Another request to increase building costs for a labor-based service provider? What is this, the third, or fourth, in under two years’ time? How can I possibly support this and maintain my property’s budget?  

In past years, a request for a 3% rate increase was fairly common, some properties simply planned on it in their budgets each year. In more challenging years, maybe the property was asked to approve a 5% increase in order to keep pace with market norms and to ensure their security service provider had the financial resources needed to attract, and retain, the most appropriate talent for the property. 

But the pandemic changed all that, dramatically. Labor resources dwindled due to market and governmental influences, and the pressure on hourly labor, basic supply and demand economics, drove wages up – way up! Over the past two years, security officer wages in Georgia have increased by 15% – 20%, or more. By comparison, according to the Bureau of Labor Statistics, BLS, the Consumer Price Index increased by an average of just 4.65% during the past two years. But that is deceptive as the average CPI increase for 2020 was just 0.6%, while the average CPI increase since July 2021 has been 10.3% (bls.gov). 

So, how is a Commercial Real Estate asset supposed to respond to this? How can operating budgets continue to increase while occupancy dwindles or remains uncertain? That is not a sustainable equation. The solution is to revisit HOW your property is using security officer services and the technology you have in place today. Just because you have always operated with a certain level of on-site security staff does not necessarily mean that is what your property needs today. Your occupancy has perhaps changed, how the asset is being used has perhaps changed, the risks your security program needs to address have perhaps evolved as well. Time for a Security Program Check-Up.  

Program Check-Up 

A Security Program Check-Up should include a fact-based review of incidents and risks experienced by the asset for the past three to five years. A careful evaluation of existing security technology, access control systems, CCTV systems, building and parking facility usage and actual tenant needs, and expectations, should be undertaken. A review of mandated lease provisions stipulating security levels should be completed and fully understood. Can you do more with less and still achieve the Enterprise Security Risk Management (ESRM) objectives for your property, or for your portfolio of properties?  

According to some, we are in the “Fourth Industrial Revolution”; where ‘data is oil’ and the connectivity created by the Internet of Things (IoT) is leading to rapid enhancements in security technology, analytics and AI. Just over a decade ago, building security staff were using VHS tape cassettes in building video recording systems, today, a property manager can view all the cameras on their property from their smartphone at home or while on vacation. It’s time to see what technology can bring to the property to better manage expenses and improve the overall security posture of the property, and the effectiveness of the assigned security staff. Leveraging new and emerging technologies to reduce the reliance on security staffing simply makes sense, financial sense and operational sense.   

If the current building access control and CCTV system is ten years old, or more, its time for a full-scale review. It may be possible to achieve more coverage, more efficiency and better security with an upgrade. Yes, getting Capital Dollars to achieve an upgrade may not be in the budget but a holistic review might result in other savings in maintenance costs or security staffing levels to make an upgrade more practical. In some cases, companies providing the security technology can create a “budget neutral” scenario over a three to five-year period for the property.  

For real estate companies with a portfolio of properties, the ESRM objectives should be evaluated in light of each building need, and the needs of the portfolio. Combining the Security Operation Centers (SOC), or Control Rooms, for multiple properties into one location can often result in an immediate ROI of hundreds of thousands of dollars. For single assets, outsourcing those Control Room functions to a Remote Monitoring company might reduce your costs by 50% or more. Reducing your security staffing levels from two officers on nights or weekends to a single officer supported by a Remote Monitoring Agent might be possible. A Remote Agent can conduct video patrols of the property, use advanced analytics for enhanced detection of suspicious activity and can dispatch on site or nearby patrolling officers to investigate when appropriate. A Program Check-Up should include consideration of some or all of these security technology upgrades: 

• More Effective Camera Systems 
• Utilizing Remote Agents to support the Security Program 
• Deploying Camera Analytics to allow security to focus on actionable events 
• Updating Access Control to Elevators 
• Using Facial Recognition or biometrics in higher security environments 
• Using License Plate Readers (LPRs) to identify when non-registered vehicles enter the garage 
• Deploying the use of Segways as a “force multiplier” so one officer can cover the area of two 
• Remotely monitoring, and controlling, access to an entrance that was previously staffed 
• Using a “Video Concierge” to “staff” a lobby on overnight or weekend schedules 

• Protecting multiple smaller assets with a driving patrol supported by remote monitoring 

Using appropriate building systems technology to better secure access to areas above the ground floor is another way to potentially reduce security labor expenses. Do you have destination elevators now? Card readers controlling access to the elevator or floors above ground level? If so, is the security officer who has historically been nearby to control access still necessary on all schedules? Can they be “replaced” by a Video Concierge? A video monitor that activates when someone approaches and presents a live Agent to interact with and assist the individual approaching a checkpoint or lobby desk? Maybe on the overnight or weekend schedules?  

Think Outside the Box 

At an average wage of $15.00, for every officer you replace with technology there is an immediate ROI of approximately $45,000.00. In larger programs, restructuring your coverage to reduce by three or four officers can free up hundreds of thousands of dollars, more than enough to upgrade wages or upgrade building technology systems. And those are savings that continue well beyond the initial ROI period which adds real value back to the asset.    

It’s time to rethink how we leverage security and technology to support our properties, and the personnel that serve them. Many long-term security programs have existed in their current form without being challenged or revisited for decades. Installing more effective camera systems, combining video surveillance/control room operations, right sizing coverage levels to meet the new property needs in a post-pandemic environment, using current technology to augment or replace the services of on-site security staff, outsourcing low demand schedules to a remote agent, using a combination of remote monitoring and patrol services; all of these are possibilities to better manage operating expenses. Engage your security supplier and challenge them to “think outside the box” or hire a qualified risk assessment professional who can complete this program review for you.  

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