Interview: How COVID-19 Put A Rocket Under Oxford Properties’ Plans For Change
In February, Bisnow sat down with Dean Hopkins, newly installed chief operations officer of Oxford Properties, on the 29th floor of the Cheesegrater skyscraper in the City of London, to talk about how the company planned to overhaul the way it runs its business. Since then, things have changed pretty fast. And the time frame for that overhaul has accelerated faster than Hopkins could have anticipated.
“It might have taken us and our colleagues in the industry three to five years to believe in and implement that digital transformation, but it’s happening now,” he said in an interview about the impact of the coronavirus on tech adoption and changed working processes, this time on a video call from his home in Toronto. “One of the silver linings is this is the best change story imaginable.”
Hopkins, whose background is in tech rather than real estate, was brought in to help Oxford, the Canadian pension fund with $45B of property assets under management, change its processes and adopt technology, so it could double those assets in the next seven years, deploying capital intelligently, efficiently and quickly without hiring a huge number of new staff.
Hopkins outlined where the way Oxford works has changed rapidly in the past few months or where the uptake of digital tools has been accelerated, as well as where tech adoption has been slower than anticipated or where real estate needs to catch up to other sectors.
“The analytics we have about our customers as they are dealing with the pandemic is giving our asset managers the ability to have meaningful conversations with them about how to weather the storm,” Hopkins said about the specifics of how digital technology has helped Oxford during the downturn.
The company uses software platforms including VTS to manage data about its tenant base.
“It informs the conversation about how we deal with requests for rent relief,” he said. “Before it might have taken us years to pull together all of the information we needed, but we turned to our digital tools and gave the information our assets managers needed to make decisions in 11 days. I talked to some of our colleagues in the industry who are still using spreadsheets, and when they are taking decisions on this they are essentially still just putting their finger in the air.”
Bringing people together …
In February, Hopkins outlined how Oxford wanted to become a more integrated company globally, with teams in different countries collaborating on projects and sharing information. While the inability to have team collaboration in an office environment has been a hindrance in some ways, the rapid adoption of technology like videoconferencing has made the world a smaller place.
“It is now just as easy to find a colleague in the U.S. or UK or Vancouver as it is to walk down the hall and speak to someone in Toronto,” he said. “We are working digitally and we are working globally, and we are solving problems as a group. It has really moved the needle. We’ve had four big digital transformation projects on the go during COVID, and we’ve really used the time to advance our capabilities.”
… And keeping people apart
Clearly social distancing and lockdown regulation around the world have put a brake on many of the processes in real estate that used to happen face-to-face, such as building tours for potential tenants. Hopkins points to tools like Matterport that are allowing tours to happen virtually and multiple online leasing “marketplaces” that are allowing leasing deals to be transacted digitally.
“There’s been a real explosion of these kinds of marketplaces,” he said. “A lot of this was already happening in the residential market, and now we are seeing it come to the commercial sector.”
Is it what you do or the way you do it?
Hopkins said one consequence of staff at real estate companies like Oxford being forced to work remotely should be a major change in the way the sector views the productivity of its workers.
Rather than focusing on how people go about getting things done, like how much time they spend in the office or many meetings they have, it will be about results.
“The most efficient companies will be those that focus on outputs and outcomes, and train managers to do that,” he said. “When you’re all in the office working elbow to elbow, everyone just pitches in. When you’re working remotely, you have to rigorously define and measure what outputs you are looking for. I don’t care how many meetings you had, how many tours did you book and convert into leases? How many deals did you model?”
Sensors are still a sensitive subject
One area where Hopkins has not seen the advances that might be expected is in the world of sensors and their impact on building management.
“There has been a massive explosion in the marketing of healthy buildings, and sensor analytics solutions to measure that — I get marketed something new every day,” he said. “My guess is that people saw a huge opportunity, but there hasn’t been the uptake you might have expected. I think people have underestimated the challenge of deploying these systems into the complicated ecosystem of an existing building. The technology can be fragile and every building is different, so problems remain.”
What the sector still needs: data, data, data
There has been an explosion of new data providers in recent years in the real estate sector — but it still isn’t enough, according to Hopkins.
“There is a thirst for data in the desert,” he said. “There are still big swathes of data that don’t exist, or are difficult to find, that you would want if you were looking at value creation opportunities: When was a building upgraded, how good is the roof, what the zoning status is, even who the tenants are and what rent they pay. It is still a challenge for the industry to provide the information about the value of an asset that in other asset classes would be clear.”