Hi-Tech Maintenance? The Internet as a Management Tool

Hi-Tech Maintenance?

In the autumn of 1999 a hot concept in property management emerged: Why not use the Internet to streamline the management process? By the spring of 2000 three Web sites had launched, each with a different vision and approach but sharing the same goal, to enhance communications between shareholders, managers and maintenance staff. AKAM Associate’s Genesis System, Insignia Financial Group’s EdificeRex, and BuildingLink.com were the pioneers on the digital frontier. How are they faring one year later? Who’s using the systems? And what are the newest developments?

All three of these Web sites provide similar features to shareholders, managers and maintenance staff. These include internal posting of memos, the ability to print out documents such as permission to sublet, and the most utilized application–the online repair request. What varies greatly is the presentation and accessibility.

Edifice Wrecked?

Of the three Web sites, Edificerex.com, the creation of Insignia Financial Group along with several other management companies was perhaps the most ambitious and well publicized. The site was designed to create a community for residents of luxury buildings, was always planned as revenue-creating and featured advertising. It featured a private area accessible only to residents of buildings managed by Insignia and its partners, as well as a public area offering guides to restaurants and services, calendars of charitable events and an online magazine about upscale living. Over 300 buildings are utilizing at least some part of the service, from accessing account information online to messaging the doorman about expected deliveries. Early on, critics of the site suggested that the publicly available content was redundant to other sites on the Web, while the private functions were limited, and lost amid the media clutter.

"We found that people really like the real estate functionability," says Jeffrey Cohen, president of EdificeRex Holding Company. "Unfortunately the dreams of revenue opportunities have failed to materialize." On the debit side of the ledger, according to a March 1st release of fourth quarter earnings, Insignia Residential Group lost 18 million dollars in "impairment of Internet investments." These investments included Edifice Rex and several other Internet technology initiatives. In the press release Insignia chief executive officer Andrew Farkas is quoted, "Ultimately we decided to sell, merge, or in the event that we are unable to find suitable candidates, terminate the majority of our internally developed Internet-based businesses."

Miki Kagan, chief operating officer of EdificeRex.com sees the past year as successful even though the venture fell short of projections. "Two years ago, no-one e-mailed the super. In the past three months we received over 1,800 work orders over the system."

Kagan is also positive about the possible change of ownership. "We are primarily an Internet company and this is not the core focus of Insignia. They viewed EdificeRex as an investment. In the future, I believe we will be able to keep our real estate functionality but tie in with a company that focuses on creating content and selling advertising." EdificeRex is continuing to develop new features; in May, the service will be able to accept rent payments online through the ACH system.

An industry insider who asked to remain anonymous said, "They’re no better or worse than a hundred other people who have sexy ideas about attracting eyeballs. And I give them credit for having the guts and discipline to go into that many buildings and digitize them."

Let There Be Light

"We’ve had tremendous success with the Genesis System," says Leslie Kaminoff, chief executive officer of AKAM Associates Inc., a full-service property management company with offices in New York City and South Florida. "It was the next step in providing service, and we put the system in place so we could make life easier for our clients." The Genesis System is available at no extra charge to all of the buildings that AKAM manages. It has no advertising and accepts no outside clients. Access is through unit-specific passwords, which enable owners and tenants to view and print out building documents and applications, and communicate with each other, the maintenance staff and managers.

"A good 40 percent of our clients are using it and loving it," says Kaminoff. Considering only 50 percent of households have a computer, this is a high level of penetration. "Shareholders use it for information," says Kaminoff, "and they can know when they put in a repair request that it is automatically cc’d to the manager. The bulletin boards are used quite a bit as well."

Happy with the success of the Genesis System, AKAM Associates is moving forward with another Internet venture that has been in the planning stages for the last year. "AKAM Living Services will be a concierge service just for our buildings," reveals Kaminoff. "This is another value-added service for our clients, to make their lives easier." According to Kaminoff, for a minimal charge, clients will be able to access providers in a variety of categories from ordering flowers, to hiring a limousine, or booking house cleaners. "In every category we will have strategic partners who will have personnel and equipment committed to our business," says Kaminoff. "It’s a magnificent service." AKAM Living Services expects to launch in September.

The Community Link

Where Insignia and AKAM have provided Internet technology to their select buildings, one company is responsible for making it available to the masses. BuildingLink.com is a for-pay service available to any building that is interested in digitizing their internal communications. It launched in February 2000 with seven buildings and is now working in over 40. "This is a real platform for running a building on a day-to day basis," says Jerry Kastenbaum, BuildingLink.com chief executive officer. "It’s not just for people who love the Internet; it’s for people who love really efficient communications systems."

For a yearly fee of $5 per apartment, BuildingLink.com prides itself on providing the most comprehensive list of functions for residents, managers and maintenance staff. For example, shareholders may book amenities such as a party room or service elevator online. Managers can summon up repair requests by date, unit or building. As a new feature, superintendents can track supply inventory.

"Our goal is to become the industry standard," says Kastenbaum. He tells one story of when the technology proved very cost effective. "One of our client buildings had a fire. All the clean up and repair work was documented on BuildingLink. When it came time to make insurance claims, all the information was right there. And they were able to collect an extra $6,000 for labor and time."

Technology Embraced?

"This is a much more efficient way to communicate," says Silvana Vlacich, board treasurer of Byron House, a 133-unit co-op in Manhattan, and a client of BuildingLink.com. "I can communicate with the managing agent or super at 6 pm. And he has no excuse to say he didn’t get the message because it’s all right there in the system."

Vlacich is quick to sing the praises of the Internet tools. "I can go and look at what problems we’ve had and plan our budget for next year," she says. "And now I know what things cost. Before this, I didn’t have a clue."

Kaminoff also says that boards can save a lot of time and money using the Internet systems. "Boards can send communications back and forth to each other and to their manager and they don’t have to pay for stationery, postage, messengers, etcetera."

Kaminoff also feels that the new technology brings a higher level of professionalism and accountability to building-wide communications. "Transactions become purely professional," he suggests. "Phone calls often can wander. E-mails get right to the point.

"And the manager doesn’t get to shmooze through the problem," he jokes. "The work has to get done."

For some superintendents, both the technology and the higher levels of accountability can be a challenge. "I don’t think we’ve heard enough from the supers," says Dick Koral, founder and secretary of The Superintendents Club of New York. "Some of them love it, but for a lot of guys this is never-never land. The real cost of the programs is going to be training the men."

Vlacich says her super inputs all repair requests into his computer, even the ones he gets by hand. "That way he can verify his work."

The Maintenance Workers Union Local 32BJ is offering beginner and advanced training courses on many types of available software. The Union’s Thomas Shortman Training, Scholarship and Safety Fund also teaches the Internet programs using Building-Link.com. Any superintendent taking the courses is eligible to buy a computer for $395.

"I am personally convinced that in five years, the computer technology will be inexpensive and ubiquitous," says Koral. "There’s a cultural change that’s happening, and owners and workers that are reluctant to make a change will have to be educated."

"Realistically, only about 20 percent of people are availing themselves of the technology," says Kastenbaum. "If your building runs well, you’re not going to use it everyday."

"I believe that [Internet property management technology] is the wave of the future," says Kagan. "As more people get online access, more importantly, as more people get high-speed access, this is the way we are going to do business."

Ms. Mulhare is a freelance writer living in Forest Hills, Queens.

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