Turning Operational Data into Higher Property Value

Drew Hall: Welcome back to the Peak Property Performance Podcast. I am your co-host Drew Hall, and today's episode is going to be the following: why underwritten numbers hold up or fall apart when operational data, digital infrastructure, and asset value are hiding in plain sight. So before we introduce our guest, just a quick reminder, as always at the top of the show, like, share, subscribe to the podcast. We're trying to get it out there, spread the word on the Peak Property Performance movement, and honestly, change an industry is what we're hoping to do. We're not just pumping out these things for our benefit, but really for everyone's benefit. And I think the more stories that we share along the way with all of our guests, The more evident it is that there's a lot of room to grow and improve. So we're excited about that and the feedback that we're getting so far. So keep it up and we appreciate that.

Drew Hall: And if you think that you would provide... if you're in earshot right now and you think you'd provide value as a guest here, or you know someone who would, we welcome CRE thought leaders from all stages of ownership and operation. So please reach out to us. And as always, the best way is right there at peakpropertyperformance.com. That's the absolute best way to get in touch with us. So without further ado, Bill Douglas, welcome.

Bill Douglas: Always a pleasure. I like doing these things more and more, Drew. The more shows we have, the more fun it gets.

Drew Hall: Yeah. Yeah. Yeah.

Bill Douglas: Yeah.

Drew Hall: I agree.

Bill Douglas: And the first couple I was nervous and edgy and now it's like, oh yeah, we're going to record today. I like it. So today's guest is Mark Sinnott. Mark, say hello before I read your intro.

Mark Sinnett: Yes. Drew, Bill, good afternoon.

Bill Douglas: Well, Mark is coming to us from Canada today. He's a principal with Avison Young and has spent roughly 25 years in commercial real estate brokerage with experience across major platforms, including CBRE, JLL, and Avison Young. So I was excited about this conversation because what makes Mark especially useful is that he's not looking at technology as a vendor or a systems designer. He's seeing it through transactions, what buyers underwrite, what gets treated as value, what gets discounted, and where the numbers either hold up or get repriced. God forbid they get repriced, right? So Mark, welcome to Peak Property Performance. I'm looking forward to this conversation.

Mark Sinnett: Yeah, thank you, Bill, and thank you, Drew. It's great to be on this podcast and pretty excited to talk about this because, you know, to your point, in what we do on a day-to-day basis is really looking at the numbers. And so much of it comes down to, you know, you could say operating performance of a property, right? And I think it's often, I would say, potentially overlooked. And I would certainly say also, you know, even on our end, we're probably a little bit guilty of it. The data Is not consistent, you know, and I think, yes, there's a component of it where data is, you know, the data is local to the property, but that, you know, how many owners, how many tenants, if you will say, are tracking all of their operating expenses across a portfolio, or are they, you know, I think very often they're probably not. And so there is probably a ton of data that's, you know, in a folder or in a, you know, a line item somewhere just treated as an expense. And it's never thought of as more than that. And I think even when we underwrite properties, it's oftentimes thought like that.

Mark Sinnett: So it's pretty fun to be on this today with you guys and kind of, you know, seeing how we can think about it less of maybe just an expense, but where, where we can go with it.

Drew Hall: Oh, that's a, that's a perfect tee-up to topic 1, Mark. Seriously.

Bill Douglas: Thank you for that, by the way.

Drew Hall: That's a brilliant tee-up.

Mark Sinnett: You know, just glad to be here and talk about it.

Drew Hall: Yeah. Well, so from your seat there, underwriting and selling major assets, Let's talk about that specifically. What do you now look for operationally that owners may not realize that buyers are paying attention to?

Mark Sinnett: Look, I mean, you know, we could probably go through all, you know, the major line items, but, you know, let's start with an easy one, right? Which would be, let's say, the energy costs, you know, and again, what I would say is that even on our side, like we should, if you own the portfolio, you should be benchmarking, you know, you want to call it your CAM, your OpEx, you should be benchmarking them across a portfolio to be able to see, you know, which properties and what your average cost is, right? I don't think... I think most people will look at it on a property-by-property basis. But if one property, let's say the energy charge is $2 a square foot and the other one is $1.15, the question is why, you know? And so that becomes kind of interesting. And we, you know, we've had some clients that have gone through big energy programs where they've, you know, retrofitted it. And then, you know, it's been fascinating. Like we had a property, you know, just to think about it, we had a property where they did a couple million dollars, they put in a full digital infrastructure, where everything was like, all the heating and cooling was fully controlled and fully automated and was on an app. You pick it up, you look at it, you could see where, what the temperature was, how much air was blowing and everything. And they received on top of it a subsidy from the government to be more energy efficient. But again, it's local to that property, right? And I think where things can get interesting is can you now fully centralized that where you're seeing it across your whole portfolio.

Mark Sinnett: But that's an example of where someone did kind of go and put data on something as simple as boilers, you know, and I will tell you it was way more complex than that. But the outcome for me was a little screen that showed, you know, performance. And I think, you know, thinking of this show, Peak Property Performance kind of works for it, right?

Drew Hall: All right. Yeah, yeah, yeah. So that's perfect. Yeah. An example of one particular building management system, like an HVAC, for instance. in one building. I mean, overall, what operational signals tell you that an asset is well run versus just well presented?

Mark Sinnett: You know, I think if you're thinking of a well-run asset, you're, again, you're going to have an operator where the information on their building is easily accessible. You know, and again, like, and, you know, I might be going off tangent here or off topic, and you guys can kind of bring me back on. But we recently worked on an asset with a client where they were like, I hope the buyer is comfortable coming into the office to look at the leases. We haven't even scanned them. I was like, a little analog discount.

Bill Douglas: Discount.

Mark Sinnett: Yeah. I mean, you know, look, again, you know, you think of that and you're like, okay, if the leases aren't digitized, Right? And, you know, maybe I'll go a step further. It's like, you know, you think of a building and let's say a building has 100 different leases that have been written, you know, over the last 20 years, the clauses are not going to be all consistent, right? You know, Article 5 is not always going to be the sublease clause. So, you know, how, how is your data? And again, as I said, it can be in anything like you could be, you could make efficiencies in just how you administer your lease documents and where not just you save the information, but how you save the information. You know, oftentimes I think real estate, you know, somebody had said it once where it's interesting, it's like probably the only industry where now it takes longer to build. You know, everything else has increased efficiencies. I think real estate's the only one where it's kind of gone somewhat backwards. And there is some, you know, realities where regulations have gotten stricter and, you know, how you build is more secure and all of that stuff.

Mark Sinnett: But we just don't really see, it's one of the few places where you really see efficiencies. And so I think going digital, You know, is where I think there is a ton of value that can be created. And so I can give you like an easy story of where, you know, missing an option could cost millions of dollars, right? Like if you forget to send, you know, again, another, you want to think about it like another quick example. We've had a client who forgot to send her a, you know, rent increase on time and that hits on the bottom line, you know. So there's just so much, like you can go line by line. Again, I would say here's a basic one in Canada. Every fall we kind of have to renegotiate snow removal contracts. I don't know that anyone is running a historical to see what it was previously and understanding where the ups and downs are, if it's more or less from the previous year.

Mark Sinnett: Where does that information get saved? Where is that contract? It's, it's, and that's just on the expense side. And then the performance of the building, you know, which might be more where we should be thinking or, you know, having a discussion on, you know, probably one of the best buildings that we had, we sold it about a year and a half ago now, almost 2 years ago now. What was really made it stand out was just they had put everything, not to say digitized, but everything was electronic. You know, so you walked into the building, facial recognition, you know, so you keyless entry, everything was fob, which made it super easy, right? Like, again, you know, just tenants moving in and out, you gotta, you don't have to chase them for keys, right? It's seamless. That was a big thing. Access to the elevators, you can control what floors people went on. That was, you know, they even went all the way to the extent of they had what's called dispatch elevators. So, you know, you're not stopping and everyone's going like 7, 8, 9, 10 floor.

Mark Sinnett: You press the floor you're going on, it tells you which elevator to go. They then built an app so that, you know, for some of the common areas, let's say if I wanted to use the, you know, they had like a cinema room and I wanted to reserve it, I could easily reserve it online, which made it kind of a seamless thing. And, you know, so the premium on that was that you really did and really could build a community feel to the complex, right? Messages were sent. And then, you know, even they had gone to the extent where, you know, they could track again, because it was all through, through the app, you had a repair request, so you put it in, and then you could see, you know, you were the 3rd in line for, let's say, if there was a repair request, they were then able to check to see, you know, had you paid your rent before they go and repair? And if not, they would tell you like, hey, so, you know, it meant less people on site. less friction. It meant for the... and it really, you know, what we saw was, I would say, to say it simply, is that it made the tenants sticky, right? So, you know, a tenant in that building is thinking like, you know, geez, I moved to the next building, it's back to fumbling with keys, you know, I got to go knock on the janitor's door if there's a service need, you know, like, that's the old school way, right?

Drew Hall: That's what I was thinking, literally, was like almost like a sense of belonging, like, yeah, this is... these are my people here, you know, The more cohesive those systems are, the more you feel like a part of a process that really works. And you use the word community. I was thinking the same thing. You know, you're part of a community that's kind of performing better than most others out there. So you're right. Leading to sticky client. That's beautiful. Yeah.

Drew Hall: Well, no, I was gonna ask one more question here on this, on this topic, like in terms of the operating data itself, from the buyer's perspective, do you see that buyers are asking better questions about systems and operating data during their diligence?

Mark Sinnett: I think more and more they are, you know, and are recognizing more and more, like I said, when everything is kind of easily accessible and at their fingertips. And I think that's still like, we still have a long ways to go. You know, even when we ask, we ask clients for information and it comes in very, very piecemeal. You know, like, you know, the expression I like to say, it's like, you know, someone shows up and gives me a shoebox with paper in it. It's not that bad anymore, but sometimes it really... you know, it really is a little bit all over the place, or information is lacking, the backup isn't there. And I think at a really simple level, you know, it's having solid information that's easily accessible creates confidence. And when you think of the entire investment space, you know, investor sentiment is really based on confidence. So if I feel like this is a good investment where, you know, I'm going to make potentially money, that's typically because I'm confident in the decision that I'm going to make.

Mark Sinnett: So, you know, bad information or contradictory information or information that's lacking kind of erodes confidence and creates doubt and uncertainty. And so, you know, if we can't substantiate something or, you know, if we have to start putting in a ton of assumptions because we can't back it up with anything, it's not going to make for a smooth transaction.

Bill Douglas: Well, that's a perfect transition because we've been talking so far on the show about additive, additive NOI, additive asset value. So not to be the Debbie Downer, but I wanted to ask you about when missing digital infrastructure or data becomes a discount. So where have you seen a property get repriced, get discounted, or underwritten more conservatively because the data or the digital infrastructure simply wasn't there?

Mark Sinnett: Again, I think where it'll show up in 2, and I don't think it shows up like as a perfect line item, but where you'll kind of see it on 2 ends is you're basically going to see a weaker NOI. That's like the headline. So, you know, you can think of a building, let's say, that is, you know, again, going back to it as a basic, that offers Wi-Fi throughout. Well, you can probably ask for a higher rent, right? Because it's included. We find more and more in the apartment space, you know, turnkey person wants to come in, they don't want to engage in all the services, you know, the utilities, the phone, the cable, the Wi-Fi. They kind of just want to go in, drop their bags, you know, and willing to pay. And oftentimes you can get bulk pricing for that stuff. So there's an opportunity there.

Mark Sinnett: So you'll kind of see at that point where you're charging a bit higher rent than your peers and the tenant enjoys kind of life, right? And you can usually get it at a bulk discount. So I'd say that's kind of like one example. I think other places where, you know, we're starting to see it more and more is just on the efficiency of the operating expenses, kind of going back to it where, you know, again, some of the basic stuff like utilities are going to be higher because you have an outdated, you know, whether it's boiler or, you know, chiller on the roof that's, you know, not running optimally, you know? So I'd say those are kind of 2. And then, you know, again, if we get into more complex properties, right? Like, you know, we sold recently a cold storage facility. You know, again, part of it was built in the '70s, part of it was built in the early noughts, like in around 2002. And then you look at the state-of-the-art one that the client had moved into, It's night and day, you know, and, you know, how much of a difference? We might sell an older vintage 1970s for, you know, we'll give some round easy numbers for $150 a square foot, and a brand new one costs $600 and is worth $600 a square foot. And they're doing the same thing, right? They're, they're just cold storage. But state of the art, everything is optimized, everything is running efficiently, Temperature controls are way better and, you know, just the whole infrastructure.

Bill Douglas: So rather than talk about a specific system, I love the fact that you brought an example outside of the typical office or apartment market. So thank you for that. But how should owners think about digital infrastructure before they go to market instead of getting punched in the face by a buyer that finds the gap?

Mark Sinnett: And, you know, look, I'll think of another quick one too. So, you know, more and more what we see in new buildings, I'm sure you guys see this because, you know, this is like the new standard is, you know, now in a new apartment building, there's like a literally like a digital box, right? You know, in the old days, you'd have the wire running along the quarter round. And now everything is centralized and, you know, all your cable, your Wi-Fi, it's all in the right place, right? So that's again an example of where we're starting to see buildings are being built a little bit smarter. So, you know, again, I think the main thing is if I'm looking at a current owner today, what we're focused on, you know, kind of looking with them is like, Bottom line, how can you integrate not just data, but data infrastructure to make the property operate more efficiently? And a lot of that stuff operating more efficiently, I'm going to sound a little bit repetitive. Some of it is basic stuff, keyless entry. It costs to set that up, right? You got to set up a Wi-Fi and everything. But think about it, you want a tenant calling you at 8 at night, and it always happens on a long weekend, right, guys? It's always going to happen on a long weekend. I lost my keys.

Mark Sinnett: Remote access. Easy. Done.

Bill Douglas: Right?

Mark Sinnett: Or, sorry, I gotta leave my long weekend vacation, you know, cottage, to drive back into town to get the spare key.

Drew Hall: Yeah, that's a game changer. Absolute game changer.

Mark Sinnett: So, you know, we tell clients, it's like, if you can, if you want to hit the high end, like, Bill, maybe going to go to your question, you know, you show up at a closing, here's 100 keys, here's all the leases, in a box, right? You think of it, the transition right over. So now they got to go into their system, they got to like enter every line by line, like the new tenant's name, the billing address, blah, blah, blah. That's how it was done, right? Or you show up and you're basically like, here's your password.

Bill Douglas: That's the difference between having an aggregated data lake and having disparate systems. We talk about data silos all the time. So what I hear you talking about in real life is siloed Data. Like we keep talking about access controls and HVAC controls, you know, building management systems, but it goes on and on and on. These buildings you're talking about have 12 to 15 systems and you're just talking about the ones that tenant directly touches. There's a plethora that impact the tenant experience that the tenant doesn't actually see. You mentioned elevator controls. That's another one, you know, lighting controls, for instance, there's controls around the swimming pool and all the common areas and all the amenities.

Bill Douglas: et cetera.

Mark Sinnett: It's like, when are they accessible? But again, you know, again, if you go back to the basic, like a simple building, if without any of this stuff being, you know, kind of centralized or put, you know, on a platform electronically, the transition from a buyer, from a seller to a buyer means physically handing everything over, physical copies of leases, physical copies of keys.

Bill Douglas: That's a discount. If I'm the buyer, that's a discount.

Mark Sinnett: Oh my God. Yeah. And it's a discount just because again, it's also more costly. You're probably going to have an extra janitor because, Or, you know, you're gonna have more onsite staff, or, you know, you're, as I said, like, you're gonna have missed a renewal period and you forgot to send a notice of rent increase, you know, like, it's leakage, you know, if I could say it that way. Things will leak, fall through the cracks, you will miss things, whereas, again, in an ideal world, you show up, here's the passwords for these 2, 3 systems, or here's the password for one global system, and the And that property is now in the other person's name. And the one building that we did last year was almost that. They literally transferred over the domain behind the platform that they had developed behind the scenes. And the new buyer was able to come in and basically the tenant didn't see any difference and everything was available, even like sending the rent checks, right? Again, you got to... how do you send out that notice? Well, if you have a digital app, here's the notice.

Mark Sinnett: Or you go back the old way where it's a letter at every door.

Drew Hall: Well, yeah, you know, so like if we think about those 2 realms, so to speak, you know, the tenant convenience portion and then the operating systems that we've been talking about, I'm just curious how you see that. It's almost not that these things have become blurred, but there's just so much more possibility these days because of the potential for all of these systems to participate in data flows, which means that if you can capture that data, and utilize that data, it allows you to control so many things more granularly and yet across multiple systems than ever before. Sort of what we started to talk about a little bit of that. So all that leading to this question, I mean, where is the line these days between a tenant experience amenity versus an operating control system? You think that's moved and do you think it's for the better?

Mark Sinnett: I think, well, I think tenants are more demanding it and expecting it and they'll notice it when they show up in a property, you know, that kind of doesn't have it. I don't know how else to say that. You know, going outside the, you know, again, same thing like an office building, right? Again, you know, you can think of an office building. I think people want to have access to their office building at all times, you know? And so you gotta find a way to be able to set up, again, the infrastructure to be able to allow that access seamlessly. But you also have to keep the building secure. So, you know, again, with the right optimization, you can achieve that, you know? And if you wanna optimize your building, by the way, let's say, let's take an office building that's in Right next to, you know, a sports arena. So you've got daytime crowd where you've got your typical office employee going, and then you got nighttime for the event. So you got to manage that flow, right? So again, old school way, let's just put a parking attendant.

Mark Sinnett: New school way, you know, and then can you get granular where, you know, you know when to charge, right? It's a playoff game.

Drew Hall: That's,

Mark Sinnett: I'm gonna charge a premium.

Drew Hall: Flex pricing during those events that you're describing. Absolutely. Like leveraging the asset. That's right.

Mark Sinnett: Yeah.

Bill Douglas: A lot of success with that at client sites, finding thousands a month just in dynamic parking pricing.

Mark Sinnett: That's like definitely an easy one for office. And like, we have a building we're selling and, you know, they, they, they kept the building as monthly. They haven't opened it up and they're, and they're right next to, you know, a main entertainment district. And we keep telling them like, you know, you got to do it on the weekends. And it's like, but again, it was actually the infrastructure. It's like, you got to put in, you know, the, the You have to put in... sorry, we use a word in French, but you have to put in the infrastructure to kind of like get it automated. You know, it's obstacle, but it's like going back to it. When we're on the market, we're telling clients like, this is a need, this building lacks this, you put this in and now your revenues will appreciate, right? So we try now more and more to identify these weaknesses in buildings to, you know, show to owners.

Mark Sinnett: And I think a lot of them are becoming more and more what you guys are talking about.

Drew Hall: Yeah. I mean, it begins to scratch the surface a little bit in that example that you used earlier about tenant requests, some kind of maintenance, you know, it's a maintenance request initiated in the system, but it's cross-referenced with how you're doing on your rent payments. You know, it could be that both of those pieces of information are in the same system, so that's easy. But what if those pieces of information were in different systems? That's where we get into that, you know, the data lake, the correlation of data, the ability to cross-pollinate and actually make decisions in a more holistic fashion. And yes, bring it, bring in the AI side when it's time for sure. Yeah. Well, okay. So I mean, the last question that I had in this, in this area was just with regard to PII, that personally identifiable information, you know, as more and more data is flowing in and through these systems, what concerns should owners keep in mind about tenants' PII? Yeah.

Mark Sinnett: Touchy subject, right? Sure.

Bill Douglas: We do have some lawyers in future episodes, everybody listening. We have a couple lawyers that are going to come on and share risk and give advice, not advice, but share experiences around this topic. So we don't have to dive that deep in it, Mark, from a legal perspective, but do it from an owner, from a seller or a buyer perspective.

Mark Sinnett: I think you, and I mean, again, it's not unsimilar to, you know, thinking about this from a just common sense perspective. You don't have to share necessarily people's personal information. You know, names, like again, we receive a lot of digital, like we'll receive rent rolls. It doesn't have to have the full name of the person on it and their date of birth and all of their background. That stuff probably should not be optimized to a certain extent or used as part of like, you know, data aggregation or whatever you want to call it. So I think it's aware, what is, is like, you know, what rent are they paying? What's the size of the space? That stuff, it's generic. You know, again, like, we'll, you know, if I could again think of a simple thing, a person, we don't need to put, we just put tenant and, you know, the suite that they're in. So I think you do have to ensure that information that you're going to use, like personal information.

Mark Sinnett: So I just, I'm just going to share my opinion. I guess personal information should not be used in you optimizing, but the data, which is like I said, the square footage that the person occupies and the term of the lease and the rent, I mean, that's just to me, not personal. That's all I can say. So I think it's ensuring it from that perspective that, and again, when we market stuff, we ask for confidentiality agreements. It's actually something we're quite sensitive about. We'll get calls sometimes from outside brokers and they'll be like, hey, send me the information. And we're like, well, we don't know who you represent. And what if it's a competitor who wants to take, just see the rent roll to know when the tenants' leases are expiring so they can go poach the tenants? So I think again, going back to it, it's like before you Use the information, you know, always think through like, who's going to get to see this? That would be my opinion.

Drew Hall: Yeah, definitely. Yeah. I mean, we run what we, what we've titled the ultimate privacy policy for OpticWise. And I mean, one of the core components of it is we just don't collect it unless there's something that we could absolutely do with it. You know what I mean? Like there's certain things that we need to service our clients, but there's a lot of pieces of data out there that are quote unquote valuable, but not really for what we do. So don't collect it. Don't even collect it.

Bill Douglas: Right. Don't collect it. Don't distribute it. Don't monetize it. Anything personal, we just don't. We, we will collect a lot of data, but as we've said, Drew, on the show, you've said it, I've said it. When we talk about data, we're talking about data generated by the property.

Drew Hall: Exactly.

Bill Douglas: Data from the tenants. Lease occupancy and rates, I know you take the PI out of it, PII out of it, is valuable. Like that's density, that's turn and churn and vacancy and things that impact NOI. But nothing that a tenant does on any of those systems is valuable data. So we just don't collect it. Much more companies did it that way too, because I have sons that are tenants and I don't want their data mined, you know?

Drew Hall: Yeah, exactly.

Mark Sinnett: And I mean, look, also, I think we're, you know, I think there's a clear, all, you know, a second red line is like, I'm not taking the data that I get from clients, then turning around and selling investment reports to another client with that data, right? Like we're using the data that's given to us specifically for the reason it's given to us, which is like like, hey, I'd like to know what my property is worth, you know? And so from that perspective, we're using the data they've given us for the purpose that they've asked us to use it. I think that's also another key point is, you know, what is, what, what, why do you have access to this data and what is the intent of it? I think if I was to turn around and then use, like I said, to go back to that evil example, take that data and then now go see the neighbor and say, hey, I'll sell you the rent roll that I just got, you know, for $50 so you can go poach the tenant. Well, now I've crossed probably the ultimate red line, but I think there are some that, you know, kind of do think that they've got all this data and now they can go see a client and say, we've got data that would be, you know, I mean, I don't know if you guys get it, but I get an email every day about like, they'll sell me lists of every, you know, family office and this thing and that thing. And you're just like, you know, but weren't you like 2 minutes ago emailing me asking for data and now you're repackaging the data you asked me for and selling it back to me? So. Yeah.

Drew Hall: And, you know, I'm just going to give this super analog example of PII that's just really annoying. But if someone comes to the door, you know, if it comes to your home and rings the doorbell and you accidentally didn't realize they had a clipboard, so you talk to them and they try to say like, well, you know, your neighbor Carl, he was interested. I'm like, that is so offensive.

Mark Sinnett: Like, yeah, exactly.

Drew Hall: Just first of all, is there really a Carl? Maybe there is.

Bill Douglas: Yeah.

Drew Hall: But I'm like, does Carl want you revealing that? Like, why would I give you my information to then subsequently reveal it to the next door you knock on? Like, that is crazy. So when I think of PII, it's this kind skeptical side of me comes up so fast. Like, oh man, PII is the reason. PII getting where it shouldn't have been is the reason why I'm going to get 25 of those emails today or whatever it is. You know, like, yeah, it's frustrating.

Bill Douglas: And it's the reason we all look at our Ring camera before we answer the door.

Drew Hall: Yes, absolutely. Absolutely.

Mark Sinnett: Exactly.

Bill Douglas: Well, we talk extensively on this show about using data and digital as a strategic tool in commercial real estate. Let me shift a little bit and talk about data that lowers risk and reveals NOI. So Mark, how does clean historical operating data reduce the need for conservative reserves or broad assumptions in underwriting?

Mark Sinnett: I mean, I think like 100%, and that's, you know, as I said at the beginning, is like the cleaner your information is, the more accurate your information is, the more I can get someone to underwrite sharper. To say it really simply, and otherwise, and I've had clients like literally you know we've had institutional investor clients call us up and say, "Hey man, you know if you don't give me that information, I got to put in like a really big reserve, and it's not going to help the bid that you want, or it's not going to help me put in you know get the pricing that you're looking for." And it comes back to again if if we have clean data, clean information, if we have again a property where you know, the client has confidence that again, you know, they can run it without headache and running it without headache again, I think goes back to like, again, back to the simple one, like I lost the keys and you got to send somebody to open the door where you can do this obviously today completely offsite. And again, we toured another building and, you know, I would tell you like where they can take it to kind of next level. They have a rooftop pool that is heated now 24/7. So even in the middle of -30, degrees Celsius, so really cold. You know, there's an outdoor pool that, you know, the tenants and guests can use. This is for a hotel. You know, again, if you don't have that thing optimized, if you're not, you know, one, checking for the maintenance of it and having that data to ensure that it's running properly, heated properly, that thing is going to be a big NOI suck, right? But it's a modern building.

Mark Sinnett: It's, you know, it's less than 6 years old. So the data, the technology, the infrastructure, all of it is in place for them to have been able to do that. And it's a phenomenal selling feature, I could tell you.

Bill Douglas: Is there a way you could put a value on or share an experience around what a clean property data lake, data warehouse, data repository, whatever... it's a data lake, but I don't want to get techie on the show... what a clean property data repository would be worth in a transaction?

Mark Sinnett: I've never thought of it that way, so I'd really just have to shoot from the hip. But what I would say, and if I could look at it from a very simple metric, which is like price per square foot, which is kind of like the, to me, the ultimate apples to apples, if you will. I think it could add like anywhere between $10 and $40 a square foot. And again, I don't think, I don't know that it'll appear again. And that where, and why I say it's just a guess is I don't know that it appears anywhere as a line item per se where you see the exact dollar per square foot value. But I think what it allows to do is it creates A higher revenue potential and a lower expense. So when you look at the gap between the two, you know, and I go back to that example of where it's really dramatic is if you take something that requires 24/7 temperature control, like cold storage facility, and you look at what the new state-of-the-art ones require, and you look at an ancient one, and, you know, we sold one for $160 a square foot, a new one was built for $500, $600 a square foot. So it kind of tells you the difference.

Mark Sinnett: And yes, you can say construction costs and all those things, but what was in the construction of it was really just this thing had to be fully monitored, fully controlled. And I think that's slight, if I could say, I don't want to say an extreme example, but it's just, you know, a cold storage facility has to have 24/7 temperature control, 24/7 operations, even the systems that they use. But, you know, by the way, in there, it's usually now done with, I think it's Ammoniak is what it's called. And that's a type of fluid that has to be monitored with a 24/7 security system. You know, it's potentially toxic. So you have to, you have to really know what you're doing. So that gives you an example of where, you know, if you're talking some of these sensitive, more sensitive properties, you're really going to see the delta from what an ancient one, which is basically almost considered nonfunctional to fully modern.

Bill Douglas: Well, the same premise applies to apartments and office buildings and hospitality and student housing and senior living and et cetera, et cetera. Okay. Well, $40 a foot is, that's a lot. Like even a $10 is a lot. Yeah. So we've heard people say a quarter million dollars add transaction just because the data was clear. Like they, someone paid extra because it reduced risk. I like your dollars per foot better because it's obviously scalable instead of just being flat.

Mark Sinnett: And again, I think it's going to be very variable, but, and it's also going to be how much, but you know, absolutely. Like I think, you know, the other way I like to think about it, and I thought this was really interesting, someone had mentioned is, you know, you think of where, and I think it's kind of we're headed is that unfortunately, you know, climate change is happening. And not to get into the political side of it, but if you look at on the realistic side of it, and this is, you know, speaking from more of a colder city, you know, being up here in the north, a building without AC built in the 1970s, not an issue. It might have been 2 weeks in the middle of the summer where it was a little bit tough. Right. And the question that was asked to me by a client once, or that was said to me by a client once actually, was, you know, in another 25 years, does a building that doesn't have AC, is it even habitable anymore? And so you think of all these buildings and, you know, we have a lot of buildings that were built in the '70s and '80s in our market, and you think of how many of them are actually going to even be still habitable. And so you think through retrofitting all of those, you think about the cost, it could be down to zero, right? If certain infrastructure, and again, I go back to, I think, while I understand HVAC is a mechanical thing, but, you know, I recently installed one and the thing doesn't turn on without a digital engineer who has to call up the main company to get the whole thing working. And it is not a simple heat pump anymore, guys, which you probably know.

Mark Sinnett: And so, you know, some buildings might go down to a value of zero if, you know, if the technology and the data and the hardware, I guess is what it's called, And infrastructure is not put in place to handle all of these systems.

Drew Hall: All right. Well, Mark, everything we've done so far is about the industry and experience and case studies, examples, whatever. But now toward the end here, what we do is we call it the extra floor, but it's just to turn to you so that our viewers and listeners can just get a sense of you as a person. So we got 3 quick questions. It's just gut-level responses, you know, short answers, just whatever comes to your mind. So like number one, What would be a great piece of career or life advice that you have received?

Mark Sinnett: Great piece of life advice. You know, I recently was asked that by an intern on my team. I think the one thing I think what I told him, so maybe I'll repeat it here. I mentioned to him, I just said, look, I say yes to the opportunity. Don't be fixated on what you think you want or you, you're the goal that you have to have. Sometimes an opportunity will come up And you may not end up, you know, like, I think what I was trying to say to him was like, I've seen people, you know, say, I have to have this job, I need to get to this level by this date and stuff. And someone offers them an opportunity that they turn around and say, oh, that's not where I want to go, and walk away. So I think be open to opportunities.

Mark Sinnett: You never know where it'll take you. And oftentimes the opportunity will present itself, and sometimes we may choose it or turn it down. Because we felt at the time it wasn't what we were looking for. So that would be one that was the advice I gave someone on our team.

Bill Douglas: Well, we're going to shift from advice to practice. So what's one habit or practice that consistently makes you more effective?

Mark Sinnett: Don't say, don't accept no, I guess. Or, you know, uh, actually again, this goes back to, it said in a, uh, from a more senior broker and I'm probably not going to say it right, but I liked it. He, he called it persistent persistence or something like that and he just He kind of said he was persistent. And I do think to a certain extent, it is a lot of this is just being... and, you know, we're... I'm in sales, so, and I think that's maybe where I'm thinking of this, but I think it applies for most things. You know, you gotta really just accept it's not gonna work on the first time. And maybe just to finish on that, like what I always tell my... anyone who's starting in our business, and it was said again by another senior person, he said, you're 700 nos away from a yes. And, you know, when you, when you think... Federer gave, I think, a, you know, a graduation speech and he, you know, explained how many times he was at the time the best in the world and how many times he actually lost. His loss rate was, you know, I mean, baseball, you're a great hitter at a .300.

Mark Sinnett: It means you strike out 7 out of 10, right? I think basketball, you know, you're 40% free throw, maybe 50 is good.

Drew Hall: Oh, like from the field?

Mark Sinnett: Yeah, from the field. I tell everybody it's why I don't like golf because it counts your mistakes. I said, I like the sport where I can miss the net 7 times and then I shoot and score. And that's what they count is the points and the goals I scored. They don't count the misses where I find golf, it's the opposite. They count every stroke. So every mistake, but yeah, persistence, persistence.

Drew Hall: Yeah. My 15-year-old jokes that, I don't know if you heard this or just came up with it, but he goes, can we agree that the goal of golf is to play less golf?

Mark Sinnett: I like him.

Bill Douglas: It's an excuse for a good walk with friends.

Mark Sinnett: Yes, that I will give it. It's just the nature of the sport. But no, I would say I think you just got to accept that if it doesn't work the first time, you try again.

Drew Hall: Yeah, yeah, yeah. It's just a roundabout, silly way of talking about efficiency is the goal in golf. Yeah, yeah. All right, Mark, so the 3rd and final, it's a deep one. It's a deep one. Are you an early bird or a night owl?

Mark Sinnett: Oh, I used to be a night owl. I have young kids, so I've turned into an early morning. And, you know, truthfully, again, it kind of goes back to that. It's like, one of the fun things about the job that I have and what I realized, which is great, is, you know, to a certain extent, I'm never off, you know, again. And I think the secret to this job, if I could say, is, you know, again, it was, this was something, a piece of advice that was told to me by a lawyer once. He said, you know, there's no such thing as the best contract. He goes, if you're a lawyer and you think you're going to write the absolute best contract, that's just never going to exist. He says, but what clients pay you for is be there, availability.

Mark Sinnett: You know, when they need you, unfortunately, you have to be available. And he goes, that's the difference. And, you know, how I look and think about that is that, you know, to a certain extent, I'm never necessarily off, but that doesn't mean that I am stuck at my desk or that I can't go see my kids play, or I can't, you know, I'm going to go after this and coach my kids' baseball game. But it does mean that if, you know, at 9 PM, I have to respond to an email after the baseball game, I'll do it. You know, so being super responsive, I think if you're in the service business and if, and I think more and more we're all in the service business, everybody has choices and, you know, it's not always that you're going to be able to deliver the best product, but I think what clients rely on is that you're responsive and when they need you, they can reach you.

Bill Douglas: Yeah. So speaking of need you, Mark, how can our listeners contact you should they choose? I mean, we'll put all this in the show notes as well, Tell everybody the best way to reach you.

Mark Sinnett: I say the simplest is by email. Again, being super responsive, I'll pretty much respond to every email. You know, phone sometimes a little bit harder, but my email is my name, mark.sinnett@avisonyoung.com. You know, and as I said, super responsive, will always answer back. And then, you know, phone, there's an address where I can also be reached, but like even voicemails, people don't really listen to voicemails anymore. So I'd say by email is the easiest.

Bill Douglas: Mark, appreciate it. It's been a great conversation. Thank you. And thank you all our listeners. And as Drew said at the beginning of the show, please like, subscribe, follow, share it, email it to somebody, put your hand up. I want to be on the show, or I know somebody that would add value, or I'd love to hear from that person. Give us ideas about topics or guests. We appreciate it.

Bill Douglas: And thanks for helping us further the movement about using data and digital to improve your commercial real estate property and portfolio. Thanks again, everybody. Catch you on the next episode. Yeah.

Mark Sinnett: Thank you, Bill. Thank you, Drew.