Virtual digital interface photo credit: Getty
Getty
As the saying goes, the devil is in the details. End users will never see the enormous logistics and coordination efforts that go into keeping buildings and indeed real estate portfolios operating seamlessly, but, without these, our user experience would quickly fall apart. There are many aspects to delivering a seamless customer UX, all equally important. One that the layperson will rarely think about is CapEx management.
Operators such as WeWork spend billions annually in CapEx, across global portfolios. Managing these operations is a painstaking, time consuming and expensive task. WeWork is one of several large global operators that has partnered with project management startup Honest Buildings to manage all construction projects across its buildings.
Honest Buildings is an owner-centric platform that was designed with the objective of providing a centralized view of all construction projects in a portfolio, whether they are currently underway or being planned for the future, and at every stage in their progress.
CEO and co-founder Riggs Kubiak explained to me that though Honest Buildings was born as a marketplace to match large owners and contractors, they quickly discovered that large portfolio owners care more about managing their jobs than finding new contractors. Today, a client such as Brookfield (which is also an investor, having participated in the startup’s recent Series B round), which according to Kubiak typically spends $400-800 million annually in improvement works across thousands of jobs, will use Honest Buildings to project manage the lot. Each project is managed separately but also as part of a building, which in turn is part of an overall portfolio view. Project plans for the next few months or years can be loaded into the system, ensuring effective forward planning across a myriad of deliverables in the portfolio.
When a project is ready to be tendered out, job RFPs go out to vendors through the Honest Buildings platform. Bids are submitted online and the entire tender process is managed digitally, including requests for information and bid adjustments. Once the contract is awarded, the owners can avail themselves of an anticipated cost report to manage its financials in a digital version. Each row in the system, representing an individual task or trade, is a portal out to the vendor through which communications, payments, change orders and more can be managed.
Because the platform focuses on the owners and their needs, reporting is based on milestones that are significant to them, and the invoicing schedule is built around these milestones. By being mapped digitally, it also ensures the contractor gets paid faster.
I sat down with Granit Gjonbalaj, chief development officer at the We Company – WeWork’s parent company – to discuss the impact that the partnership with Honest Buildings is having on their operations. According to Gjonbalal, “Deploying the Honest Buildings platform across our bidding and delivery process has helped us enormously. It is a one-stop shop that ensures greater transparency across our operations and helps us manage our costs and create budgets more efficiently as well as deliver results in a faster and more cohesive manner.”
The We Company is already using Honest Buildings across its U.S., Canada and Israel portfolio, and will roll the platform out in other markets in the coming weeks and months. Gjonbalaj shared that he is already seeing an impact on efficiencies across the business from using this platform and that there is enormous value to be gained from having full insight on complex, global operations.
Commenting on the partnership, Kubiak told me that “Honest Buildings is thrilled to collaborate with the We Company as it continues its hyper-fast global growth. This partnership is a great example of our team’s collaboration with the largest real estate companies in the world and the fastest growing companies in support of their expansion. We design software to accelerate progress in the built world, empowering teams to manage not only their projects but the capital that funds them.”