By Corey Metzman, director of partnerships and business development at Latch. First published on Multi-Housing News.
A few months ago, I hosted a small gathering at my apartment. A friend offered to serve as DJ, which required pairing her phone with my speaker. Then last week, Taylor Swift’s latest hit unexpectedly started blaring as I was getting ready for bed. I later discovered that this same friend had just walked by on the street, and her phone had inadvertently connected to my speaker.
While we both had a good laugh, this seemingly harmless mishap raises broader questions about connected devices. For instance, what if the device in question had been a smart home hub unifying all of my devices like lights, thermostat, and door locks?
Mishaps like this become even more alarming when you consider that many of these devices―designed for individual consumers in individual homes―are now being installed as permanent fixtures in multifamily properties despite not being designed for the complexity of multifamily environments.
Since many multifamily developers utilize these technologies within their own home, it’s understandable that they may use that same consumer mindset when approaching decisions of whether or not to deploy them in their portfolios. But there are fundamental differences between smart technologies designed for consumers and those designed for the nuances of multifamily. Developers must understand these nuances before making investment decisions. To help them, here are a few features that enterprise-optimized technologies should have that consumer technologies often do not.
Enterprise-optimized devices―deployed as a fleet as opposed to a single device―can be most effective when connected to a centralized management tool, giving management a single destination from which to monitor and control all devices throughout a property.
One feature of such a management tool should be the ability to quickly add a user to a device or even grant temporary control over a device, like a thermostat in a common area. Ideally, these user permissions can be given from a smartphone so that on-the-go property managers can remain responsive to their residents even if away from a computer.
The presence of technologies in communal areas like game rooms or gyms requires unique treatment, including appropriately permissioned and tiered privileges. For instance, control over critical settings should be limited to certain credentialed users, like property managers.
Centralized Management with Tiered User Control
The reality of resident turnover means that technologies may well stay with an apartment even as the residents change over lease cycles. Accordingly, technologies in apartments must have clear on-boarding and off-boarding processes for residents. Otherwise, operators run the risk that a former resident could inadvertently retain operating privileges to devices located in an old apartment. Or worse, a former resident could still have the ability to view usage events of the device, particularly if the device in question can be accessed remotely.
Optimized for Turnover
Though they are increasing in popularity, a small percentage of multifamily buildings have building-wide wireless internet consistently available throughout the property. Thus, any technologies that perform mission-critical functions―like compliance, access, fire, and safety―should be designed to be still fully operational while offline, even if they have add-on features that can be enabled via a persistent network connection. Other devices that are not “mission-critical” may appropriately depend on a continuous network connection for basic functionality. For instance, a WiFi outage would have very different consequences for a non-responsive smart home assistant versus a smart lock dependent on consistent connectivity.
Offline Functionality for Mission-Critical Services
Consumer hardware technologies risk having short shelf lives or becoming outdated if their in-built software cannot be updated to stay current with the latest technology and use cases. While consumers may choose to update certain technologies every year or two, multifamily developers can’t afford to constantly replace hardware technologies every few years. Thus, enterprise-first devices need to avoid relying on hardware that risks growing stale, and instead should allow for periodic software or firmware updates to maintain relevance for modern living.
Lastly, but perhaps most important from a financial perspective, the leading enterprise technologies generate both direct and indirect value for developers. Direct value means either that the devices generate substantial operational savings―like energy savings from a smart thermostat or unattended leasing capabilities facilitated by smart access systems―or allow properties to command higher rents or amenity fees. Indirect value means that the devices enable other, non-traditional sources of revenue to be layered on top of the infrastructure created by those devices.
Some of the most promising revenue sources are service-based amenities, like pet care, home cleaning, grocery delivery, doorstep trash collection, or concierge package services. “When Brookfield considers partnering with an emerging real estate technology platform, a key criterion for us is that the offering help us enhance our operating platform in one way or another―be it through efficiency gains or an improvement in consumer experience,” says Matt Smith, managing director of Multifamily Portfolio Management at Brookfield. “Not only do we want the investment to gain value over time, we want the platform to add value to our business.”
In the end, enterprise-first technologies that have these features will be worthwhile investments in multifamily properties. These features, however, are frequently absent in many consumer technologies to which we’ve become accustomed to using in our own homes. So, it’s important that developers evaluate these investments through an enterprise-first prism, in addition to viewpoints informed by consumer experiences. Otherwise, they may open the door to risks far greater than an unexpected Taylor Swift song.
Revenue Generating Potential
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