proactive measures to secure and protect the property, provide appropriate access as necessary, perform cost-effective repairs and maintenance, and comply with lease and regulatory requirements. Ultimately, the goal is to improve expense management for non-operating stores with fewer highdollar damage and disaster events. Maintaining appropriate conditions for vacant properties also positions them to be shown to potential buyers or sub-tenants and/or prepares them for impromptu inspections by authorities having jurisdiction. zz Karen Shriner is Director, Retail Facilities, with Rite Aid Corporation, and Rob Robinett, is Director, Field Operations, with Watterson Environmental & Facilities Management. The preceding article is drawn from their submission to the 2015 PRSM Best Practices. For more information, see the website at www.prsm.com.
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