Data Privacy May Be Landlords’ Next Big Challenge
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Real estate companies are still grappling with how to use data to make their businesses and buildings more efficient, smarter and cheaper. But as they push forward into the technological age, the ethical and privacy challenges around gathering data will follow.
“We don’t want to be Big Brother and scare off those tenants. But at the same time, we want to prove to them the value we can provide them by collecting their data,” Brookfield Vice President of Asset Management Kent Tarrach said. “We are starting to implement these systems where we have the ability to collect this data … So there’s a balancing act there. And I’ll be the first to say that Brookfield has not figured out where that is.”
Brookfield is in the process of formulating a data policy now that the firm is collecting more personal data, Tarrach said at Convene and Honest Buildings’ Catalyst conference Friday.
Washington REIT Director of Project Management Services Philip Storch said his company is now working to formulate ways to protect personal data, too.
“Just putting out a PDF … on the internet, if it has a small mom-and-pop group, their guarantor, there’s information on that lease that shouldn’t be out there,” Storch said. "And there’s all sorts of different software that can mine just what might be an image for info.”
Brookfield and Washington REIT are in the minority, said Melissa Marsh, the founder and executive director of Plastarc, a real estate strategy firm. Few firms are creating procedures and policies to protect data.
“I think the real estate industry is relatively immature on this topic, and so there’s a lot of work to be done,” said Marsh, noting the Facebook Cambridge Analytica data scandal has heightened awareness of the issue.
“I don’t think most landlords, certainly the smaller ones that aren’t as digitized, would have much of any policy at all,” she said.
Gathering data about tenant and employee behavior can be used to make buildings more energy efficient, for example, bringing down costs. Construction companies are also now looking to leverage big data to create more innovative workplaces.
Mall landlords are tracking customers to figure out how to better design buildings and to advertise more effectively. Earlier this month, workspace provider Convene acquired Beco, a company that tracks workplace activity and then compiles the data and analyzes it.
The investment, Convene said, will help the firm create better, more efficient workplaces. Marsh said personal information has become a currency.
“At the end of the day, when the product makes your experience better, when it makes your building better, then the tenant or the individual will be willing to pay that price,” she said. “It really is just matter of having a lot more understanding across our industry of what those implications are.”