Institutional Real Estate, Inc.

NAREIM Dialogues Fall 2017

The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products

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Page 17 of 47

NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT MANAGERS RISING EXPECTATIONS FOR TRANSPARENCY IN COMMERCIAL REAL ESTATE 16 NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT MANAGERS T he average person spends 90% of their time indoors. The average building is designed to leave 20% of its occupants dissatisfied with indoor environmental conditions. Each of us easily experiences perhaps a half dozen buildings per week. Consequently, over the course of a normal work week, each of us has a nearly 100% chance of experiencing uncomfortable or even unhealthy conditions in even the best managed properties. 1 These statistics are not new. However, changes in customer expectations and technology are making them more visible, relevant, and actionable for asset managers. Let's start with changes in expectations. Consumers increasingly believe that they can quickly find information about businesses and even specific properties. This is fed by consumer-facing tools such as Zillow, Yelp, TripAdvisor, or WalkScore. These instantly available applications have conditioned consumers to expect that they can type in an address and get a range of relevant information, from personal experiences to environmental performance metrics. In fact, for many consumers, it has reached the point where the absence of information is perceived as a risk factor and, say, 25% of poor reviews on TripAdvisor may be enough to send someone searching for a different hotel. Over time, the availability of these tools shapes expectations about the type of information that should be available about a business or a property. The combination of changing expectations and readily accessible tools to share experiences challenges long- standing practices in the property industry. For example, buildings are typically designed and operated to provide thermal comfort for approximately 75% of occupants. The net result is that, on average, buildings are designed and operated to leave roughly a quarter of occupants less than satisfied with indoor temperature. This is considered Chris Pyke, Ph.D., Chief Strategy Officer, ACLIMA INC Opportunities and Challenges for Asset Owners and Managers

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