Art McCann of Highwoods Discusses Leveraging Technology for Innovation in Real Estate
Art McCann is VP and CIO of Highwoods Properties. He has been with Highwoods for 18 years. As a 28-year business technology veteran, Art provides leadership for the continued development of an innovative, robust and secure technology platform. Highwoods is a publicly traded real estate investment trust specializing in the development, acquisition, leasing and management of high quality office space. The company owns and manages 219 buildings totaling 31.4 million square feet across nine markets primarily concentrated in the Southeast.
Tell us about your role within your organization.
My main responsibility is to strategically align every technology investment to the business by improving processes, heightening cybersecurity and/or increasing NOI. This starts with what I believe is one of the best technology teams in real estate. We regularly host open discussions with every business unit and every corporate support department to learn how to better serve them. At Highwoods, you are empowered to ask questions and fully licensed to find a better way. If someone says, “we’ve always done it that way,” we always ask “why?” I’m very proud of what the team has accomplished over the years. Our list of accomplishments is long, as we’ve addressed some form of technology automation/improvement for every function/ department within our business—built or bought.
What were the major technology projects you started or completed last year?
We invested a significant portion of the team’s time last year dramatically improving the automation and efficiency of our paid parking garages, which is branded as SmartPark by Highwoods Properties. We created a dedicated unit within Highwoods to devise and implement this effort. By replacing outsourced operators in 11 urban parking garages with SmartPark technology, we have successfully heightened the level of customer service, the customer experience and significantly increased NOI. This cross collaboration among many corporate support departments, such as accounting, asset management, customer service, security, property management, and marketing, has clearly resulted in a win (cost), win (convenience), win (speed).
Also, in 2018, we continued to push for higher yield on technology initiatives rolled-out in prior years. We relentlessly sought ways to refine processes to benefit Highwoods. We found opportunities for meaningful enhancements in Nexus Payables, Building Engines, Snap Pay for online rent payments and MRI for development feasibility. One specific example is redesigning our stacking plans to offer greater functionality and made more building-related information accessible to coworkers via our intranet site.
What are your highest priority technology initiatives in 2019 and what are the drivers behind those initiatives?
We plan to convert five more urban garages to the SmartPark platform in 2019. This will certainly continue to enhance the customer experience and increase NOI. Another plan is to leverage the Microsoft Power BI tools started in 2018 for advanced analytics. Microsoft continues to invest heavily in the BI tools and the out-of-the-box functionality is impressive. Another high priority project is replacing the system currently used with Salesforce by Ascendix for contact management and marketing automation. This has great promise to centralize all customer (aka tenant) contacts in one location.
For operations, we are outsourcing our data center to a co-location facility and moving the Cisco phone system to hosted voice to prepare for our office relocation in 2020. We are planning to eliminate as many desk phones as possible in the new office by offering associates the option to work via cell phone.
What technology, automation or innovation trends do you see having the most impact on the industry over the next three years and why?
The amount of money invested in technology applications for real estate is not sustainable and it seems like it’s getting close to the tipping point of some consolidation and/or creative destruction. We predict this will happen over the next three years. 2018 saw around $9 billion invested in technologies related to real estate. There will be some winners and losers related to this and the challenge for any CIO is picking the right horse to win the race. Realcomm provides a great platform to figure this out.
Blockchain, AI, IoT, and other automations are innovative, but have not seen large scale adoption yet; full functionality is seemingly just a few years off. The 2018 Gartner Hype Cycle listed Smart Workplace as an emerging technology. This is the first time we’ve seen anything real estate-related on the Gartner radar! We do see the promise of the true ‘intelligent’ or ‘smart’ building finally having something beyond version 1.0; particularly in our office build-to-suit projects, which will only develop further over the next three years. Real estate is still ripe for automation. It lags behind other industries, but we are catching up.
Conference update: Art McCann was the winner of the Realcomm Julie Devine Digital Impact Award which was handed out on June 13 at Realcomm | IBcon 2019 in Nashville during the Digie Awards Ceremony.
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UPCOMING REALCOMM WEBINARS
A Path to Net Zero – Driving ENERGY EFFICIENCY in Smart Buildings - 7/18/2019
One of the first trends to emerge in the modern smart building movement was energy conservation and efficiency. Approximately eight years ago, the industry realized that connecting energy related equipment to a network and applying advanced analytics and complex integration strategies could result in a significant reduction in energy and natural resource consumption and a resultant decrease in energy related expenses. In recent years, operational efficiency and occupant experience have been added to the smart building discussion, sometimes overshadowing energy efficiency. This webinar will focus on the very important goal of including energy efficiency in the comprehensive smart building strategy.
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Ryan Knudson, is the AVP for Operations and Energy Management at Macerich. He is responsible for the development, execution and operations for all Capital Expense Energy and Smart Building projects as well as national program vendor management. He oversees the daily operations of Macerich’s portfolio with a focus on same center NOI growth.
Akshai Rao, a vice president at Yardi, is responsible for the development of procurement and energy management solutions to ensure high-performing buildings. Prior to Yardi, Akshai spent five years at Bain & Company where he focused on technology and telecom.
Jean-Simon Venne is a tech expert who thrives on developing and implementing new technology to solve long-standing commercial issues. He has over 25 years of experience in the fields of telecommunications, biotechnology and energy-efficiency specializing in the fast and efficient migration of technological innovations to commercial applications. With an industrial engineering background, Jean-Simon is uniquely trained to optimize the value creation opportunity that exists where new technology intersects with business and energy markets.
Gary Fescine FMA, RPA is the president of GFC his own consulting firm. He has recently retired from BlackRock where he was global director of facilities, building operations, overseeing 77 sites in 23 countries. He has held a number of related positions including director of facilities at The New York Times and director of operations at the New York Post. Mr. Fescine was the recipient of several energy savings awards including the Energy New York Award in 2017.