Proptech Spies Opportunity in Public Transit Post-COVID
Among the challenges that New York City office landlords are confronting coming out of the pandemic is how to get workers to move back into the traditional workplace and out of their work-from-home cocoons.
For many, a subway system beset by chronic underfunding, a rise in crime, and a general fear of contagions makes the return to office especially problematic. Indeed, flooding during a July 8 thunderstorm that left some subway stations mucky messes only underscored the challenges the system faced irrespective of COVID.
However, these issues present an opportunity for property technology firms.
“Whether by subway, car, bus, anything that makes the commute itself more difficult or less attractive to workers will surely prolong the WFH situation and potentially increase these numbers further,” Gabrielle McMillan, CEO of Equiem, a tenant experience proptech platform, said in a statement to PropTech Insider.
She pointed to a recent New York Times article that stated around one-fifth of all office space in the city has no tenants, with one-third of its leases expiring in three years.
McMillan said that from the onset of buildings being shut down, Equiem saw an opportunity to use technology to aid landlords, first in creating Remote, a platform for landlords to communicate and provide valuable services to workers while they were at home. As buildings opened up again, it launched Return, which focused on making the entire journey from one’s home to one’s desk safe, secure and painless, including live transport updates and touchless entry.
Eventually, it launched Retain, an analytics dashboard that helps landlords identify “at-risk” tenants with low engagement, so that they can identify and mitigate their leasing risk before it becomes more serious. Designed specifically for building management and leasing teams, Retain gets leasing information for a building from the landlord and combines it with Equiem’s data from every time a tenant uses a company product, creating personalized tenant profiles and re-engagement campaigns that predict tenant choices and behaviors.
Chase Garbarino, co-founder and CEO of HqO, a Boston-based tenant experience platform that also operates in New York City, said that it is difficult to separate the commuter experience from the office worksite experience. In order to bridge the gap between WFH and the office, HqO’s tenant engagement digital platform for tenants’ mobile devices and desktop computers provides 24/7, on-demand access to programming, amenities and retail.
“When you drill into the tenant experience, the commute is a huge part of it,” said Garbarino. “Most say they want to be around the office and colleagues, ‘but it’s really the commute that bothers me.’”
As for his company’s value to landlords when COVID hit, Garbarino said he felt more needed than ever. “We went from a vitamin to a painkiller. From ‘nice to have’ to ‘need to have.'”
Even now, landlords “need us more to provide incentive to get people back,” he added. “We integrated with traffic solutions, parking garages,” including working with the landlord to provide discounts for parking as an incentive [for office workers] to come back.”
TransitScreen is a Washington, D.C.-based proptech company that is designed specifically to provide real-time transit information, including for New York City subways, buses and commuter lines, in building lobbies, on tenant amenity platforms, and on mobile devices.
Matt Caywood, CEO of TransitScreen, said that some of the company’s New York City landlord customers are concerned about getting people back into the office. “The No. 1 reason for that was often transit, especially the subway,” Caywood said.
In an effort to make COVID and post-COVID commuting easier and safer, TransitScreen’s digital screen software provides real-time crowding information for NYC buses, giving tenants a count of how many people are on a bus through data powered by the vehicle’s automatic, infrared passenger counter, said Caywood. For now, “subways are a little more of a challenge,” he said, adding that his company hopes to have such tech integrated into their platform in the future.
Crowding info is found on TransitScreen’s CityMotion app, which shows buses and Long Island Rail Road congestion on a scale of 1 (no crowding), 2 (some crowding) and 3 (crowded). With this data, commuters have the information they need to decide whether to take a crowded bus or commuter train, or to wait for one that offers better social distancing and a preferred seat.
Like all other TransitScreen products, CityMotion is free to use, as office and multifamily landlords or employers subscribe to the company’s commuter information products to improve their tenants’ commuting experience, retaining them to capture the property’s full value, he added.
“Currently, all of our users of CityMotion have access to this data, whether they’re using our standalone app or in our partner tenant experience apps,” said Caywood. “Hundreds of thousands of people view our products daily via apps, in apartment buildings, office buildings or other public spaces. We’re live in 50 cities in 10 countries, with New York City and Washington, D.C., being our top markets.”
TransitScreen works with a number of national proptech companies, including Equiem and HqO, to put their transit information on the transportation page of the tenant experience apps, Caywood added.
Using proptech for tenant attraction is growing more important than ever, even as COVID fades in some areas, Garbarino said. “I think landlords who are sophisticated about services they provide will win and win big, compared to those who think they can go back to the way they did it before: one size fits all.”
Landlords do recognize the usefulness of proptech when it comes to tenants’ employees confronting commutes.
Scott Rechler is chairman and chief executive of RXR Realty, a top New York landlord. He’s also a former member of the board of the Metropolitan Transportation Authority, the state agency that operates the subways.
“I think that there’s an expectation now from companies that buildings are going to have a higher level of package amenities and technology and tools to create better tenant engagement, employee engagement, better transparency,” said Rechler. “As to the capacity of the people in the building, interaction tools [are needed] to help monitor the new hybrid work environment, the new focus on health and wellness. So, I think COVID has accelerated a lot of the digital transformation products. COVID accelerated digital from nice-to-have to need-to-have if you’re a landlord today.”
Unsurprisingly, in an industry known for its optimism in the face of all market setbacks, Rechler believes that Manhattan office buildings will be 80 percent occupied “in the fourth quarter. I’m almost 100 percent certain.”
Rechler said he believes that any challenges posed by a problematic subway are surmountable in the near term, not the long. (The MTA declined to comment for this article.)
“When you hear the subways are at 50 percent [capacity], it’s not so discouraging when you think that offices are at about 20 percent,” Rechler said of present conditions, adding that what we are seeing now “are legacy circumstances that are not playing out in real time.”
“I’m hearing now from all of our clients that there’s not one of our tenants that doesn’t plan on being back into the workplace between now and sometime in the beginning of September.” That return will include some “hybrid model” of flexed office work and WFH, Rechler said, “but they’re all coming back.”
Philip Russo can be reached at firstname.lastname@example.org.