Forward-thinking ways to boost NOI
Minimizing costs and maximizing revenue are key to sustainable growth no matter what business you’re in. But in the world of CRE—where overhead is extremely high—this is doubly true: costs must be managed closely, and any opportunity to boost revenue should be explored.
Plus, with so many businesses embracing partial or fully remote working models, CRE leaders need to do everything they can to support their bottom line.
In this post, we share six different ways CRE firms can boost revenue and reduce costs in 2021 and beyond.
Part I: Three ways to boost revenue in CRE
Beyond straight rental income, there are plenty of opportunities to drive revenue that CRE firms may not have considered until now. The best part? Most come from simply taking a closer look at what your current tenants are asking for, then coming up with solutions to fill the gap.
1. Launch a Flex offering
Flexible workspaces have been on the rise for years, and in the wake of COVID-19 and the shift to working from home, the demand for more flexible office arrangements has only increased.
But beyond filling empty spaces in the short-term, Flex spaces are predicted to become a core element of commercial real estate for decades to come. With the growth of coworking space providers like WeWork and Knotel, more and more companies are demanding the same levels of flexibility within their existing buildings—not just as an alternative to their current leases, but as a complement to it in the form of “spillover” office spaces, rentable meeting rooms, conference spaces, and so on.
From a revenue generation perspective, reallocating some of your units to a Flex space model can create even more entry points for customers who may not be interested in a long-term lease (or an entire office space). They may simply be looking for a dedicated desk, private meeting room, or shared office space.
Plus, with a
Flex offering in your roster, you can create different tiers and
membership plans to generate additional revenue from the square footage
you already own. And with dynamic pricing (and other technologically
enabled strategies), you can find even more opportunities to drive
Recommended Reading → Going Flex: A Guide For CRE
2. Monetize your facilities and amenities
But flex is just one form of “monetized space,” so why stop there? Whether it’s a locker, fitness studio, or delivery service—tenants will appreciate having the facilities, amenities, and services they need and can pay for right inside the building.
But the exact types of amenities you’re able to offer (and monetize) are going to depend on plenty of factors. If the building is located downtown, for instance, you could offer bicycle storage. Or depending on your demographic, you could even set up a daycare directly in your building. The options are virtually limitless.
Not only can these ideas drive additional revenue on their own, they also have the potential to help attract and retain tenants with the convenience and value they offer. And with a smart web and mobile app like Lane, turning on booking and payments is a breeze.
3. Create a retail marketplace
Another key way to generate revenue is to launch an on-site marketplace that connects your retail tenants with your corporate tenants—and then take a small percentage of every transaction.
By facilitating food and beverage ordering and other types of retail (e.g. clothing, dry cleaning services, pharmacies, etc.) through a smart workplace app, you can build a thriving marketplace that goes well beyond coffee and lunch—supporting your retail tenants in the process.
It gets better. With a workplace experience app that your tenants routinely use, you can also generate revenue by monetizing user attention. By creating a high-reach, high-engagement social platform, in other words, you can sell in-app advertising space to on-site and nearby retailers.
Part II: Three ways to reduce costs in CRE
In the world of commercial real estate, trying to reduce costs can feel like a constant battle. In this section, we look at three approaches that might just give you a leg up.
4. Retire costly legacy platforms and software subscriptions
Older property management technologies are giving way to all-in-one cloud-based SaaS solutions—and for good reason.
Instead of paying for dozens of separate tools to handle individual tasks like room bookings, building communications, tenant surveys, web portals, etc., one of the best ways to reduce costs is by investing in a single technology that can tackle it all.
By switching to a platform that can help you with virtually all aspects of tenant and workplace management—room bookings, surveys, communications, and more—you’ll be able to cancel plenty of the costly single-use tools that’ve been tacked on over the years.
If you go with an all-in-one tool like Lane, for example, you’ll get a room booking system, an event management platform, a multi-channel communications tool, a tenant feedback tool, and more core tenant management functionality—all rolled into one platform.
5. Save hundreds of hours through integrated, automated, and self-serve technology
Beyond the direct cost benefits of an all-in-one SaaS platform for property and tenant management, there is also an indirect benefit—namely, the hundreds of hours you stand to save. But for this, your workplace technology needs to have powerful automation and self-serve functionality. Let’s start with the idea of self-serve.
In addition to the obvious benefits it can bring from a tenant experience perspective, self-serve functionality (for activities like booking rooms, registering guests, and signing forms) can dramatically reduce the administrative load placed on your property management staff. By putting the workplace “in the palm of your tenant’s hands,” you improve the tenant experience while freeing up your staff to focus on higher-impact work—that’s two birds with one stone.
Self-serve functionality aside, automation is an even more effective way to shave time off of your property management workload. In short, automation functionality allows property managers to set up “chain reactions” notifying the right people about the right information at the right time—turning manual phone calls and emails into something that happens, well, automatically. If a tenant books your building’s fitness studio from their phone, for instance, it can notify the relevant property manager (or managers) via text, email, or push notification. Same goes with modifications, cancellations, and just about anything else.
Last but not least, if your workplace technology offers an integrated, all-in-one command center, your property team will spend less time signing in and out of various tools and learning how to operate each one.
“By putting the workplace “in the palm of your tenant’s hands,”
you improve the tenant experience while freeing up your staff to focus
on higher-impact work—that’s two birds with one stone.”
6. Leverage behavioral data to drive tenant retention and boost ROI
Finally, there’s data. In a nutshell, behavioral data helps you understand what is and isn’t working at your buildings and allows you to use that information to optimize your investment.
Whether it’s to measure the popularity of your physical amenities or the success of a tenant engagement tactic like a promotion or event, proper data and analytics allow you to make smart decisions, refine your programming, and save money in the long run.
If you’re investing into an amenity that’s getting near-zero utilization from your tenants, for instance, you may want to consider promoting it more aggressively—or, failing that, swapping it out and investing in something that will engage your tenants more effectively. Not a yoga crowd? Try a small conference room. Perhaps you’ll find it’s so popular you can even monetize it via a smart web and mobile booking platform (see #1).
In short, data shows you what your tenants like and what they don’t, so that you can drive retention and get the most out of your investment in the long run.
Finding ways to maximize revenue and reduce costs are always going to be at the core of every CRE firm. But as we hope to have shown, a strong workplace experience platform can help your bottom line across the board.
If you’re still using fragmented, outdated, and manual processes to manage your workplace, it’s time to upgrade your setup. We can think of at least six reasons why.
Reach out to the Lane team today for a product demo or to find out how an all-in-one workplace experience platform can help you boost revenue and reduce costs long-term.
Here’s to the future of work.