So far in the series, we've considered the nature of the decisions to retrofit a building and how companies go about deciding to allocate the time or resources required to go through a retrofit project. What we haven't talked about yet is the elements of a good solution for retrofitting. Every building in multifamily is unique and has a unique market position and building characteristics.
The final piece of the retrofitting jigsaw puzzle is figuring out which partner is the best fit for the project. We'll try to answer this question in three different ways. First, we consider the nature of the objectives of the retrofit—both revenue and efficiency—and the product features needed to deliver them. Next, we will turn to the implementation strategy and how that impacts the choice of product. Finally, we examine the question of the support structure and how to choose one that fits the project.
The first thing to think about when we look at a potential smart building retrofit product is the nature of the technology itself, as not all systems work in the same way. An important first step is to think about the specifics of the prospect and resident experiences that the retrofit is intended to deliver. The priorities in customer experience go a long way to determining the combination of hardware and software that will be the best fit.
Many companies underwrite smart building technology projects based on revenue increases that result from a combination of more rent and more leases. Competition for amenities like access control is already intense in some markets, and the intensity of competition will increase as the technology becomes more widespread. So the quality of the experience will differentiate competitors and be a factor in how successful the community is in achieving the revenue upside.
Aesthetics and user-friendliness are two highly visible product characteristics that affect prospect and resident experiences. The visible parts of the system (locks, readers, intercoms) should look good. The experience of using them should be as frictionless as possible. The market will probably favor access systems where unit and building access are part of a single, seamless process, solving the whole access problem through a single app.
Finally, with digitally native renters forming a bigger part of the market, the quality of the mobile experience comes to the fore. There are two obvious areas of functionality to look out for here: the mobile app experience and the way that the technology integrates into mobile platforms like iOS. Operators assessing retrofit vendors should pay attention to both the utilization of their app and—more broadly—the company's mobile vision.
Revenue increases are not the only way to underwrite a smart building retrofit. As discussed in a previous post, operational benefits are often the main driver of investment decisions. To make the right decision, operators must think clearly about which operational problems they are trying to solve and which product is best-equipped to solve them.
Properties seeking to automate functions like guest management and streamline the move-in process should prioritize the quality of the functionality that enables those processes. Ideally, the software should allow the operator to "construct" the entire building, create users and rules before a single lock is fitted. That way, as soon as physical locks go on doors, the operational benefits are instantly available.
Some retrofits offer the opportunity for a community to consolidate onto a single system. Where the project moves the community from two systems to one, the new platform must be architected as a total access solution. Not all access control systems work this way—in fact, most systems treat building access as an add-on to a system created primarily for unit access. Any shortfall in simplicity and seamlessness of integration will cost operational efficiency.
With retrofit projects, it's usually highly desirable to determine the simplest step that gets the community to benefits as quickly as possible. Remember, once an IoT technology is in place, you can always build on the platform. It makes sense to look for the most frictionless first step.
In many cases, a big consideration is whether or not a building has appropriate WiFi coverage to support a building-wide IoT implementation. In this case, the clear advantage is with locks that do not require internet access. This feature of product architecture is useful not only for speed of implementation but also for the critical matter of security.
Security features take on an even higher degree of importance in a retrofit than in a new build, as residents are involved. The most frequent concerns among residents are usually about security, so the extent to which the devices and software mitigate security risks is critical. One often-overlooked variable is that some smart building technologies are architected to be online 100 percent of the time, and some are not.
Technologies that require internet connectivity to authenticate access codes in real-time need to be online 24/7. That represents its own security risk, as the locks can also be hacked. At Latch, we feel strongly that it should not be a requirement that the lock be online at all times. Instead, it should be possible to open a lock and control access without any need for online authentication. This approach is quite different from the way that most companies handle access control, but it constitutes an important security advantage.
Earlier, we mentioned how the quality of experience will be the differentiator in a market where most properties have access control. It will also determine how easy or hard it is to continue to support your technology in a changing world. The market for smart locks is vast, with many different devices available. But some will integrate more effectively with the software that controls them, and that has important implications for support.
It's a similar scenario to iOS/Apple and Android. Apple's tightly-curated software and hardware environment enables a higher level of support and design. The same is true of smart building technology. The greater the extent to which the software optimizes the device and vice-versa, the more options exist to fix problems (e.g., through firmware updates) that may arise in the future.
Finally, there is the all-important people aspect of the retrofit project. In the previous post in this series, we talked about the need for a plan to manage residents through the process. During implementation, a project team must schedule both residents and installation professionals. Each missed appointment has a waterfall effect on the timing of the rest of the project.
It's vital to understand how the partner sets up its project teams and plans every aspect of implementation. Look out for a high degree of coordination, a single point of contact for project issues, and a strong service culture. The team you choose to partner with must have the experience and people skills to run the project and support your business afterward.
Above all, when assessing IoT technologies and partners, you should never forget that systems do not all work in the same way. There are profound architectural differences between products that can make or break an operator's ability to achieve financial benefits. Similarly, culture matters, and with retrofit projects, communication is top priority, where it is scarcely a factor in new build projects. The experience level, the support philosophy, and the quality of the team and their technology are the factors that should determine who gets to help you transform your property.
Learn more about retrofitting with Latch.
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