Ask any successful commercial real estate management company what industry they’re in, and chances are they’ll say “service.”
Indeed, in an age when customer service has become king, value in real estate is based more on the strength of a building’s customer relationships than on the strength of its girders.
How did commercial real estate arrive at such an important conclusion, and perhaps even more importantly, how are some of the nation’s leading management companies carrying out a task that can be as difficult to perfect as it can be to measure?
Oliver Carr, president and CEO of Carr Properties, points to the economic downturn of mid-2008 as the catalyst for change in terms of tenant utilization of office space and the relationship with the landlord.
“Tenants have always been king within Carr Properties,” Carr says, “but when the global economy crashed in 2008, firms literally across the board started upping their game. Everyone was forced to do more with less—time, expense containment, collecting rent, negotiating rent payment programs. The downturn stimulated a great deal of dialogue between landlords and tenants; almost overnight, many businesses went from a growth model to one of ‘staying alive.’ Customer satisfaction became even more focused on improved operating efficiencies, reduced operating expenses and positioning the properties to provide optimum workplace efficiency and productivity for tenants. It was a shift in thinking for many.”
At Brookfield Office Properties, Dan Kindbergh, senior vice president of U.S. Operations, agreed that helping tenants with their bottom line was a key strategy when the recession hit, with Brookfield focusing primarily on energy and sustainability.
“Meeting basic customer needs is of course always important,” he says, “but in an economic downturn like this, we needed to help tenants better manage their bottom lines. We installed new, sub-metering systems that give our customers the ability to gauge and control their own energy usage. They can go online and look at live data, customize their usage, and truly manage one of the biggest portions of their expenses.”
The economic downturn, with its accompanying rising unemployment, also resulted in an over-supply of office space, which led to a tenant-driven market.
“A tenant’s market, if anything, raised sensitivity—across the entire company in all divisions—to the importance of customer service,” explains Kathy Barnes, senior vice president for Akridge. “Knowing that people have choices in terms of renting space makes all of us better listeners, and influences change as we re-evaluate our policies and procedures to make sure they’re meeting the needs of our clients. Customer service also translates into client retention, which has a direct impact on the profitability of any office building.”
Another critical change of recent years—independent of the economy but perhaps as influential—is a change in the customer.
“It’s not just a question of how the market is changing,” notes Marla Maloney, executive managing director for Cassidy Turley. “We also need to ask, ‘How is the customer changing?’ The generation of workers coming out of graduate school today has very different communication preferences. Keep in mind, communication is a critical part of customer service. These new executives are accustomed to working virtually anywhere, so relationships via virtual technology are important. Tenant portals have to be available, and we have to know how our tenants prefer to be contacted. Surveys show satisfied tenants are twice as likely to renew their current space if their contact preferences are met and management responds within 24 hours. It’s that important.”
Customer Service Today
Okay, so customer service is important. But we knew that, didn’t we? Nordstrom’s built its brand on it, and with today’s social media, it’s easier than ever to showcase—or castigate—an organization’s customer service. So how exactly are leading property management companies making sure their customer service is up to snuff? What strategies do they employ, and how do they know they’re meeting—and exceeding—expectations?
At Akridge, a service philosophy has been at the company’s core since its founding 38 years ago, with communications and The Golden Rule—treating others as you wish to be treated—its underpinning. Neither cost a penny, which is particularly important for smaller firms competing against global giants, and the focus-on-service attitude is so pervasive that Akridge employees are trained ‘The answer is yes, now what’s the question?’
“We feel that you can defuse 95 percent of problems through communications,” Barnes points out. “Realistically there are times when we have to say ‘no,’ but by putting ourselves in the recipient’s shoes first and thinking about The Golden Rule, we can do it in a way that’s not hurtful or unsatisfying.”
The approach works: The company’s annual tenant survey, which they’ve been running for more than 30 years, most recently had a 91 percent response rate and, once again, showed the company consistently outperforming local and national markets in every department.
Cassidy Turley also recognizes that service industries have to differentiate themselves by their people, views all prospective employees through a customer service lens.
“We look for graduates who can demonstrate that they can work effectively in teams and can take on a CEO-like mentality when it comes to property management,” Maloney says. “They need to have a sense of urgency when it comes to meeting clients’ needs. I can teach real estate, but instilling a ‘fire in their belly’ outlook is something that can’t be taught. If a tenant calls to say a light is out and they have a prospect coming at 9:00, I need to hear from my candidate that the bulb would be replaced by 8:00. We have a very selective hiring process. Once hired, we tie compensation to good service.”
Ongoing training is also important, and Brookfield focuses a great deal of resources on staff development, with regular coursework and brownbag lunches designed to help colleagues share challenges, talk about how they handled it, practice role playing, and discuss other ways of handling similar issues. By regularly getting its staff together, Brookfield capitalizes on the benefits that sharing best practices can have on everyone, ranging from the newest hire to the most senior staff member.
With diverse portfolios of properties, tenants and locations comes, of course, diverse needs, making customized tenant relations programs a big factor for D.C.-based Carr Properties.
“We spend a lot of time listening when we approach our tenants,” Carr says, “The General Services Administration (GSA) and some corporate tenants, for example, are downsizing their space requirements by reducing office/workspace size and eliminating conventional conference rooms, so we’re providing far more common area conference space and collaboration lounges than were needed in the past. Food provisions, fitness centers, virtual concierge services and other customized features designed to compliment today’s reduction in office space requirements are also playing a growing role.”
Service Providers—Do they Share the Same Goals?
For many tenants, it’s the service providers who make the biggest impression. While tenant staff may not even remember the name of the company managing their building, they very well could know the first name of the woman who comes in to water the plants or would recognize a new face among the evening cleaning crew.
What Tenants Want
Great customer service depends on knowing what customers need, and all successful companies know that when it comes to understanding tenants’ unique needs and concerns, the simple act of listening is at the root of any good plan. Here’s what D.C.-based Carr Properties has heard are the top priorities for its tenants:
- Proactive communication delivered electronically, by phone and personally.
- Consistent climate control and cleanliness from every perspective.
- Professional and timely delivered service response from engineering, management and leasing representatives.
- No surprises.
- A building and landlord with an energy efficient, sustainability driven culture.
- A collaborative attitude with a common goal of maximizing the productivity within their workplace environment.
Source: Oliver Carr, president and CEO, Carr Properties
Obviously, making sure service providers are offering the same outstanding service your company prides itself on—and including them in your tenant surveys—should be a standard part of any organization’s customer service plan.
But you should also bid out services regularly to ensure that you’re aware of what other providers in the market are offering. Encourage managers across your portfolio to talk regularly so that they can discuss challenges with contractors or even share what they’ve heard on the rumor mill. Remember that cheaper isn’t necessarily better, but don’t be afraid to leverage yourself in today’s competitive landscape. And if you’re not already, start including service providers in your regular meetings: At Carr, their janitorial firms, building access control system monitoring firms and security firms attend each of the company’s quarterly tenant feedback meetings. And if a major repair or capital improvement project is being planned, Carr always includes the general contractor and major sub-contractor, as well.
Akridge also throws an annual Service Partner Appreciation Day, when everyone from the president of the service partner company to the individual who actually provides the contracted services are invited to an afternoon party and treated to lunch, an open bar and door prizes ranging from TVs to gift certificates to local restaurants to iPads. With 300 to 400 people regularly turning out for the event, Barnes admits it’s one of her favorite days of the year.
“My face hurts from smiling when it’s over,” she says. “It’s just a feel good day, and it’s such a great way to recognize our partnerships. I know that if it’s 3:00 a.m. and I call them, they’ll pick up the phone and come to us.”
The Importance of Feedback
No customer service program is complete without a feedback mechanism, and measuring the effectiveness of an organization’s program is crucial to being able to perfect what’s working and adjust what’s not.
Regularly scheduled third-party tenant satisfaction surveys are an obvious source of information, but more frequent, internal checks are equally important. Does your organization, for example, have a follow-up mechanism for web-based service requests, ensuring not only that the requested service was performed but also that it was performed to satisfaction?
How regularly do your property managers meet with tenants on a formal basis? Do they also make it a point to be in the lobby during morning and afternoon rush periods, making themselves available for comments that may never make it into a formal service meeting? Do they wear nametags so that tenants know who they are? And how often do you ask your property managers about their tenants as people? If they don’t know their names or who’s on vacation and who’s not, they’re not circulating enough.
“Day to day,” Maloney explains, “We rely on knowing our tenants well, and talking to them often. Our conversations aren’t all about the problems or how well we fixed something … it’s about what they do for fun, what their children are up to … It’s about building relationships and showing you care. The better they know you, the more easily they can thank you when service is good and challenge you when the solution isn’t appropriate. And that’s how we exceed expectations.”
