Join us as Thomas Beattie introduces the groundbreaking Eli Report, an AI-powered condo document review platform for real estate professionals. This innovative tool enables users to quickly and efficiently review condo documents by extracting relevant building issues from years of documentation in just minutes.
We also delve into the profound impact of natural disasters, such as wildfires, on insurance strategies, highlighting how communities are adapting to maintain reasonable premiums.
Next, we unravel the financial challenges faced by condo owners in British Columbia, contrasting them with Ontario’s more robust approach. We also introduce a benchmark report designed to enhance the financial planning capabilities of condo boards and property managers.
Finally, we explore the future of smart community living, where technology and AI work together to enhance the living experience for everyone involved.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So you and I are familiar with the same area like
the North Shore.
Yeah, you like it over there.
Yeah, it's a great spot.
You guys have your own policeforce.
That's a good part.
Speaker 2 (00:10):
Wonderful.
I haven't had to interact withthem, thankfully, yeah.
Speaker 1 (00:14):
Well, maybe a little few speed traps here.
It's actually kind ofinteresting.
We went to high school with oneof the West Vancouver police
guys and some of my friendsstill live over there, you know
they've had the pullover andhe's been like, yeah, here's
your warning, here's youranother warning.
(00:35):
But it's cool because it's likea community thing, right, I
mean West Vancouver, northVancouver, you know it's kind of
well, west Van has its ownpolice force.
I think North Van is still RCMP, correct?
I?
Speaker 2 (00:48):
don't know, but all of the North Shore is great.
We've got great schools andclose proximity to the city, so
yeah, that's great Kind of likethe Beverly Hills of Metro
Vancouver, absolutely.
Speaker 1 (01:00):
Yeah that's cool, all right, so today we're going to
talk about your company that youstarted five years ago and the
LE Report.
Yeah, okay, which is very, veryinteresting, and this is going
to be eye-opening, I think, fora lot of people in construction,
you know, realizing what theopportunities are, what kind of
(01:23):
reports you guys make and whatkind of a work pipeline.
The really cool thing isthere's a work pipeline with a
pretty good time horizon inorder to get contracts together,
to get future work together.
So, yeah, I think that's prettycool.
So I think we're going to getinto that.
(01:45):
I think we're in the time ofthe LA wire fires.
It's crazy, I mean, we justseem to everything's kind of.
Have you been watching any ofthat stuff?
Speaker 2 (01:53):
I have.
Actually, I visited a friend inLong Beach just a couple of
weeks ago Before that, beforethat, and yeah, just over the
holidays, and yeah, it's justtragic what's happened down
there.
Obviously, we've seen a lot offires in BC over the past few
years as well, and you knowsignificant impacts from these
(02:13):
natural disasters.
Speaker 1 (02:15):
Yeah, I mean I think you guys from doing depreciation
reports et cetera and then someof it, we also see things where
you know insurance claims keepgoing through, especially in
multifamily.
Yeah, it plays a lot of part indepreciation reports, like how
many times the place has beenflooded, what's that done for?
(02:38):
You know, floor seals, all thatkind of stuff.
Speaker 2 (02:40):
Absolutely.
Water claims were a huge issuefive years ago.
Premiums went crazy.
Deductibles went updramatically.
All these communities wereaffected and it was a twofold
impact on owners because theynot only had their strata
premiums go up here in BritishColumbia, their condo premiums,
but their personal linespolicies went up as well because
the deductible coverage thatthey needed as individual owners
to cover any loss thatoriginated in their unit went up
(03:02):
.
So or any loss that originatedin their unit went up.
So it was a significant changein that space and I think that
the communities are now doing alot better with routine
maintenance to not use theirinsurance policy for some of
that stuff, and it's resulted inbetter behaviors and now
premiums and deductibles aresoftening, which is great for
those communities.
But that's in the face of thesesort of large-scale disasters,
(03:24):
which are obviously quitedifficult to control, although
there are measures that you cantake to slightly reduce your
your fire risk if you are in anarea of heightened activity yeah
, it seems.
Speaker 1 (03:39):
What I find shocking about this whole scenario is,
you know insurance companieslike canceling, you know fire
protection insurance and likecanceling all the stuff prior to
um.
I'm not getting conspiratorialhere.
I guess what I'm just saying isis that if you were to look
that of akin to a lot ofbuildings that you know you see
a lot of flooding going on andit's going down multiple floors.
(04:00):
I have that.
You know we live in Coal Harbor.
We had that One of ourelevators is out because the
28th floor one of thecontractors was heating up some
drywall to make it cure fasterand it didn't catch fire, it
just the heat sensor in thesprinkler went and for 45
(04:23):
minutes all sprinklers in theplace were going.
Oh no, and it went into becausethe way the elevator works is,
it goes up because it's on thetop floor, goes up and it opens
up and it went in and fried thepanel and then took out three to
four floors underneath that.
(04:44):
Unbelievable, unbelievable,right, so I mean.
But the question, I guess whatI'm saying is that you know, I
know we're going to get intoyour realm shortly here, but you
know, when you think of howinsurance companies are just
getting hammered and hammeredand hammered because of these
floods, how much damage itcreates.
At what point are they going tosay, like the wildfire thing,
(05:07):
sorry, these are becoming toomuch of a risk.
No thanks, thanks, but nothanks, I mean it's going to be
interesting.
Speaker 2 (05:13):
they're all about pricing, risk and, um.
You know, we saw deductiblesfor water in these buildings.
Some of them rise from five orten thousand dollars in 2018,
2019, up to I think the highestwe saw in Vancouver was a
million dollars, and that meansthat you've got to have a
million dollar loss before youcan make a claim on your
insurance policy and if you do,your premiums will kind of keep
(05:34):
going up.
Those premiums, thankfully, aresoftening now and many of them
that were between sort of 50 and250,000 over the past three to
five years are starting to comedown and get to the lower end of
that.
Speaker 1 (05:48):
Welcome to the Site, visit Podcast.
Leadership and perspective fromconstruction with your host,
james Falkner.
Speaker 2 (06:00):
Business as usual as it has been for so long now that
it goes back to what we weretalking about before and hitting
the reset button.
You know you read all the books, you read the emails, you read
Scaling Up, you read Good toGreat you know I could go on.
Speaker 1 (06:12):
We've got to a place where we found the secret serum.
We found the secret potion.
We can get the workers in, weknow where to get them.
Speaker 2 (06:21):
One time I was on a job trip for a while and
actually we had a semesterhungry.
Speaker 1 (06:27):
You know, I was down at Dallas and a guy just hit me
up on LinkedIn out of the blueand said he was driving from
Oklahoma to Dallas to meet withme because he heard the favorite
connect platform on your guyspodcast.
And we celebrate these valuesevery single day.
Let's get into your businesshere.
Speaker 2 (06:54):
Great yeah, eli Report.
We came together, our foundingteam, in 2018, and we talked
about how, when you bought aunit in a condo, you really
didn't know much more than whatyou saw within those walls.
You were handed 700, 1,000pages of documents sometimes and
(07:15):
kind of wished good luck.
So typically these are like thestrata minutes.
Speaker 1 (07:19):
Yeah, strata minutes, and that's what you're.
So I went through this about ayear and a half ago, right?
So your realtor has to actuallysift through all this stuff and
they, if you have a goodrealtor, they're going to show
you things, yes, and they'regoing to look at all the
depreciation reports, et cetera,that you need, but you don't
know how detailed they are.
Speaker 2 (07:39):
You don't know how detailed they are.
They're doing their best.
They are industry professionals.
They've got a betterunderstanding of these issues
than a normal buyer.
But yeah, of course they'rebetter informed, they have more
time.
If they've got the luxury to beable to go through everything
in detail.
That's the best case scenarioand we launched as a tool to
help them.
We wanted to help themsummarize the issues that are
(08:00):
affecting a community, from themeeting minutes, from the
engineering studies, from thedepreciation report and the
bylaws and rules for lifestylerestrictions, and that's what
we've been doing.
They've been our main users inBritish Columbia a lot of
lawyers and notaries in otherjurisdictions who are more
involved in that review processthan the realtor, but in British
(08:20):
Columbia it's been mostlyrealtors and they've used it to
get up to speed quickly to helpidentify where they need to
focus their time and theirclients' attention.
And the ELI report's been usedfor that purpose and shared by
realtors with buyers for yearsand it's just a really nice
informative tool that we don'tgive any advice or opinions.
It's all about extracting theinformation and organizing it so
that you have a betterunderstanding.
(08:41):
Okay, this is pretty cool theinformation and organizing it so
that you have a betterunderstanding.
Speaker 1 (08:43):
Okay, this is pretty cool.
Yeah, so the Eli report.
You were saying that the Elipart, sort of the name, came
from every little item.
Yeah, which is pretty cool,because I think it is devils in
the details on this stuff.
It is for sure, and you haveyour octopus kind of icon there.
(09:03):
It's just multiple tentacles.
He's a friendly Eli, thatoctopus.
Speaker 2 (09:05):
Okay, and you have your octopus kind of icon there.
It's just multiple tentacles.
He's a friendly Eli, thatoctopus.
And the idea is, of course,that octopus they're an
intelligent creature.
They've got eight limbs.
Lots of things going on at thesame time.
Speaker 1 (09:14):
There's a lot to pay attention to cuttlefish, which
is similar genus, I think, canchange their color, like to me
that's so weird, mind-blowing,like the fact that it can
emulate the terrain around itand and just blend in just by.
The question is how does itknow?
How does it know?
(09:36):
How does it know that that islike rock over there and that,
like, how does it sense it'salmost as like it's it's got
some other like are we missingsomething?
Speaker 2 (09:44):
they are highly intelligent creatures.
You know, they'll putthemselves in a container and
screw the lid on for safety andthen unscrew it when they can
get out.
It's just yeah.
I think that they're magicalcreatures.
So we have a friendly octopusas our mascot.
Speaker 1 (09:56):
I like it.
Speaker 2 (09:57):
And you know we've been working with a lot of
people over a lot of time.
This five years that we'veoffered Eli Report, we've done
over 25,000 reports across NorthAmerica.
That helps a lot of peopleunderstand their communities
better and it helps usunderstand what's happening in
predominantly the residentialmultifamily world.
Speaker 1 (10:21):
There are commercial stratas and other kind of
corporations that are industrialbut the vast majority are
residential.
So let's just get into somedetail there.
Obviously, we're a constructionpodcast, so we're going to be
looking at what theopportunities are for the
different sub-trades that getinvolved in this stuff from
these reports and what kind ofpipeline for work this can
provide them with you guys.
So who typically pays you guysto do the report?
Speaker 2 (10:45):
it's a buyer, an owner uh strata council or condo
board member or a realtor umlawyers in ontario um are
frequent users and are theseexpensive?
Speaker 1 (10:55):
like how much?
Speaker 2 (10:55):
no, zero to sixty dollars, depending on how many
features you want in it.
Uh, the free one will will usethe existing text layers in the
documents and give you thenatural language right.
And then you know, for twentydollars we do text layers in the
documents and give you thenatural language, and then for
$20, we do text layers oneverything.
For $40, we give you benchmarksthat compare your buildings to
others of the same type and thehighest price point, at $60, is
the one that includes thespecial levy or special
(11:17):
assessment forecast that willtell you when you're going to be
on the hook for about how muchmoney, based on math, and that's
using the latest engineeringstudy, the depreciation report
or reserve study, and theexisting information about how
much money you have in yourreserve fund and how much you're
contributing every year.
So we use basic math to projectwhen you're going to be short,
how much, and we tell you whatfor.
(11:37):
So you might find out thatyou're expecting a $6,000
special levy in 2029 for thewindows and another one in 2033
for the elevator.
So those sorts of things.
And as a result of looking atall of these depreciation
reports, we've got theprojections for thousands of
(11:58):
buildings upcoming capitalprojects.
So we know when there's roofingprojects, when there's siding,
window, plumbing, elevator, fire, safety, parking, anything you
can think of balcony and I thinkthat's where there's a lovely
time because this intelligencethat we garner through Eli
Report, we're putting togetherdata portals as OctoAI that's
(12:22):
our company name to allow thesepeople that serve those
communities to have betterinsights on where those
buildings are, what thoseprojects are, who's managing
them, and the idea is that it'sa win-win for the partners that
we work with and for thecommunities themselves, who
obviously get access to morequotes from experienced service
(12:44):
providers themselves, whoobviously get access to more
quotes from experienced serviceproviders making sure that
they're not going to end uppaying too much by horizon where
(13:04):
, for instance, they'll say,three years from now we're going
to need new windows, let's say,or seals, et cetera between
floors.
Speaker 1 (13:16):
So let's just say that's the deal, okay,
(13:46):
no-transcript, whether or notthere's going to be enough there
or not.
So I think there's someheadwinds there coming for a lot
of condo projects likemultifamily projects here,
undoubtedly so and then on theother side it's like those and
(14:08):
I'm getting into some nuanceshere, but I can only sort of go
from the experience that I'vehad.
We live in a place that has theconcierge and all that kind of
stuff and you have all your feesand it goes up every year.
But I look at all of theexpenses for the building and I
(14:28):
think how is this sustainableover time, like with maintenance
fees going up when it comes inorder to have personnel, for
instance, even a concierge wherethey get paid.
So we're seeing that the worldis getting way more expensive
(14:49):
faster than the strata fees aregoing up.
So what you end up with you endup with these levies are
everywhere and they're hiddeneverywhere and I don't think
people realize.
Speaker 2 (15:03):
Well, last year there were about 100,000 owners in
British Columbia that got hitwith a levy, and this year we
projected the number is going tobe closer to 140,000.
Okay, now, the average amountof that is going to be roughly
$7,500.
So these are huge sums of moneyfor people that are already
putting out significant amountson a monthly basis for those
maintenance fees.
And British Columbia is stilltaking a well, we'll put 10% of
(15:25):
our operating budget intoreserves approach and that's not
reflective of the work thatwill need to be done in each of
these communities.
And Ontario requires fullfunding and you have to every
year say, yeah, we're on trackto have funding for our capital
projects, and sometimes they'restill short, but they do their
best.
British Columbia has taken awe'll pay for it as we go
(15:50):
attitude, and I think that'sjust something that more owners
need to be aware of.
There's a lot of differentopportunities that exist to try
and make life a bit easier forpeople living in these
communities, and so, beyond theEli report, which is a nice go
from zero to one get anunderstanding of a community,
we've developed an annualbenchmark report designed for
condo boards and propertymanagers to take a really deep
dive on that budget.
You've seen it, but what areyou paying versus the buildings
(16:13):
that look most like yours in thelower mainland?
What are the other condos thatare dealing with concierge that
have the same sort of feel asyour building doing, and how can
we get that right?
So, from an operating budgetperspective, the annual
benchmark report is aninteresting tool.
It also highlights the capitalplanning and when you're going
(16:35):
to need to fund these moresignificant projects.
It tells you what your idealreserve fund contributions
should be, so that you don'thave any net levies over the
next 30 years, and tying it backto the construction industry.
It's all about knowing whenthose projects are going to
happen, and some depreciationreports we see now, james, are
(16:56):
still from 2013.
Now the government changed therules in 2024, and everyone's
got to have a report on afive-year cycle starting in the
next couple of years.
And that's great because you'regoing to have a report on a
five-year cycle starting in thenext couple of years, and that's
great because you're going tohave a much clearer picture of
both the costs, which havechanged dramatically since those
estimates were made, as you say, in 2013.
And the timing.
The engineers are professionals.
(17:17):
They have a good sense of theexpected life of an asset, but
when you're taking a report from2013, their assessment of you
potentially needing a new roofhere in 2025, maybe you needed
to do it three years ago.
Maybe it'll be good for anotherfive years.
The fact that you are supposedto do these on a three-year
cycle and now have to do them ona five-year cycle will give
(17:39):
everyone owners, propertymanagers and the construction
companies that serve them whenthey need to do these works much
clearer insights on the timingand cost and scope of those
projects, because when you'rewithin five years, you've kind
of got a tactical horizon.
You know what you need to do inthe near term and that's, I
think, one of the things thatour partners are focusing on
(18:01):
that our partners are focusingon.
Speaker 1 (18:05):
You know, when I think of the particular, it's an
interesting business becauseyou know doing this work,
because there is no generalcontractor, typically, right,
you have a person that it'susually a sub trade of some sort
that is doing this work.
If it's envelope, they're kindof managing the project
themselves and it's asignificant amount of work for
(18:26):
them.
And I think what would beannoying from their point of
view when it comes to stratawork is that everyone gets gamed
on this.
We need three quotes, and I doget that Like when you know,
when a GC puts workout fortender, it's kind of a little
(18:47):
bit different than it is thiswork.
That is like they have tomanage it all and that they know
they're going to spend X amountof time looking through this
and obviously two of them arenot going to get the business.
Yeah, and I think that it's anannoying kind of, because you're
(19:08):
also dealing with differentlevels of strata.
Professionalism, absolutelyRight.
So working for a GC, yeah, sure, there's a big spectrum of how
good GCs are Some pay on time,some don't, et cetera, et cetera
, right, but these stratas it'slike, oh man, some of them have
no idea and then you're going tohave to manage that.
(19:29):
So there's the spectrum ofcomplexity, of how smooth a job
will go is a very rocky terrain,I would say for most work like
this.
Speaker 2 (19:43):
Do you get the sense that some of them shy away from
quoting on strata work becausethey know that?
Speaker 1 (19:49):
it's-.
Speaker 2 (19:49):
I think so yeah and that's unfortunate because then
you end up having stratas thatare served with sometimes padded
quotes.
They know it's not verycompetitive, they don't really
want the work.
Speaker 1 (19:58):
I think that happens a lot.
Speaker 2 (19:59):
And that's unfortunate, because the goal of
getting three quotes is thatyou are supposed to be getting a
good and fair price.
But if the good players arebusy doing high quality work,
getting paid fairly for thoseprojects, and then they declined
a quote on a Strata projectbecause they just know that the
chances are, say, one in three,that's unfortunate.
(20:19):
We really do want to unite thebest companies with those that
need quality service.
Speaker 1 (20:26):
Yeah.
Speaker 2 (20:27):
And I think transparency will help in this
industry a lot and we hopethat's something that we can
help bring.
Speaker 1 (20:36):
So there was in our building the, the hooks had to
be replaced on the roof, yeah,okay, which is, you know,
typically for services on theside of the building window
washes, et cetera, swing stagesand stuff like that and one of
the quotes was one third of theother quotes, wow.
(20:57):
And it was like, okay, why isthis so cheap?
And, of course, the naturalpropensity is to be like, okay,
well, obviously, obviously, youknow, for the, for everyone and
and our budgets.
You know, obviously we're goingto want something as economical
as possible, but to have to gothrough this fear and risk
(21:17):
because very often you knowyou're talking about a strata
council, you are and the stratayears volunteers they're not
getting paid.
They're not getting paid.
They're not getting paid.
Speaker 2 (21:25):
They're not professionals.
They're not professionals.
They do the best they can.
If you're lucky, you've gotsomeone that's got some relevant
workplace experience.
Speaker 1 (21:33):
But the role of that council is a difficult one it is
, and they've got to make thesedecisions.
Well, we just go with thecheapest one.
You got all these voices andyou know.
So I mean I wouldn't, we'd justgo with the cheapest one.
(22:01):
You got all these voices andyou know, so I mean it's kind of
an interesting business, so youknow.
So, with your initiatives thatyou have, obviously you see
these complexities that aregoing on.
You see the opportunities.
Once you guys do these reports,then you and I kind of just, I
think, sort of landed ontogether as a realization is
that, yeah, some of this workmay be not being serviced as
well as it could be because ofthese reasons, absolutely.
And is there an opportunitywith your company, to be able to
(22:22):
create an ecosystem around that?
To level set that a little bit?
Speaker 2 (22:26):
I hope so.
That's one of our priorities.
We want to make life better foreveryone that's living in these
communities and everybodythat's serving them.
And it's difficult because, asyou say and as we've discussed,
strata Council members arevolunteers.
They typically don't have allof the relevant experience to
make these decisions.
They're, in many cases,assisted by a property manager.
Those property managers oftenserve a dozen, sometimes up to
(22:49):
20 different buildings and theydon't actually get paid that
much, and some of them do.
Okay, you can make six figuresas a property manager.
But, with the companies.
But you're right and it's atough place to be, and I would
say that property management isone of the toughest desk jobs
that you could have, and I'm arecovering investment banker, so
(23:11):
if I'm saying that's a toughjob, I think I know it.
You just get an inbox filledwith people that have issues.
You're getting hit with bylawcomplaints, maintenance issues,
staff issues relating toconcierge or to caretakers or
any of your landscaping issues,and you're responsible for
(23:32):
trying to help them redo theirannual insurance policy, manage
building projects, line up thesecapital projects.
It's a lot and I think thatthey're often underappreciated.
I know that there are greatmanagers and there are mediocre
managers, but it's a tough job,and anything we can do to make
sure that they're well-informedand conveying the realities to
(23:53):
the strata council and theowners, I think is good, because
your tendency is to try andmake everyone feel comfortable.
I want them to feeluncomfortable.
I really want people tounderstand what's coming and be
better prepared for that.
So the annual benchmark reportthat we put together, that we're
offering through propertymanagers and to strata councils,
is designed to be the bearer ofthe bad news.
(24:17):
Let me factually show you howyou compare to others and what
the reality looks like for you,so that it's not the property
manager's fault that there's alevy.
You've had 20 years to fundyour roof project.
If you haven't adequately donethat, it's not the fault of the
property manager or necessarilywhoever happens to be on strata
(24:39):
council right now.
It's been a long time coming,so we want to put everyone's
eyes down the road so that theyunderstand their communities
better and can make betterdecisions.
Speaker 1 (24:49):
Wow you know, as you're talking I always say this
on the podcast is my uh wheelsare turning because serving the
kind of uh market that you'reserving and providing that level
of information.
It's usually the other wayaround.
(25:10):
There's usually like propertymanagement services that are on
the top and then they're tryingto come to you or people like
you to get all this kind ofmessy stuff out of the way yeah,
whereas you're coming in theother way, you're going.
Here's all the messy stuff.
This is the first thing.
This is what?
Because everybody iscontributing on a monthly basis
(25:31):
five strata fees by having the Xamount of dollars go into
reserves.
Everyone comes in a buildingevery day.
It gets used.
It's depreciating, whether youlike it or not.
And the opportunity that I seefor you and your company.
You guys have probably alreadythought of all of this, but you
know that the preferred vendorof different subtrades that can
(25:55):
do different things with theirstar rating and those you know
having the pipeline of all thework, having the pipeline of all
the work, and maybe there is a,some kind of a I don't want to
say marketplace, but that's anasty word but there is whether
or not when these reports aredone, whether or not the strata
(26:17):
allows there to be a transfer ofinformation.
they allow that, obviously,because some of this is you know
, a depreciation report is kindof reasonably confidential I
would guess it's not like it'ssomeone's medical records, but
you don't want the whole worldknowing all of this stuff.
(26:38):
But because I think you knowwhat's interesting is that when
I look at you know what'sinteresting is that when I look
at you know property values,especially in a hot market like
Vancouver is, toronto is wherepeople are spending a
significant amount of theirincome on their property.
Their net worth is tied up alot in their property,
(27:00):
absolutely Like I know lots ofpeople in the properties who've
got you know $8 million housesand a lot of their you know
their careers kind of do this,they oscillate, they go through
hard times, good times, all thatstuff.
But that property is that solidthing that's always worth
something.
And down here, you know in thesort of plus million dollar mark
(27:24):
, there's a lot of capital tiedup in that and you know.
You see the property valuations.
We've had our assessmentscoming in through the city for
Vancouver anyway and those werethe BC assessments and you're
seeing the softening.
And also from your opinion, howmuch of that depreciation did
(27:46):
the depreciation reports get tothe city?
Speaker 2 (27:48):
and they no, to my knowledge, they're not being
looked at at scale in the waythat we're starting to look at
them.
Obviously, the engineeringfirms who write them and there
are a dozen firms that do themajority of these reports within
any given province orjurisdiction They'd have a view
on all the ones that they'vedone, but to my knowledge
they're not being used at scaleyet by those that are doing the
(28:11):
assessments, and they should be.
I mean, obviously theassessment authority has an
understanding of you know whenthey were built, the age of
those communities.
They may be informed whencertain projects are done.
Obviously, permits are pulledto do work.
You've got a sense of of thatcommunity.
But to do it at the scale thatwe're doing, where it's granular
, it's building by building andit's updated every three to five
(28:33):
years as these reports getupdated.
Speaker 1 (28:35):
I'm not aware of anyone else doing it and I think
it's important work the reasonI ask is, um, before we were in
the property where now we'relooking at a different one, and
once we got into the detailswith our real estate agent, we
found that it had a hugeassessment coming up like crazy
amount of money, and I think itwas almost a hundred grand per
(29:00):
unit.
Yeah, grand per unit.
Now what's interesting is Iwent and looked at the BC
assessment for the place.
We did get, versus the otherone, similar square footage, and
that one with the $100,000assessment has gone down 100
bucks a square foot.
Speaker 2 (29:20):
Wow.
Speaker 1 (29:21):
So they must know something.
That's cool.
Speaker 2 (29:24):
Well, I'm glad to hear that they do, and we've had
some conversations with theLTSA and the group that helps
provide those assessments andthey're doing really great work
with title and with thebuildings and the valuations.
So I think that there's a lotmore that will continue to
evolve in that space.
But it is interesting youmentioned avoiding one because
you could see this upcoming levythanks to your realtor, which
(29:45):
is fantastic.
We had a similar story.
A realtor came to us a fewmonths ago and he said oh, I
sent my clients the ELA reportand they pulled out.
They didn't want to make anoffer.
They saw a $50,000 levy comingin 2027 and said, no, I'm not
going to proceed.
It was a competitive situation.
And said, no, I'm not going toproceed.
It was a competitive situation.
(30:09):
And my first fear as the CEO ofa company that provides these
reports is did we make a mistake?
Because it's possible.
We've got great technology andwe've got a great admin team
that reviews it.
It's a combination of AI andhuman review, but mistakes could
be possible.
Anyway, I took a quick look.
No errors were made.
We stand by our projection.
It's all based on math.
It's based on the engineer.
I don't have any opinions.
(30:29):
Ai is not guessing when it'shappening, it's just math.
But I said, no, that's a thing.
I think you've done a goodthing for your client here.
Talk to them about it andexplain what's happening here.
And anyway, he found themanother place within two weeks
and they were very happy thatthey were not facing that kind
(30:49):
of upcoming levy and I'mdelighted to hear that your
agent went through that for you.
Speaker 1 (30:54):
Yeah, it's my sister.
That's the good part.
She was awesome.
Well, that is so lucky.
No pressure, right?
Yeah, no pressure.
Yeah, dealing with the littlebrother Damn, yeah.
So where do you see this, yourindustry, going in the next,
let's say, five years?
(31:15):
I mean, you're using AI toolsnow for the analysis.
Yeah, do you see thesubcontractor being more
connected via your platform?
Speaker 2 (31:27):
Oh, absolutely yes.
So all sorts of vendors tothese communities some are
already working with inlandscaping, exterior cleaning,
concierge you look at those sortof operating budget line items.
It's helping them qualifyquotes so that they know before
they go to site approximatelywhat they should be looking at.
And it's helping them get inthere and provide a competitive
(31:50):
quote to try and win.
And it's a real mutual winbecause the owners in that
community are going to getbetter service, better price or
both, but they'll stick withtheir incumbent.
So this is saving everyone time.
It's helping them grow theirbusiness.
It's helping them leverage therelationships they may have with
property management firms, withindividual managers.
(32:11):
You can now see the otherbuildings that those individuals
or those companies are managing.
So I think that anytime you'reable to shed light at scale,
with data, onto problems, youcan come up with value and
solutions for everyone.
So that's what we're all aboutmutual wins.
Speaker 1 (32:33):
So if, let's say, an envelope contractor reaches out
to you guys and says this is thekind of work we do typical
high-rises, complicated work,swing stage stuff kind of work
we do, you know, typical highrises, complicated work, swing
stage stuff mostly that toessentially to mitigate having
to put the entire green screenor blue screen that they have
netting, they have to put oneverything.
(32:54):
That's a pain in the ass,especially when a lot of places
are buying the view right andthey don't have it for 18 months
.
It's terrible.
So what can that contractor doyou know, reaching out to you
guys like, what is it ideally?
What kind of email inboundemails do you want?
Phone calls, et cetera fromsub-trades that are good at what
(33:16):
they do?
Speaker 2 (33:17):
I want to hear from them.
You know which communities theyserve, the types of work that
they do, the types of buildingsthat they want, and we use AWS
QuickSight, which is an onlineportal system, to provide them
with access to the intelligencethat they're looking for.
So they'll get only the citiesthey want, only the building
types they want and only theinsights on the capital projects
(33:39):
that they're interested indoing and that allows us to
price it economically.
It allows these communities toget these quotes from
experienced, qualifiedprofessionals.
Speaker 1 (33:50):
That's cool.
So are you guys going to be?
Are you going to think you'redoing marketplace kind of thing
or not in marketplace, but morelike?
Speaker 2 (33:57):
There are existing companies that are kind of
involved in the procurementprocess, and that's not so much
what we're doing.
We're condo intelligence, sowe're providing insights and
intelligence for communities,property managers, strata
councils, condo boards, ownersand now those that serve them,
and that's where we seeourselves within the ecosystem.
I think that between the majorproperty management firms,
(34:19):
existing tools and the existingplayers that are in that
procurement space, that's wellcovered and I don't need to kind
of tread on their toes.
Speaker 1 (34:28):
Which ones are those procurement ones?
Speaker 2 (34:30):
Like Vendor, pm is a good example, so that's one
that's been set up a number ofyears ago.
It's another prop tech startup.
They raised several milliondollars and have been trying to
solve that problem, bringingtogether trades quotes with
these communities and you know,you say, oh, we need the three
quotes.
Well, they're insertingthemselves into that process and
(34:50):
serving a lot of propertymanagement firms.
Others have their own in-housetools, are you?
Speaker 1 (34:54):
guys connected with those guys at all.
Speaker 2 (34:56):
Yeah, I mean we know Emil Brill, who's the founder of
Vendor PM, and it's been awhile since we spoke.
We've got obviously more incommon now than we did several
years ago, so it'd be worthreconnecting, that's cool.
Speaker 1 (35:09):
So what do you see coming down?
The, the, what.
What headwinds do you do youthink there are for this kind of
work for condo owners right now, like what do they need to be
wary of?
Speaker 2 (35:27):
What kind of worries you about the market et cetera?
There's a lot to be worriedabout if you're a condo owner.
I think being aware of yourcommunity's future is really
important, and I say that as anowner and as a buyer.
Speaker 1 (35:39):
Can you be more specific when you say
community's?
Speaker 2 (35:40):
future.
I mean the physical andfinancial health of your
community.
I think too many of us arecomplacent.
We see the day-to-day stuff butwe're not necessarily aware of
those bigger projects.
Your sister's saying there's a$100,000 project coming down is
something that many owners inthat building may not be that
familiar with If it hasn't beentabled in their AGM, meaning
(36:04):
it's happening in the next yearor two and they're starting to
talk about that special levy.
Many of those owners might notbe well informed and when you're
talking about anything of thatmagnitude it's a significant
life impact.
You know you're eitherremortgaging, adding on a line
of credit.
(36:24):
Most of us don't have $100,000sitting around for a capital
project in their community, andso that's what keeps me up at
night.
I talk a lot about the fact thatwe're not properly funding our
reserves in this province.
Many jurisdictions in NorthAmerica find themselves in the
same situation.
You're seeing a lot of noiseout of Florida.
Obviously in the wake of theSurfside tragedy a couple of
(36:46):
years ago, where a condobuilding half collapsed, they
started requiring morestructural assessments of other
communities.
Some of those communities haveidentified issues.
Some owners are being told thatthey need to come up with a
quarter million dollars formajor structural works and they
can't afford it.
So I think that when you comeand look at the condo landscape
(37:07):
across North America, that's thething that keeps me up at night
if I'm a condo owner.
I think if I'm somebody that'sserving these communities, we
really need to get betterorganized and make sure that
these communities understandwhat's coming and manage those
projects efficiently,effectively and productively.
Speaker 1 (37:25):
Okay, so what do you think about the inflation versus
strategies?
Speaker 2 (37:36):
um, inflation is very real.
Um, you know, I I rememberhearing the word transitory and
shaking my head because, youknow, you just knew it wasn't
not in the sense that they weretrying to describe it.
Now it's returned to whatappears to be a more normal
level, but, conveniently, whenit comes to major costs, um,
(37:57):
operating these buildings, Ithink that the true inflation
rate for condo owners is higherthan the stated inflation rates.
Exactly, yeah, and that'ssomething that we've all got to
be aware of and plan for.
I see some stratas triumphantlydeclare that they're you know,
they haven't raised condo feesin three years and I'm going.
(38:18):
Well, you're just robbingyourself here, because if you're
not, if you're not settingaside more money for everything
else, you're cutting somethingalong the way and maybe it's
something you can live without.
Maybe you've managed to reduceyour landscaping budget, maybe
you've managed to make it withone less shift on your concierge
, but if it hasn't been aconscious choice, then the costs
(38:44):
and the deferred maintenancethat you're putting onto your
community by trying to falselycap your fees is just putting
that burden on the future.
So that's one of the realitiesthat we are all seeing them face
with.
Speaker 1 (38:59):
Yeah, and also in the aging population in some of
these buildings that cannotafford an increase.
So there's a community side ofthings where, um, you know, I
can think of some people if Iwere to suggest, hey, let's put
(39:20):
our strategy up, even bysomething small like 50 bucks,
yeah, okay, it'll make a hugedifference.
You know, together it's a smallboutique building so you're
like, okay, well, what's thisreally, what's this really going
to do?
Is what they would say Say well, it's every month, it's all
year and it'll make a bigdifference.
So, but the reality is, is thatthe amount, of like, when
(39:48):
minimum wage goes upsignificantly and then trade
costs go up everything, as younailed it there a couple of
minutes ago, is the actualstated inflation rate you hear
in the news, is not the actualincrease of costs that you see
on the ground level.
It's like a crazy amount.
(40:08):
Sometimes it's an inflationrate of X and then you've got an
inflation rate of 25% on thereality of life, yeah.
So that's pretty crazy, right?
So, yeah, can I ask you aquestion Is there any AI systems
that you have seen that replacethese expensive property
(40:31):
management firms?
Speaker 2 (40:33):
You know, I think it's all about incremental gains
and efficiencies.
I'm an advisory board member ofa firm called Strata Press,
which allows communities tomanage and organize their
documents, whether they'reself-managed or whether they
have a property management firm,and the work that Sean Jordan
is doing there, I think, isquite impressive.
It's not going to replace amanager, it's going to help them
(40:56):
be better at their jobs.
If you can streamline theprocess for issuing a bylaw
notice, if you can make iteasier for an owner to
understand what their bylaws areand what type of pet they're
allowed to have without havingto email the property manager,
then they can be more efficient.
And there are AI tools.
There are great system toolsbeing built by the plethora of
(41:17):
companies that are like StrataPress across North America that
are making life easier andbetter.
To afford them purely becauseyour, your strata council or
your condo board is comprised ofvolunteers, and having someone
(41:39):
that has the experience, thathas that professionalism, that
has a network and a systemaround them that can help them
navigate the complex issues thataffect every community, that's
a good thing.
So I'm hoping that technologyand AI makes everyone more
efficient, it makes them better,it allows as the number of
condo buildings continues toexpand and the number of
(42:01):
property managers is treadingwater at best.
We read about shortages ofproperty managers every year and
I think, as the number of condobuildings continue to increase,
they've got to be able to servemore communities, or more
communities are going to end upself-managed.
And I know that that's somethingthat gets, you know, a bit of
coverage as well.
Speaker 1 (42:21):
Well, I think the big delta of any building is the
old building manager.
Not property manager, butbuilding manager, the person
that's if the gate's stuck or if, like you know, something's
going on that a third-partyproperty management company you
(42:45):
know, is an email or a phoneaway and miles away to be able
to deal with something immediate.
And then you know so that to methere's that huge Delta problem
that I think a lot of buildingsare going to be in where you
know, on the paperwork side ofthings, this is planning, this
is you know, all that kind ofthat stuff Big picture but yeah,
(43:05):
big picture stuff, that's great, but like the nuances of daily,
there's something every day,every day, absolutely Every day.
That's going on.
Speaker 2 (43:12):
And as you say that Now, concierges are having to do
it, that building manager, thatsuperintendent, that person
that's been there for 20 plusyears, who knows exactly why
this door gets stuck or whythere's water seeping into this
particular place.
That intelligence is somethingthat does get lost if not
transferred, and I know someonewho's had that exact situation.
(43:39):
The guy's been there for nearly30 years.
He's retiring.
They're in a panic.
They need all of that knowledgepassed on before his retirement
and I think that, yeah, thaton-site expertise is important.
Obviously, fresh eyes can begood too, instead of ignoring or
knowing how to just avoid aproblem for a long time.
Fresh ice can solve a problemrather than just tend to it, but
(44:01):
, yeah, I agree.
Speaker 1 (44:06):
I mean this is a luxury problem, but I've noticed
in my building that all thereplacement light bulbs are not
the same Kelvin.
Speaker 2 (44:22):
And I'm like it pisses me off because I'm like
what the hell it's not adentist's office.
They're different whites, yeah.
Speaker 1 (44:29):
So one's 2,700, the other one's 4,000.
I'm like, whose job is it?
Yeah, somebody has to get thatright.
Speaker 2 (44:42):
But the thing is, I don't think it's anyone's job.
Speaker 1 (44:46):
Well, you've got to make the noise about it, because
I agree, this is a highlyirritating luxury problem?
Speaker 2 (44:51):
Yes, but it is highly irritating and we talk a lot
about different things.
You know we have insights toall these different budget line
items and one of them is the gas, the electricity, the water and
sewer bills and whether you'vegot high gas consumption and you
could look at shifting towardsa heat pump solution, whether
you are using a lot ofelectricity relative to other
buildings and you might consideran LED lighting project or some
(45:12):
other efficiency upgrades.
Consider an LED lightingproject or some other efficiency
upgrades.
Those are the times when youget to make those conscious
decisions and somebody'sdeciding which bulbs to replace
and obviously you've gotlighting of different styles and
different ballasts anddifferent fixtures and, yeah,
that decision has to be made.
I don't know what to tell youin your personal situation.
(45:33):
I can tell you I'd go down tothe hardware store and change
that bulb myself because thatwould just drive me nuts and
it's just not going to rank on aproperty manager or strata
council's list of priorities.
Speaker 1 (45:45):
It won't because it has to be at the next AGM or
something and it's like a yearlater they're going to be
dealing with light bulbs,absolutely.
Speaker 2 (45:51):
And let me just say for the record that I'm only
suggesting a light bulb.
You are not allowed to do anyelectrical work in your strata
building.
You need to be a licensedprofessional to do that.
So when I talk about, you knowthe Kelvin issue.
It's merely changing a bulb.
Speaker 1 (46:06):
Yeah, yeah, interesting, okay, all right, so
what?
Speaker 2 (46:14):
else is happening.
You know we're looking at thefuture of smart buildings and
smart communities.
How can people get moreefficient?
What can they do that will maketheir communities better for
the longer term and morecomfortable for them?
You know a lot of the buildingsin Vancouver were kind of a
unique situation in NorthAmerica.
Is that when they were built,there's no air conditioning.
Is that when they were builtthere's no air conditioning and,
(46:35):
depending on the year, yourcommunity and depending on your
aspect if you're south-facing,your unit might get
uncomfortably warm for aprotracted period during the
summer.
So finding ways to accommodateheat pumps and other
energy-efficient ways to makeyour living space more
(46:57):
comfortable, I think, is animportant issue.
There's been more discussionabout that and lightening of the
rules to make it easier forpeople to make their living
space more comfortable.
We've obviously seen a big pushby the government with the
electrical planning reports.
They want more electric vehiclesupport, more ev charging.
(47:19):
I think that that's a greatinnovation, and I think we
talked about insurance premiumsand deductibles earlier.
There are some great solutionsout there that will help you
manage and mitigate losses andto manage some of your utility
bills.
So one solution is putting in apressure gauge right where your
meter is to prevent you frompaying for air bubbles in your
(47:41):
water supply.
It's actually a big deal andsome companies out there will
save 10 to 15% of your annualwater and sewer bill, which can
be a significant line item.
And then you've got theinsurance side where with, for
example, bfl's FlowGuard program, if you put in and have
sprinkler systems and if you'vegot smart water shutoffs, you
save money on your premiumsevery year.
So these investments in smarterhome solutions are allowing
(48:05):
owners to make savings on arecurring basis.
So those are all things that Ithink are being discussed and
are important and are reflectiveof the future of community
living.
Speaker 1 (48:17):
So, whether you're an HVAC company that's looking to
serve these communities, orwhether you're looking at some
of their bigger capital projectsnew, more energy efficient
window installation and newsiding and insulation all of
those things I think are are big, um big priorities for these
communities so in the uh, in thepacific north coast here, or
(48:39):
pacific north northwest, um,specifically, um, we see a huge
issue with the west, south,southwest sides of the buildings
, absolutely, and the other, sothe other side has like a algae
not algae, but on the dark sideyeah, you've got algae moss.
(49:02):
On the moss, exactly Moss andmold on the northeast sides and
then totally baked on thesouthwest sides.
Yeah, yeah.
So that's got to be like howmuch, like from the envelope
(49:25):
point of view of like windowseals and all that kind of stuff
that get heated to the like?
Speaker 2 (49:27):
are we seeing this seasonal, like summers are?
Speaker 1 (49:28):
getting really hot?
Yes, like is this a climatechange thing, do you think?
Speaker 2 (49:30):
I think weather is a thing Without you being
political, without getting toopolitical about it, I think
weather is just a thing.
Weather is and there arefluctuations over time, but
we're in a period now wheresummers can get better.
Are we having an impact?
Yeah, I mean there are impacts,but I think that the challenges
that these communities face areobviously how do you adequately
maintain buildings where theweather seals are getting cooked
on one side and they're coveredin moss on the other?
(49:52):
I think that's an issue that Ithink is widespread across the
Northwest and I'm sure that manyof your customers and clients
would know how to handle that.
I see it as you do.
I lived in Coal Harbor myselfand I faced west, and that
little unit got hot even 20years ago.
(50:13):
So that building had central ACbut none in the units.
So you know that was an issueeven 20 years ago.
Speaker 1 (50:26):
What was the reason most air con was not put in?
Speaker 2 (50:30):
I mean, it was just something that we didn't think
we needed.
Speaker 1 (50:33):
You know, we kind of thought that we were temperate.
Speaker 2 (50:36):
I certainly think it wasn't as hot and we were not
living in the same concentrationwithin condo buildings.
You know, you look back 40years.
The number of people living incondos were less than 10%.
Well, now, across North America, nearly one in three people
lives in some sort ofmultifamily community, whether
it be a gated community in HOAor in a condo of some
(50:58):
description, townhouse, duplex,et cetera.
And the more concentrated youare in your living environment,
the less you have airflow tohelp you regulate temperatures.
And I think, at any case, whereyou find yourself in an
environment where you areconstrained, having some sort of
air con or improved HVACsolution is more essential.
(51:23):
So I think we've got a lot morepeople dealing with the problem
now than we had a generationago, and I think that that is
definitely a part of it.
And certainly some hot spellsmight be getting more common
than they were a generation agoas well.
But making your livingenvironment more comfortable,
given the cost of real estate, Ithink is entirely reasonable.
(51:43):
Out of all the work I had tospend on my non-strata row house
when we moved in, the best$15,000 was on a heat pump
system that makes it morecomfortable all year round a
heat pump system that makes itmore comfortable all year round,
especially that top floor whichonly had electric baseboards,
like so much of the detachedhomes in the Pacific Northwest.
You might have had forced airon your lower floors, but your
(52:05):
top was only electric heat, andfor us, having the ability for
the heat pump to provide heat inthe winter and cool in the
summer makes that homeimmeasurably more livable, and I
love mine.
So I'm not an HVAC salesperson,but I appreciate the value of a
good heat pump.
Speaker 1 (52:26):
Nice, all right.
Well, this has been prettyawesome to listen about your
company.
So just so people can listen toit, the value there there can
be getting.
So someone can come to you guyseither a strata can or somebody
looking at a property orsomebody trying to figure out
what to do with their propertyor whatever it is, you can get a
a report from you guys, yeah.
Speaker 2 (52:48):
Eli report gets you up to speed, annual benchmark
report helps you make budgetcapital planning decisions.
And then OctoAI is providinggreater condo intelligence for
everyone that serves andsupports those industries and
all of those condo owners.
So, whether you're a propertymanagement company, whether
you're a construction company,you're involved with any aspect
(53:10):
of multifamily residential andserving them, then I think that
there's an opportunity for us todo some things together that
will bring those mutual wins toeveryone in the ecosystem.
All right, well, this has beenawesome.
Thank you so much for having me.
Speaker 1 (53:25):
Good luck with everything.
Thanks, awesome, thanks, man.
Well, that does it for anotherepisode of the Site Visit.
Thank you for listening.
Be sure to stay connected withus by following our social
accounts on Instagram andYouTube.
You can also sign up for ourmonthly newsletter at
sitemaxsystemscom slash, thesite visit, where you'll get
(53:46):
industry insights, pro tips andeverything you need to know
about the Site Visit podcast andSiteMax, the job site and
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contractors in North America andbeyond.
Sitemax is also the engine thatpowers this podcast.
All right, let's get back tobuilding.
So you and I are familiar with the same area like
the North Shore.
Yeah, you like it over there.
Yeah, it's a great spot.
You guys have your own policeforce.
That's a good part.
Speaker 2 (00:10):
Wonderful.
I haven't had to interact withthem, thankfully, yeah.
Speaker 1 (00:14):
Well, maybe a little few speed traps here.
It's actually kind ofinteresting.
We went to high school with oneof the West Vancouver police
guys and some of my friendsstill live over there, you know
they've had the pullover andhe's been like, yeah, here's
your warning, here's youranother warning.
(00:35):
But it's cool because it's likea community thing, right, I
mean West Vancouver, northVancouver, you know it's kind of
well, west Van has its ownpolice force.
I think North Van is still RCMP, correct?
I?
Speaker 2 (00:48):
don't know, but all of the North Shore is great.
We've got great schools andclose proximity to the city, so
yeah, that's great Kind of likethe Beverly Hills of Metro
Vancouver, absolutely.
Speaker 1 (01:00):
Yeah that's cool, all right, so today we're going to
talk about your company that youstarted five years ago and the
LE Report.
Yeah, okay, which is very, veryinteresting, and this is going
to be eye-opening, I think, fora lot of people in construction,
you know, realizing what theopportunities are, what kind of
(01:23):
reports you guys make and whatkind of a work pipeline.
The really cool thing isthere's a work pipeline with a
pretty good time horizon inorder to get contracts together,
to get future work together.
So, yeah, I think that's prettycool.
So I think we're going to getinto that.
(01:45):
I think we're in the time ofthe LA wire fires.
It's crazy, I mean, we justseem to everything's kind of.
Have you been watching any ofthat stuff?
Speaker 2 (01:53):
I have.
Actually, I visited a friend inLong Beach just a couple of
weeks ago Before that, beforethat, and yeah, just over the
holidays, and yeah, it's justtragic what's happened down
there.
Obviously, we've seen a lot offires in BC over the past few
years as well, and you knowsignificant impacts from these
(02:13):
natural disasters.
Speaker 1 (02:15):
Yeah, I mean I think you guys from doing depreciation
reports et cetera and then someof it, we also see things where
you know insurance claims keepgoing through, especially in
multifamily.
Yeah, it plays a lot of part indepreciation reports, like how
many times the place has beenflooded, what's that done for?
(02:38):
You know, floor seals, all thatkind of stuff.
Speaker 2 (02:40):
Absolutely.
Water claims were a huge issuefive years ago.
Premiums went crazy.
Deductibles went updramatically.
All these communities wereaffected and it was a twofold
impact on owners because theynot only had their strata
premiums go up here in BritishColumbia, their condo premiums,
but their personal linespolicies went up as well because
the deductible coverage thatthey needed as individual owners
to cover any loss thatoriginated in their unit went up
(03:02):
.
So or any loss that originatedin their unit went up.
So it was a significant changein that space and I think that
the communities are now doing alot better with routine
maintenance to not use theirinsurance policy for some of
that stuff, and it's resulted inbetter behaviors and now
premiums and deductibles aresoftening, which is great for
those communities.
But that's in the face of thesesort of large-scale disasters,
(03:24):
which are obviously quitedifficult to control, although
there are measures that you cantake to slightly reduce your
your fire risk if you are in anarea of heightened activity yeah
, it seems.
Speaker 1 (03:39):
What I find shocking about this whole scenario is,
you know insurance companieslike canceling, you know fire
protection insurance and likecanceling all the stuff prior to
um.
I'm not getting conspiratorialhere.
I guess what I'm just saying isis that if you were to look
that of akin to a lot ofbuildings that you know you see
a lot of flooding going on andit's going down multiple floors.
(04:00):
I have that.
You know we live in Coal Harbor.
We had that One of ourelevators is out because the
28th floor one of thecontractors was heating up some
drywall to make it cure fasterand it didn't catch fire, it
just the heat sensor in thesprinkler went and for 45
(04:23):
minutes all sprinklers in theplace were going.
Oh no, and it went into becausethe way the elevator works is,
it goes up because it's on thetop floor, goes up and it opens
up and it went in and fried thepanel and then took out three to
four floors underneath that.
(04:44):
Unbelievable, unbelievable,right, so I mean.
But the question, I guess whatI'm saying is that you know, I
know we're going to get intoyour realm shortly here, but you
know, when you think of howinsurance companies are just
getting hammered and hammeredand hammered because of these
floods, how much damage itcreates.
At what point are they going tosay, like the wildfire thing,
(05:07):
sorry, these are becoming toomuch of a risk.
No thanks, thanks, but nothanks, I mean it's going to be
interesting.
Speaker 2 (05:13):
they're all about pricing, risk and, um.
You know, we saw deductiblesfor water in these buildings.
Some of them rise from five orten thousand dollars in 2018,
2019, up to I think the highestwe saw in Vancouver was a
million dollars, and that meansthat you've got to have a
million dollar loss before youcan make a claim on your
insurance policy and if you do,your premiums will kind of keep
(05:34):
going up.
Those premiums, thankfully, aresoftening now and many of them
that were between sort of 50 and250,000 over the past three to
five years are starting to comedown and get to the lower end of
that.
Speaker 1 (05:48):
Welcome to the Site, visit Podcast.
Leadership and perspective fromconstruction with your host,
james Falkner.
Speaker 2 (06:00):
Business as usual as it has been for so long now that
it goes back to what we weretalking about before and hitting
the reset button.
You know you read all the books, you read the emails, you read
Scaling Up, you read Good toGreat you know I could go on.
Speaker 1 (06:12):
We've got to a place where we found the secret serum.
We found the secret potion.
We can get the workers in, weknow where to get them.
Speaker 2 (06:21):
One time I was on a job trip for a while and
actually we had a semesterhungry.
Speaker 1 (06:27):
You know, I was down at Dallas and a guy just hit me
up on LinkedIn out of the blueand said he was driving from
Oklahoma to Dallas to meet withme because he heard the favorite
connect platform on your guyspodcast.
And we celebrate these valuesevery single day.
Let's get into your businesshere.
Speaker 2 (06:54):
Great yeah, eli Report.
We came together, our foundingteam, in 2018, and we talked
about how, when you bought aunit in a condo, you really
didn't know much more than whatyou saw within those walls.
You were handed 700, 1,000pages of documents sometimes and
(07:15):
kind of wished good luck.
So typically these are like thestrata minutes.
Speaker 1 (07:19):
Yeah, strata minutes, and that's what you're.
So I went through this about ayear and a half ago, right?
So your realtor has to actuallysift through all this stuff and
they, if you have a goodrealtor, they're going to show
you things, yes, and they'regoing to look at all the
depreciation reports, et cetera,that you need, but you don't
know how detailed they are.
Speaker 2 (07:39):
You don't know how detailed they are.
They're doing their best.
They are industry professionals.
They've got a betterunderstanding of these issues
than a normal buyer.
But yeah, of course they'rebetter informed, they have more
time.
If they've got the luxury to beable to go through everything
in detail.
That's the best case scenarioand we launched as a tool to
help them.
We wanted to help themsummarize the issues that are
(08:00):
affecting a community, from themeeting minutes, from the
engineering studies, from thedepreciation report and the
bylaws and rules for lifestylerestrictions, and that's what
we've been doing.
They've been our main users inBritish Columbia a lot of
lawyers and notaries in otherjurisdictions who are more
involved in that review processthan the realtor, but in British
(08:20):
Columbia it's been mostlyrealtors and they've used it to
get up to speed quickly to helpidentify where they need to
focus their time and theirclients' attention.
And the ELI report's been usedfor that purpose and shared by
realtors with buyers for yearsand it's just a really nice
informative tool that we don'tgive any advice or opinions.
It's all about extracting theinformation and organizing it so
that you have a betterunderstanding.
(08:41):
Okay, this is pretty cool theinformation and organizing it so
that you have a betterunderstanding.
Speaker 1 (08:43):
Okay, this is pretty cool.
Yeah, so the Eli report.
You were saying that the Elipart, sort of the name, came
from every little item.
Yeah, which is pretty cool,because I think it is devils in
the details on this stuff.
It is for sure, and you haveyour octopus kind of icon there.
(09:03):
It's just multiple tentacles.
He's a friendly Eli, thatoctopus.
Speaker 2 (09:05):
Okay, and you have your octopus kind of icon there.
It's just multiple tentacles.
He's a friendly Eli, thatoctopus.
And the idea is, of course,that octopus they're an
intelligent creature.
They've got eight limbs.
Lots of things going on at thesame time.
Speaker 1 (09:14):
There's a lot to pay attention to cuttlefish, which
is similar genus, I think, canchange their color, like to me
that's so weird, mind-blowing,like the fact that it can
emulate the terrain around itand and just blend in just by.
The question is how does itknow?
How does it know?
(09:36):
How does it know that that islike rock over there and that,
like, how does it sense it'salmost as like it's it's got
some other like are we missingsomething?
Speaker 2 (09:44):
they are highly intelligent creatures.
You know, they'll putthemselves in a container and
screw the lid on for safety andthen unscrew it when they can
get out.
It's just yeah.
I think that they're magicalcreatures.
So we have a friendly octopusas our mascot.
Speaker 1 (09:56):
I like it.
Speaker 2 (09:57):
And you know we've been working with a lot of
people over a lot of time.
This five years that we'veoffered Eli Report, we've done
over 25,000 reports across NorthAmerica.
That helps a lot of peopleunderstand their communities
better and it helps usunderstand what's happening in
predominantly the residentialmultifamily world.
Speaker 1 (10:21):
There are commercial stratas and other kind of
corporations that are industrialbut the vast majority are
residential.
So let's just get into somedetail there.
Obviously, we're a constructionpodcast, so we're going to be
looking at what theopportunities are for the
different sub-trades that getinvolved in this stuff from
these reports and what kind ofpipeline for work this can
provide them with you guys.
So who typically pays you guysto do the report?
Speaker 2 (10:45):
it's a buyer, an owner uh strata council or condo
board member or a realtor umlawyers in ontario um are
frequent users and are theseexpensive?
Speaker 1 (10:55):
like how much?
Speaker 2 (10:55):
no, zero to sixty dollars, depending on how many
features you want in it.
Uh, the free one will will usethe existing text layers in the
documents and give you thenatural language right.
And then you know, for twentydollars we do text layers in the
documents and give you thenatural language, and then for
$20, we do text layers oneverything.
For $40, we give you benchmarksthat compare your buildings to
others of the same type and thehighest price point, at $60, is
the one that includes thespecial levy or special
(11:17):
assessment forecast that willtell you when you're going to be
on the hook for about how muchmoney, based on math, and that's
using the latest engineeringstudy, the depreciation report
or reserve study, and theexisting information about how
much money you have in yourreserve fund and how much you're
contributing every year.
So we use basic math to projectwhen you're going to be short,
how much, and we tell you whatfor.
(11:37):
So you might find out thatyou're expecting a $6,000
special levy in 2029 for thewindows and another one in 2033
for the elevator.
So those sorts of things.
And as a result of looking atall of these depreciation
reports, we've got theprojections for thousands of
(11:58):
buildings upcoming capitalprojects.
So we know when there's roofingprojects, when there's siding,
window, plumbing, elevator, fire, safety, parking, anything you
can think of balcony and I thinkthat's where there's a lovely
time because this intelligencethat we garner through Eli
Report, we're putting togetherdata portals as OctoAI that's
(12:22):
our company name to allow thesepeople that serve those
communities to have betterinsights on where those
buildings are, what thoseprojects are, who's managing
them, and the idea is that it'sa win-win for the partners that
we work with and for thecommunities themselves, who
obviously get access to morequotes from experienced service
(12:44):
providers themselves, whoobviously get access to more
quotes from experienced serviceproviders making sure that
they're not going to end uppaying too much by horizon where
(13:04):
, for instance, they'll say,three years from now we're going
to need new windows, let's say,or seals, et cetera between
floors.
Speaker 1 (13:16):
So let's just say that's the deal, okay,
(13:46):
no-transcript, whether or notthere's going to be enough there
or not.
So I think there's someheadwinds there coming for a lot
of condo projects likemultifamily projects here,
undoubtedly so and then on theother side it's like those and
(14:08):
I'm getting into some nuanceshere, but I can only sort of go
from the experience that I'vehad.
We live in a place that has theconcierge and all that kind of
stuff and you have all your feesand it goes up every year.
But I look at all of theexpenses for the building and I
(14:28):
think how is this sustainableover time, like with maintenance
fees going up when it comes inorder to have personnel, for
instance, even a concierge wherethey get paid.
So we're seeing that the worldis getting way more expensive
(14:49):
faster than the strata fees aregoing up.
So what you end up with you endup with these levies are
everywhere and they're hiddeneverywhere and I don't think
people realize.
Speaker 2 (15:03):
Well, last year there were about 100,000 owners in
British Columbia that got hitwith a levy, and this year we
projected the number is going tobe closer to 140,000.
Okay, now, the average amountof that is going to be roughly
$7,500.
So these are huge sums of moneyfor people that are already
putting out significant amountson a monthly basis for those
maintenance fees.
And British Columbia is stilltaking a well, we'll put 10% of
(15:25):
our operating budget intoreserves approach and that's not
reflective of the work thatwill need to be done in each of
these communities.
And Ontario requires fullfunding and you have to every
year say, yeah, we're on trackto have funding for our capital
projects, and sometimes they'restill short, but they do their
best.
British Columbia has taken awe'll pay for it as we go
(15:50):
attitude, and I think that'sjust something that more owners
need to be aware of.
There's a lot of differentopportunities that exist to try
and make life a bit easier forpeople living in these
communities, and so, beyond theEli report, which is a nice go
from zero to one get anunderstanding of a community,
we've developed an annualbenchmark report designed for
condo boards and propertymanagers to take a really deep
dive on that budget.
You've seen it, but what areyou paying versus the buildings
(16:13):
that look most like yours in thelower mainland?
What are the other condos thatare dealing with concierge that
have the same sort of feel asyour building doing, and how can
we get that right?
So, from an operating budgetperspective, the annual
benchmark report is aninteresting tool.
It also highlights the capitalplanning and when you're going
(16:35):
to need to fund these moresignificant projects.
It tells you what your idealreserve fund contributions
should be, so that you don'thave any net levies over the
next 30 years, and tying it backto the construction industry.
It's all about knowing whenthose projects are going to
happen, and some depreciationreports we see now, james, are
(16:56):
still from 2013.
Now the government changed therules in 2024, and everyone's
got to have a report on afive-year cycle starting in the
next couple of years.
And that's great because you'regoing to have a report on a
five-year cycle starting in thenext couple of years, and that's
great because you're going tohave a much clearer picture of
both the costs, which havechanged dramatically since those
estimates were made, as you say, in 2013.
And the timing.
The engineers are professionals.
(17:17):
They have a good sense of theexpected life of an asset, but
when you're taking a report from2013, their assessment of you
potentially needing a new roofhere in 2025, maybe you needed
to do it three years ago.
Maybe it'll be good for anotherfive years.
The fact that you are supposedto do these on a three-year
cycle and now have to do them ona five-year cycle will give
(17:39):
everyone owners, propertymanagers and the construction
companies that serve them whenthey need to do these works much
clearer insights on the timingand cost and scope of those
projects, because when you'rewithin five years, you've kind
of got a tactical horizon.
You know what you need to do inthe near term and that's, I
think, one of the things thatour partners are focusing on
(18:01):
that our partners are focusingon.
Speaker 1 (18:05):
You know, when I think of the particular, it's an
interesting business becauseyou know doing this work,
because there is no generalcontractor, typically, right,
you have a person that it'susually a sub trade of some sort
that is doing this work.
If it's envelope, they're kindof managing the project
themselves and it's asignificant amount of work for
(18:26):
them.
And I think what would beannoying from their point of
view when it comes to stratawork is that everyone gets gamed
on this.
We need three quotes, and I doget that Like when you know,
when a GC puts workout fortender, it's kind of a little
(18:47):
bit different than it is thiswork.
That is like they have tomanage it all and that they know
they're going to spend X amountof time looking through this
and obviously two of them arenot going to get the business.
Yeah, and I think that it's anannoying kind of, because you're
(19:08):
also dealing with differentlevels of strata.
Professionalism, absolutelyRight.
So working for a GC, yeah, sure, there's a big spectrum of how
good GCs are Some pay on time,some don't, et cetera, et cetera
, right, but these stratas it'slike, oh man, some of them have
no idea and then you're going tohave to manage that.
(19:29):
So there's the spectrum ofcomplexity, of how smooth a job
will go is a very rocky terrain,I would say for most work like
this.
Speaker 2 (19:43):
Do you get the sense that some of them shy away from
quoting on strata work becausethey know that?
Speaker 1 (19:49):
it's-.
Speaker 2 (19:49):
I think so yeah and that's unfortunate because then
you end up having stratas thatare served with sometimes padded
quotes.
They know it's not verycompetitive, they don't really
want the work.
Speaker 1 (19:58):
I think that happens a lot.
Speaker 2 (19:59):
And that's unfortunate, because the goal of
getting three quotes is thatyou are supposed to be getting a
good and fair price.
But if the good players arebusy doing high quality work,
getting paid fairly for thoseprojects, and then they declined
a quote on a Strata projectbecause they just know that the
chances are, say, one in three,that's unfortunate.
(20:19):
We really do want to unite thebest companies with those that
need quality service.
Speaker 1 (20:26):
Yeah.
Speaker 2 (20:27):
And I think transparency will help in this
industry a lot and we hopethat's something that we can
help bring.
Speaker 1 (20:36):
So there was in our building the, the hooks had to
be replaced on the roof, yeah,okay, which is, you know,
typically for services on theside of the building window
washes, et cetera, swing stagesand stuff like that and one of
the quotes was one third of theother quotes, wow.
(20:57):
And it was like, okay, why isthis so cheap?
And, of course, the naturalpropensity is to be like, okay,
well, obviously, obviously, youknow, for the, for everyone and
and our budgets.
You know, obviously we're goingto want something as economical
as possible, but to have to gothrough this fear and risk
(21:17):
because very often you knowyou're talking about a strata
council, you are and the stratayears volunteers they're not
getting paid.
They're not getting paid.
They're not getting paid.
Speaker 2 (21:25):
They're not professionals.
They're not professionals.
They do the best they can.
If you're lucky, you've gotsomeone that's got some relevant
workplace experience.
Speaker 1 (21:33):
But the role of that council is a difficult one it is
, and they've got to make thesedecisions.
Well, we just go with thecheapest one.
You got all these voices andyou know.
So I mean I wouldn't, we'd justgo with the cheapest one.
(22:01):
You got all these voices andyou know, so I mean it's kind of
an interesting business, so youknow.
So, with your initiatives thatyou have, obviously you see
these complexities that aregoing on.
You see the opportunities.
Once you guys do these reports,then you and I kind of just, I
think, sort of landed ontogether as a realization is
that, yeah, some of this workmay be not being serviced as
well as it could be because ofthese reasons, absolutely.
And is there an opportunitywith your company, to be able to
(22:22):
create an ecosystem around that?
To level set that a little bit?
Speaker 2 (22:26):
I hope so.
That's one of our priorities.
We want to make life better foreveryone that's living in these
communities and everybodythat's serving them.
And it's difficult because, asyou say and as we've discussed,
strata Council members arevolunteers.
They typically don't have allof the relevant experience to
make these decisions.
They're, in many cases,assisted by a property manager.
Those property managers oftenserve a dozen, sometimes up to
(22:49):
20 different buildings and theydon't actually get paid that
much, and some of them do.
Okay, you can make six figuresas a property manager.
But, with the companies.
But you're right and it's atough place to be, and I would
say that property management isone of the toughest desk jobs
that you could have, and I'm arecovering investment banker, so
(23:11):
if I'm saying that's a toughjob, I think I know it.
You just get an inbox filledwith people that have issues.
You're getting hit with bylawcomplaints, maintenance issues,
staff issues relating toconcierge or to caretakers or
any of your landscaping issues,and you're responsible for
(23:32):
trying to help them redo theirannual insurance policy, manage
building projects, line up thesecapital projects.
It's a lot and I think thatthey're often underappreciated.
I know that there are greatmanagers and there are mediocre
managers, but it's a tough job,and anything we can do to make
sure that they're well-informedand conveying the realities to
(23:53):
the strata council and theowners, I think is good, because
your tendency is to try andmake everyone feel comfortable.
I want them to feeluncomfortable.
I really want people tounderstand what's coming and be
better prepared for that.
So the annual benchmark reportthat we put together, that we're
offering through propertymanagers and to strata councils,
is designed to be the bearer ofthe bad news.
(24:17):
Let me factually show you howyou compare to others and what
the reality looks like for you,so that it's not the property
manager's fault that there's alevy.
You've had 20 years to fundyour roof project.
If you haven't adequately donethat, it's not the fault of the
property manager or necessarilywhoever happens to be on strata
(24:39):
council right now.
It's been a long time coming,so we want to put everyone's
eyes down the road so that theyunderstand their communities
better and can make betterdecisions.
Speaker 1 (24:49):
Wow you know, as you're talking I always say this
on the podcast is my uh wheelsare turning because serving the
kind of uh market that you'reserving and providing that level
of information.
It's usually the other wayaround.
(25:10):
There's usually like propertymanagement services that are on
the top and then they're tryingto come to you or people like
you to get all this kind ofmessy stuff out of the way yeah,
whereas you're coming in theother way, you're going.
Here's all the messy stuff.
This is the first thing.
This is what?
Because everybody iscontributing on a monthly basis
(25:31):
five strata fees by having the Xamount of dollars go into
reserves.
Everyone comes in a buildingevery day.
It gets used.
It's depreciating, whether youlike it or not.
And the opportunity that I seefor you and your company.
You guys have probably alreadythought of all of this, but you
know that the preferred vendorof different subtrades that can
(25:55):
do different things with theirstar rating and those you know
having the pipeline of all thework, having the pipeline of all
the work, and maybe there is a,some kind of a I don't want to
say marketplace, but that's anasty word but there is whether
or not when these reports aredone, whether or not the strata
(26:17):
allows there to be a transfer ofinformation.
they allow that, obviously,because some of this is you know
, a depreciation report is kindof reasonably confidential I
would guess it's not like it'ssomeone's medical records, but
you don't want the whole worldknowing all of this stuff.
(26:38):
But because I think you knowwhat's interesting is that when
I look at you know what'sinteresting is that when I look
at you know property values,especially in a hot market like
Vancouver is, toronto is wherepeople are spending a
significant amount of theirincome on their property.
Their net worth is tied up alot in their property,
(27:00):
absolutely Like I know lots ofpeople in the properties who've
got you know $8 million housesand a lot of their you know
their careers kind of do this,they oscillate, they go through
hard times, good times, all thatstuff.
But that property is that solidthing that's always worth
something.
And down here, you know in thesort of plus million dollar mark
(27:24):
, there's a lot of capital tiedup in that and you know.
You see the property valuations.
We've had our assessmentscoming in through the city for
Vancouver anyway and those werethe BC assessments and you're
seeing the softening.
And also from your opinion, howmuch of that depreciation did
(27:46):
the depreciation reports get tothe city?
Speaker 2 (27:48):
and they no, to my knowledge, they're not being
looked at at scale in the waythat we're starting to look at
them.
Obviously, the engineeringfirms who write them and there
are a dozen firms that do themajority of these reports within
any given province orjurisdiction They'd have a view
on all the ones that they'vedone, but to my knowledge
they're not being used at scaleyet by those that are doing the
(28:11):
assessments, and they should be.
I mean, obviously theassessment authority has an
understanding of you know whenthey were built, the age of
those communities.
They may be informed whencertain projects are done.
Obviously, permits are pulledto do work.
You've got a sense of of thatcommunity.
But to do it at the scale thatwe're doing, where it's granular
, it's building by building andit's updated every three to five
(28:33):
years as these reports getupdated.
Speaker 1 (28:35):
I'm not aware of anyone else doing it and I think
it's important work the reasonI ask is, um, before we were in
the property where now we'relooking at a different one, and
once we got into the detailswith our real estate agent, we
found that it had a hugeassessment coming up like crazy
amount of money, and I think itwas almost a hundred grand per
(29:00):
unit.
Yeah, grand per unit.
Now what's interesting is Iwent and looked at the BC
assessment for the place.
We did get, versus the otherone, similar square footage, and
that one with the $100,000assessment has gone down 100
bucks a square foot.
Speaker 2 (29:20):
Wow.
Speaker 1 (29:21):
So they must know something.
That's cool.
Speaker 2 (29:24):
Well, I'm glad to hear that they do, and we've had
some conversations with theLTSA and the group that helps
provide those assessments andthey're doing really great work
with title and with thebuildings and the valuations.
So I think that there's a lotmore that will continue to
evolve in that space.
But it is interesting youmentioned avoiding one because
you could see this upcoming levythanks to your realtor, which
(29:45):
is fantastic.
We had a similar story.
A realtor came to us a fewmonths ago and he said oh, I
sent my clients the ELA reportand they pulled out.
They didn't want to make anoffer.
They saw a $50,000 levy comingin 2027 and said, no, I'm not
going to proceed.
It was a competitive situation.
And said, no, I'm not going toproceed.
It was a competitive situation.
(30:09):
And my first fear as the CEO ofa company that provides these
reports is did we make a mistake?
Because it's possible.
We've got great technology andwe've got a great admin team
that reviews it.
It's a combination of AI andhuman review, but mistakes could
be possible.
Anyway, I took a quick look.
No errors were made.
We stand by our projection.
It's all based on math.
It's based on the engineer.
I don't have any opinions.
(30:29):
Ai is not guessing when it'shappening, it's just math.
But I said, no, that's a thing.
I think you've done a goodthing for your client here.
Talk to them about it andexplain what's happening here.
And anyway, he found themanother place within two weeks
and they were very happy thatthey were not facing that kind
(30:49):
of upcoming levy and I'mdelighted to hear that your
agent went through that for you.
Speaker 1 (30:54):
Yeah, it's my sister.
That's the good part.
She was awesome.
Well, that is so lucky.
No pressure, right?
Yeah, no pressure.
Yeah, dealing with the littlebrother Damn, yeah.
So where do you see this, yourindustry, going in the next,
let's say, five years?
(31:15):
I mean, you're using AI toolsnow for the analysis.
Yeah, do you see thesubcontractor being more
connected via your platform?
Speaker 2 (31:27):
Oh, absolutely yes.
So all sorts of vendors tothese communities some are
already working with inlandscaping, exterior cleaning,
concierge you look at those sortof operating budget line items.
It's helping them qualifyquotes so that they know before
they go to site approximatelywhat they should be looking at.
And it's helping them get inthere and provide a competitive
(31:50):
quote to try and win.
And it's a real mutual winbecause the owners in that
community are going to getbetter service, better price or
both, but they'll stick withtheir incumbent.
So this is saving everyone time.
It's helping them grow theirbusiness.
It's helping them leverage therelationships they may have with
property management firms, withindividual managers.
(32:11):
You can now see the otherbuildings that those individuals
or those companies are managing.
So I think that anytime you'reable to shed light at scale,
with data, onto problems, youcan come up with value and
solutions for everyone.
So that's what we're all aboutmutual wins.
Speaker 1 (32:33):
So if, let's say, an envelope contractor reaches out
to you guys and says this is thekind of work we do typical
high-rises, complicated work,swing stage stuff kind of work
we do, you know, typical highrises, complicated work, swing
stage stuff mostly that toessentially to mitigate having
to put the entire green screenor blue screen that they have
netting, they have to put oneverything.
(32:54):
That's a pain in the ass,especially when a lot of places
are buying the view right andthey don't have it for 18 months
.
It's terrible.
So what can that contractor doyou know, reaching out to you
guys like, what is it ideally?
What kind of email inboundemails do you want?
Phone calls, et cetera fromsub-trades that are good at what
(33:16):
they do?
Speaker 2 (33:17):
I want to hear from them.
You know which communities theyserve, the types of work that
they do, the types of buildingsthat they want, and we use AWS
QuickSight, which is an onlineportal system, to provide them
with access to the intelligencethat they're looking for.
So they'll get only the citiesthey want, only the building
types they want and only theinsights on the capital projects
(33:39):
that they're interested indoing and that allows us to
price it economically.
It allows these communities toget these quotes from
experienced, qualifiedprofessionals.
Speaker 1 (33:50):
That's cool.
So are you guys going to be?
Are you going to think you'redoing marketplace kind of thing
or not in marketplace, but morelike?
Speaker 2 (33:57):
There are existing companies that are kind of
involved in the procurementprocess, and that's not so much
what we're doing.
We're condo intelligence, sowe're providing insights and
intelligence for communities,property managers, strata
councils, condo boards, ownersand now those that serve them,
and that's where we seeourselves within the ecosystem.
I think that between the majorproperty management firms,
(34:19):
existing tools and the existingplayers that are in that
procurement space, that's wellcovered and I don't need to kind
of tread on their toes.
Speaker 1 (34:28):
Which ones are those procurement ones?
Speaker 2 (34:30):
Like Vendor, pm is a good example, so that's one
that's been set up a number ofyears ago.
It's another prop tech startup.
They raised several milliondollars and have been trying to
solve that problem, bringingtogether trades quotes with
these communities and you know,you say, oh, we need the three
quotes.
Well, they're insertingthemselves into that process and
(34:50):
serving a lot of propertymanagement firms.
Others have their own in-housetools, are you?
Speaker 1 (34:54):
guys connected with those guys at all.
Speaker 2 (34:56):
Yeah, I mean we know Emil Brill, who's the founder of
Vendor PM, and it's been awhile since we spoke.
We've got obviously more incommon now than we did several
years ago, so it'd be worthreconnecting, that's cool.
Speaker 1 (35:09):
So what do you see coming down?
The, the, what.
What headwinds do you do youthink there are for this kind of
work for condo owners right now, like what do they need to be
wary of?
Speaker 2 (35:27):
What kind of worries you about the market et cetera?
There's a lot to be worriedabout if you're a condo owner.
I think being aware of yourcommunity's future is really
important, and I say that as anowner and as a buyer.
Speaker 1 (35:39):
Can you be more specific when you say
community's?
Speaker 2 (35:40):
future.
I mean the physical andfinancial health of your
community.
I think too many of us arecomplacent.
We see the day-to-day stuff butwe're not necessarily aware of
those bigger projects.
Your sister's saying there's a$100,000 project coming down is
something that many owners inthat building may not be that
familiar with If it hasn't beentabled in their AGM, meaning
(36:04):
it's happening in the next yearor two and they're starting to
talk about that special levy.
Many of those owners might notbe well informed and when you're
talking about anything of thatmagnitude it's a significant
life impact.
You know you're eitherremortgaging, adding on a line
of credit.
(36:24):
Most of us don't have $100,000sitting around for a capital
project in their community, andso that's what keeps me up at
night.
I talk a lot about the fact thatwe're not properly funding our
reserves in this province.
Many jurisdictions in NorthAmerica find themselves in the
same situation.
You're seeing a lot of noiseout of Florida.
Obviously in the wake of theSurfside tragedy a couple of
(36:46):
years ago, where a condobuilding half collapsed, they
started requiring morestructural assessments of other
communities.
Some of those communities haveidentified issues.
Some owners are being told thatthey need to come up with a
quarter million dollars formajor structural works and they
can't afford it.
So I think that when you comeand look at the condo landscape
(37:07):
across North America, that's thething that keeps me up at night
if I'm a condo owner.
I think if I'm somebody that'sserving these communities, we
really need to get betterorganized and make sure that
these communities understandwhat's coming and manage those
projects efficiently,effectively and productively.
Speaker 1 (37:25):
Okay, so what do you think about the inflation versus
strategies?
Speaker 2 (37:36):
um, inflation is very real.
Um, you know, I I rememberhearing the word transitory and
shaking my head because, youknow, you just knew it wasn't
not in the sense that they weretrying to describe it.
Now it's returned to whatappears to be a more normal
level, but, conveniently, whenit comes to major costs, um,
(37:57):
operating these buildings, Ithink that the true inflation
rate for condo owners is higherthan the stated inflation rates.
Exactly, yeah, and that'ssomething that we've all got to
be aware of and plan for.
I see some stratas triumphantlydeclare that they're you know,
they haven't raised condo feesin three years and I'm going.
(38:18):
Well, you're just robbingyourself here, because if you're
not, if you're not settingaside more money for everything
else, you're cutting somethingalong the way and maybe it's
something you can live without.
Maybe you've managed to reduceyour landscaping budget, maybe
you've managed to make it withone less shift on your concierge
, but if it hasn't been aconscious choice, then the costs
(38:44):
and the deferred maintenancethat you're putting onto your
community by trying to falselycap your fees is just putting
that burden on the future.
So that's one of the realitiesthat we are all seeing them face
with.
Speaker 1 (38:59):
Yeah, and also in the aging population in some of
these buildings that cannotafford an increase.
So there's a community side ofthings where, um, you know, I
can think of some people if Iwere to suggest, hey, let's put
(39:20):
our strategy up, even bysomething small like 50 bucks,
yeah, okay, it'll make a hugedifference.
You know, together it's a smallboutique building so you're
like, okay, well, what's thisreally, what's this really going
to do?
Is what they would say Say well, it's every month, it's all
year and it'll make a bigdifference.
So, but the reality is, is thatthe amount, of like, when
(39:48):
minimum wage goes upsignificantly and then trade
costs go up everything, as younailed it there a couple of
minutes ago, is the actualstated inflation rate you hear
in the news, is not the actualincrease of costs that you see
on the ground level.
It's like a crazy amount.
(40:08):
Sometimes it's an inflationrate of X and then you've got an
inflation rate of 25% on thereality of life, yeah.
So that's pretty crazy, right?
So, yeah, can I ask you aquestion Is there any AI systems
that you have seen that replacethese expensive property
(40:31):
management firms?
Speaker 2 (40:33):
You know, I think it's all about incremental gains
and efficiencies.
I'm an advisory board member ofa firm called Strata Press,
which allows communities tomanage and organize their
documents, whether they'reself-managed or whether they
have a property management firm,and the work that Sean Jordan
is doing there, I think, isquite impressive.
It's not going to replace amanager, it's going to help them
(40:56):
be better at their jobs.
If you can streamline theprocess for issuing a bylaw
notice, if you can make iteasier for an owner to
understand what their bylaws areand what type of pet they're
allowed to have without havingto email the property manager,
then they can be more efficient.
And there are AI tools.
There are great system toolsbeing built by the plethora of
(41:17):
companies that are like StrataPress across North America that
are making life easier andbetter.
To afford them purely becauseyour, your strata council or
your condo board is comprised ofvolunteers, and having someone
(41:39):
that has the experience, thathas that professionalism, that
has a network and a systemaround them that can help them
navigate the complex issues thataffect every community, that's
a good thing.
So I'm hoping that technologyand AI makes everyone more
efficient, it makes them better,it allows as the number of
condo buildings continues toexpand and the number of
(42:01):
property managers is treadingwater at best.
We read about shortages ofproperty managers every year and
I think, as the number of condobuildings continue to increase,
they've got to be able to servemore communities, or more
communities are going to end upself-managed.
And I know that that's somethingthat gets, you know, a bit of
coverage as well.
Speaker 1 (42:21):
Well, I think the big delta of any building is the
old building manager.
Not property manager, butbuilding manager, the person
that's if the gate's stuck or if, like you know, something's
going on that a third-partyproperty management company you
(42:45):
know, is an email or a phoneaway and miles away to be able
to deal with something immediate.
And then you know so that to methere's that huge Delta problem
that I think a lot of buildingsare going to be in where you
know, on the paperwork side ofthings, this is planning, this
is you know, all that kind ofthat stuff Big picture but yeah,
(43:05):
big picture stuff, that's great, but like the nuances of daily,
there's something every day,every day, absolutely Every day.
That's going on.
Speaker 2 (43:12):
And as you say that Now, concierges are having to do
it, that building manager, thatsuperintendent, that person
that's been there for 20 plusyears, who knows exactly why
this door gets stuck or whythere's water seeping into this
particular place.
That intelligence is somethingthat does get lost if not
transferred, and I know someonewho's had that exact situation.
(43:39):
The guy's been there for nearly30 years.
He's retiring.
They're in a panic.
They need all of that knowledgepassed on before his retirement
and I think that, yeah, thaton-site expertise is important.
Obviously, fresh eyes can begood too, instead of ignoring or
knowing how to just avoid aproblem for a long time.
Fresh ice can solve a problemrather than just tend to it, but
(44:01):
, yeah, I agree.
Speaker 1 (44:06):
I mean this is a luxury problem, but I've noticed
in my building that all thereplacement light bulbs are not
the same Kelvin.
Speaker 2 (44:22):
And I'm like it pisses me off because I'm like
what the hell it's not adentist's office.
They're different whites, yeah.
Speaker 1 (44:29):
So one's 2,700, the other one's 4,000.
I'm like, whose job is it?
Yeah, somebody has to get thatright.
Speaker 2 (44:42):
But the thing is, I don't think it's anyone's job.
Speaker 1 (44:46):
Well, you've got to make the noise about it, because
I agree, this is a highlyirritating luxury problem?
Speaker 2 (44:51):
Yes, but it is highly irritating and we talk a lot
about different things.
You know we have insights toall these different budget line
items and one of them is the gas, the electricity, the water and
sewer bills and whether you'vegot high gas consumption and you
could look at shifting towardsa heat pump solution, whether
you are using a lot ofelectricity relative to other
buildings and you might consideran LED lighting project or some
(45:12):
other efficiency upgrades.
Consider an LED lightingproject or some other efficiency
upgrades.
Those are the times when youget to make those conscious
decisions and somebody'sdeciding which bulbs to replace
and obviously you've gotlighting of different styles and
different ballasts anddifferent fixtures and, yeah,
that decision has to be made.
I don't know what to tell youin your personal situation.
(45:33):
I can tell you I'd go down tothe hardware store and change
that bulb myself because thatwould just drive me nuts and
it's just not going to rank on aproperty manager or strata
council's list of priorities.
Speaker 1 (45:45):
It won't because it has to be at the next AGM or
something and it's like a yearlater they're going to be
dealing with light bulbs,absolutely.
Speaker 2 (45:51):
And let me just say for the record that I'm only
suggesting a light bulb.
You are not allowed to do anyelectrical work in your strata
building.
You need to be a licensedprofessional to do that.
So when I talk about, you knowthe Kelvin issue.
It's merely changing a bulb.
Speaker 1 (46:06):
Yeah, yeah, interesting, okay, all right, so
what?
Speaker 2 (46:14):
else is happening.
You know we're looking at thefuture of smart buildings and
smart communities.
How can people get moreefficient?
What can they do that will maketheir communities better for
the longer term and morecomfortable for them?
You know a lot of the buildingsin Vancouver were kind of a
unique situation in NorthAmerica.
Is that when they were built,there's no air conditioning.
Is that when they were builtthere's no air conditioning and,
(46:35):
depending on the year, yourcommunity and depending on your
aspect if you're south-facing,your unit might get
uncomfortably warm for aprotracted period during the
summer.
So finding ways to accommodateheat pumps and other
energy-efficient ways to makeyour living space more
(46:57):
comfortable, I think, is animportant issue.
There's been more discussionabout that and lightening of the
rules to make it easier forpeople to make their living
space more comfortable.
We've obviously seen a big pushby the government with the
electrical planning reports.
They want more electric vehiclesupport, more ev charging.
(47:19):
I think that that's a greatinnovation, and I think we
talked about insurance premiumsand deductibles earlier.
There are some great solutionsout there that will help you
manage and mitigate losses andto manage some of your utility
bills.
So one solution is putting in apressure gauge right where your
meter is to prevent you frompaying for air bubbles in your
(47:41):
water supply.
It's actually a big deal andsome companies out there will
save 10 to 15% of your annualwater and sewer bill, which can
be a significant line item.
And then you've got theinsurance side where with, for
example, bfl's FlowGuard program, if you put in and have
sprinkler systems and if you'vegot smart water shutoffs, you
save money on your premiumsevery year.
So these investments in smarterhome solutions are allowing
(48:05):
owners to make savings on arecurring basis.
So those are all things that Ithink are being discussed and
are important and are reflectiveof the future of community
living.
Speaker 1 (48:17):
So, whether you're an HVAC company that's looking to
serve these communities, orwhether you're looking at some
of their bigger capital projectsnew, more energy efficient
window installation and newsiding and insulation all of
those things I think are are big, um big priorities for these
communities so in the uh, in thepacific north coast here, or
(48:39):
pacific north northwest, um,specifically, um, we see a huge
issue with the west, south,southwest sides of the buildings
, absolutely, and the other, sothe other side has like a algae
not algae, but on the dark sideyeah, you've got algae moss.
(49:02):
On the moss, exactly Moss andmold on the northeast sides and
then totally baked on thesouthwest sides.
Yeah, yeah.
So that's got to be like howmuch, like from the envelope
(49:25):
point of view of like windowseals and all that kind of stuff
that get heated to the like?
Speaker 2 (49:27):
are we seeing this seasonal, like summers are?
Speaker 1 (49:28):
getting really hot?
Yes, like is this a climatechange thing, do you think?
Speaker 2 (49:30):
I think weather is a thing Without you being
political, without getting toopolitical about it, I think
weather is just a thing.
Weather is and there arefluctuations over time, but
we're in a period now wheresummers can get better.
Are we having an impact?
Yeah, I mean there are impacts,but I think that the challenges
that these communities face areobviously how do you adequately
maintain buildings where theweather seals are getting cooked
on one side and they're coveredin moss on the other?
(49:52):
I think that's an issue that Ithink is widespread across the
Northwest and I'm sure that manyof your customers and clients
would know how to handle that.
I see it as you do.
I lived in Coal Harbor myselfand I faced west, and that
little unit got hot even 20years ago.
(50:13):
So that building had central ACbut none in the units.
So you know that was an issueeven 20 years ago.
Speaker 1 (50:26):
What was the reason most air con was not put in?
Speaker 2 (50:30):
I mean, it was just something that we didn't think
we needed.
Speaker 1 (50:33):
You know, we kind of thought that we were temperate.
Speaker 2 (50:36):
I certainly think it wasn't as hot and we were not
living in the same concentrationwithin condo buildings.
You know, you look back 40years.
The number of people living incondos were less than 10%.
Well, now, across North America, nearly one in three people
lives in some sort ofmultifamily community, whether
it be a gated community in HOAor in a condo of some
(50:58):
description, townhouse, duplex,et cetera.
And the more concentrated youare in your living environment,
the less you have airflow tohelp you regulate temperatures.
And I think, at any case, whereyou find yourself in an
environment where you areconstrained, having some sort of
air con or improved HVACsolution is more essential.
(51:23):
So I think we've got a lot morepeople dealing with the problem
now than we had a generationago, and I think that that is
definitely a part of it.
And certainly some hot spellsmight be getting more common
than they were a generation agoas well.
But making your livingenvironment more comfortable,
given the cost of real estate, Ithink is entirely reasonable.
(51:43):
Out of all the work I had tospend on my non-strata row house
when we moved in, the best$15,000 was on a heat pump
system that makes it morecomfortable all year round a
heat pump system that makes itmore comfortable all year round,
especially that top floor whichonly had electric baseboards,
like so much of the detachedhomes in the Pacific Northwest.
You might have had forced airon your lower floors, but your
(52:05):
top was only electric heat, andfor us, having the ability for
the heat pump to provide heat inthe winter and cool in the
summer makes that homeimmeasurably more livable, and I
love mine.
So I'm not an HVAC salesperson,but I appreciate the value of a
good heat pump.
Speaker 1 (52:26):
Nice, all right.
Well, this has been prettyawesome to listen about your
company.
So just so people can listen toit, the value there there can
be getting.
So someone can come to you guyseither a strata can or somebody
looking at a property orsomebody trying to figure out
what to do with their propertyor whatever it is, you can get a
a report from you guys, yeah.
Speaker 2 (52:48):
Eli report gets you up to speed, annual benchmark
report helps you make budgetcapital planning decisions.
And then OctoAI is providinggreater condo intelligence for
everyone that serves andsupports those industries and
all of those condo owners.
So, whether you're a propertymanagement company, whether
you're a construction company,you're involved with any aspect
(53:10):
of multifamily residential andserving them, then I think that
there's an opportunity for us todo some things together that
will bring those mutual wins toeveryone in the ecosystem.
All right, well, this has beenawesome.
Thank you so much for having me.
Speaker 1 (53:25):
Good luck with everything.
Thanks, awesome, thanks, man.
Well, that does it for anotherepisode of the Site Visit.
Thank you for listening.
Be sure to stay connected withus by following our social
accounts on Instagram andYouTube.
You can also sign up for ourmonthly newsletter at
sitemaxsystemscom slash, thesite visit, where you'll get
(53:46):
industry insights, pro tips andeverything you need to know
about the Site Visit podcast andSiteMax, the job site and
construction management tool ofchoice for thousands of
contractors in North America andbeyond.
Sitemax is also the engine thatpowers this podcast.
All right, let's get back tobuilding.
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