The Next Wave of Proptech Will Drive Tenant Engagement

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For nearly two decades, the commercial real estate industry found itself in a rut, outpaced by technology but widely resistant to change. It took a wave of early proptech companies aimed at the commercial sector — like VTS and Honest Buildings — to drive lasting innovation in CRE by digitizing and automating routine tasks.

SEE ALSO: Key Takeaways From This Year’s MIPIM Proptech Conference

Companies are now saving time and resources they could dedicate to innovating their approach to tenant services, amenities, and in-building technology. That pivot sparked the industry-defining trends we see today, like space-as-a-service and hospitality-inspired workspaces.

Providing a tech-forward occupier experience pays off. Research shows that U.S. office workers who rated their company’s technology as “ahead of the curve” loved their work twice as much as those in more traditional offices. Smart, higher-performing buildings add as much as 11.8 percent in lease value according to the European Commission Directorate-General for Energy, and buildings that demonstrate their strong digital backbone through Wired Certification now command higher rents than their peers.

Now, enabled by technology and driven to differentiate themselves through a tenant-centric approach, owners and developers are turning to the next wave of disruptive proptech: tenant engagement apps. These help tenants items such as accessing control for the building, lighting and temperature control, scheduling conference rooms, transportation, food delivery and concierge access.

Tenant engagement apps will soon become a standard offering in Class A offices, but you shouldn’t launch one just to say you have it. Reports from the startup Quettra indicate that the average app loses 77 percent of its users in the three days after they install it. With the cost of deploying and maintaining a building app climbing into the high six figures, you’ll only have one chance to get it right. 

Furthermore, opening 10 different apps to accomplish 10 different tasks will drive user adoption into the ground. Tenants want a single, easy-to-navigate app to simplify tasks.

Most owners and developers are turning to white-labeled, off-the-shelf applications rather than developing their own platforms. Some proptech companies have successfully grown their platforms by focusing on scalable tenant engagement features that require minimal in-building tech integrations. Others are creating holistic apps that bridge the gap between tenant engagement and operational experience, launching only in a few buildings at a time due to the great deal of integration and tenant involvement required. A building in Amsterdam, the Edge, is often cited as the gold standard; as a worker arriving at the building, your app directs you to available parking, once inside the building, it directs you to an available desk, and no matter where you end up, the app knows your preferences for light and temperature, and tweaks the environment accordingly.

Going into the selection process, you should identify the key features and functionalities you would like the app to provide.

Integrations are key to maximizing the value buildings and their tenants can generate from app usage. Features like ordering lunch or checking transit schedules are powered by soft integrations and are relatively simple to customize if the app has an open API. But more sophisticated tenant engagement apps integrate access and environmental controls into the interface, and these hard integrations are perhaps the most critical step to increasing app usage. 

If tenants must use the app to get into the building, access premium flex space, and dim lighting for a presentation, it will become a natural extension of their life at work. Hard integrations into building systems, however, are more complicated and can increase the cost of deployment for an owner or developer. 

Owners should also ensure that multiple ISPs offer high-speed fiber internet in a building and should install multiple points of entry on different sides of the structure so that connectivity is unaffected if something knocks out service on one side (roadwork is a frequent culprit). Housing telecommunications equipment in a secure space above the flood line and supplying it with back-up power will also help keep tenants online.

A building can sink hundreds of thousands of dollars into an app, but without reliable WiFi and cellular service to access its features, tenants will ignore your digital amenity. The most important foundational element is reliable cellular coverage. Mobile coverage is already a major issue in existing real estate, and as 5G rolls out, buildings that lack the necessary infrastructure to support its higher frequencies will see their coverage get even worse. Investing in an in-building system that provides strong mobile connectivity, such as a distributed antenna system (DAS), is the best way to ensure that tenants will be able to use an app throughout the building.

John Meko is Director of Engineering, North America for WiredScore.