Why Property Managers Have Panic In Their Eyes

Outro artigo interessante de http://www.forbes.com!

 

Gene Marks Gene Marks, Contributor

I write about the business of technology

10/24/2011 @ 7:10AM |9,377 views

Why Property Managers Have Panic In Their Eyes

CHICAGO - JULY 08:  Office space is advertised...Image by Getty Images via @daylife

A few months ago I spoke to a group of commercial building owners and property managers.  And there was panic in their eyes.

It had nothing to do with the rainy weather that was forecast for the afternoon’s golf tournament.  Or that the evening’s open bar would only be beer and wine.  It was something else.

We spoke about the economy.  The slow growth of GDP.  The potential rise in interest rates and inflation.  The challenges that the Fed faced.  The budget battles in Washington and the tax increases which are headed our way.  All of these topics concerned them.  But it did not panic them.  They listened obediently, sipping their iced teas and trying not to fall asleep.

That is until I got to that one specific thing that really caught their attention:  cloud computing…and how it will affect their industry.  As we together discussed this trend, and the related technologies that it affects, I noticed the participants began to wake up.  They sat straighter in their chairs.  They began to squirm.  And they started to ask questions. A lot of questions.  And I saw the panic in their eyes.

That is exactly what I mean.

Last week Bloomberg Business Week reported a slowdown in the demand for office space.  “What we’re seeing is apprehension in terms of taking action, and I think that that’s a reflection of volatility in the global economy,” Maria Sicola, executive managing director of research for the Americas at Cushman, said in a telephone interview from Portland, Oregon. “That’s really translating itself into the halting of decision-making.”

I think it’s a lot more than that.

The good news is that office vacancies are declining from their peak of 16.8% during the recession.  The bad news is that it’ll be a long, long time before this rate (ever) reaches what it was back in the early 2000’s.  Don’t believe me?  Take a look at just how low office vacancies were at the beginning of that decade compared to now.

Of course, a big factor here is people.  And the slow economy.  With unemployment hovering at 9.2% there are less butts in office chairs, and more butts at home watching Judge Judy.   But there’s something else going on.  I keep visiting clients who have cut back staff.  Walking to their conference rooms, they take me through large swaths of empty spaces of uninhabited floors where cubes once filled with busy people used to be.  And then we sit down to discuss their business and I find out that business is…up? Profits are steady.  Cash has increased.

When the economy returns, will those butts be there to fill those cubicles?  I don’t think they will.  Business people aren’t so anxious to hire people.  Particularly when they’re getting the same (if not more) stuff done with less people  And as this trend continues,  what will happen when it’s time for these companies to renew their leases?  You guessed it.  And that’s what panicking the property managers.  You can see it in their eyes.

Because it’s not just the slow economy and high unemployment that will affect office vacancies going forward.  Technology has impacted real estate.  Permanently.

For example, there’s the technology of outsourcing.  Need someone to do marketing?  Or a bookkeeper?  How about a customer service rep?  Or an inside sales person?  Back in the early 2000’s you were taking an ad out in the paper, or online at Monster.com.  You needed to justify the expense of hiring that person full time.  What other choice did you have?

But not today.  Today you can go to Elance, Guru, oDesk, Freelancer or any other of the dozens of sites that do nothing more than provide communities of experts that do outsourced technical work from all parts of the world.  You can post your jobs and ask people to bid on them.  You can look up a potential person’s background, check on the other jobs they’ve done, see what comments were written about them.  And you don’t even have to pay them until the work is done – just put the money up in escrow and release it when you’re satisfied.  Why hire full time people when tools like these exist to find the exact people to do the exact task you need them to do?

What really made the property and building managers squirm were the cloud-based tools that enable us to do this.  Because once we find that person we really don’t care where they’re located.

If they need access to our systems or networks we just provide them with a remote desktop connection to our server.  Because today just about everyone has a way to access their internal systems through the cloud.  Or, as a growing number of my clients are doing, we let our outsourced cloud infrastructure providers, who are hosting all of our applications and databases, worry about connecting these remote people.  If we need to discuss projects with them face to face we connect using video tools like Skype and Oovoo.  If we need to host meetings with groups of people we use tools like GoToMeeting.  We share our documents, spreadsheets and data with them using hosted services like Google Docs, Office 365 and DropBox.  Or we manage our projects with applications like BaseCamp and Zoho.

Back in the day I would walk into a client’s office and be shown large, refrigerated computer rooms where servers and phone systems were housed and watched over by teams of IT guys in blue jeans and Black Sabbath concert t-shirts.  Today those rooms (and the space needed for those rooms) are gone.  For those companies with servers in-house they’ve virtualized them down to one or two machines tucked away under an administrator’s desk.  And for the growing number of companies who have outsourced it all to their provider in the cloud they’re using this excess space for indoor street hockey until their lease runs out, with no intention of renewing.  And those IT guys?  They never seem to go away.  Just like Ozzie.

Reception areas have become virtualized too.  Particularly because of the popularity of hosted phone systems.  Most communication providers offer Voice Over IP phone systems nowadays where employees (and non-employees) can be connected into a company’s phone system no matter where they are.  And firms like VirtualPBX and Grasshopper host entire phone systems (like mine) for close to $10 per month per user.  That way my receptionist can be working from her home in Cleveland even when a phone call is made to my “office” in Philadelphia.  It gets bounced to her phone and she’s able to redirect the call to the right extension.

That is assuming that a receptionist is even needed any more.   We’re all so used to automated systems where we choose the extension or search through a directory for the employee or department we need and are then bounced to the right person.  That person also can be somewhere other than an office.  In fact more times than not he’s not even in the office – he’s on his mobile phone or at some other location.

Building and property managers aren’t happy about this.  But staffing firms are loving it.

Take Harold M. Messmer, Jr. – Chairman and CEO  of Robert Half International.  Tomorrow they’ll be releasing their third quarter results.  Keep an eye on that.  Because if these results are anything like the second quarter Mr. Messmer will be having a very thankful Thanksgiving.

That’s because in the second quarter Robert Half’s revenues were up 22% from one year ago. “This has been among the fastest post-downturn recoveries we have seen in our business.” Said (I’m assuming a very gleeful) Mr. Messmer. “This last recession was deeper than past ones in our history, but revenues have grown faster than in periods following other downturns.   Notwithstanding the disappointing job report for June, we saw higher demand for our professional staffing services in the United States throughout the second quarter.

Unemployment’s high.  And we’re in a slow, slow economy.  It hasn’t been a great time to be in the property management business.  Unfortunately for those guys, technology isn’t going to make it any easier for them to fill that glut in the future.  Do you see the panic in their eyes?  I do.

Besides Forbes, Gene Marks writes weekly for The New York Times and frequently for The Huffington Post and American City Business Journals. He runs a ten person consulting firm outside of Philadelphia and can be followed on Twitter.

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