Real estate experience firm HqO today launched a system of record for customer experience in commercial real estate, which the company says will help empower property owners and operators to drive long-term asset value.
HqO’s new platform aims to address challenges resulting from disconnected data and systems by consolidation building operation and tenant experience insights so that facility teams can create “vibrant, profitable properties” that provide flexibility, hospitality and measurable workplace ROI, the company said in a Thursday release.
Alongside the platform, HqO is releasing its REX Framework, a methodology that aligns experience delivery with financial outcomes, which it says helps organizations create outcome-driven environments “where every interaction transforms properties and drives tenant satisfaction, operational excellence, and long-term performance.”
By connecting three workflows — asset management, tenant lifecycle and building operations — the platform connects the tenant journey to the investor lifecycle and enables teams to set and evaluate key performance indicators across commercial real estate, HqO says. These metrics include net operating income, capital expenditure and return on investment for asset performance; satisfaction and retention for tenant experience; and uptime and efficiency for operations, per the release.
“The smart operators are really developing a methodology for catering to different personas and stakeholders within the customer segment,” Chase Garbarino, CEO and co-founder of HqO, told Facilities Dive. “They have their investors and they have their tenants.What’s the difference between how [different employees] access the office, versus the person who is negotiating the lease and doing the administrative work?”
The REX Framework breaks down to five parts — assess, activate, engage, monetize and measure — according to Garbarino. “First and foremost, when you think about how people assess space, there’s been a secular change in the ROI of the workplace,” he said. While traditional commercial real estate assessments take the physical environment and basic occupant survey information into account, they fail to look at the different types of work being done at a particular location, Garbarino said.
“What's the difference between somebody who needs concentration space … versus a scrum team of engineers that are working on a software project, versus [those working] on a hardware project,” he said. “The set of variables that need to be assessed has gotten dramatically more complex in terms of how people get onboarded.”
Once an asset is assessed, HqO then provides owners and operators with AI-powered insights, including lease renewal forecasting, operational planning to improve NOI, and benchmarking performance across assets and regions, to “activate” properties and drive improvements.
Return-to-office trends have pushed flight-to-quality in the office market, driving prime building vacancy levels down and increasing rents in Class A+ and Class A office buildings, but overall vacancy rates remain elevated. This has resulted in decreased rents for lower-class buildings and forced operators of non-prime stock to raise concessions in hopes of attracting tenants, according to a CBRE analysis released in March.
As a result, owners and operators could benefit from leveraging tenant experience data to improve asset performance and operations to attract demand, Garbarino said.
“We can’t all pay 200 bucks a square foot at Hudson Yards,” he said. “Most tenants are not going to expect [that] experience, but they’re going to expect better than what they had, he said.” As a result, operators are going to have to provide more service offerings that are temporary and mobile, with amenities that are significantly less expensive, he said.
“Where the capital markets are, it’s not super easy to completely reposition an E+ asset to make it an A-minus or an A, not even necessarily a trophy [asset]. There’s going to need to be some creativity in terms of, ultimately, how they gussy up these assets,” Garbarino said.
