Next-Gen Property Management Solutions for Multifamily with Ned Murphy, General Manager at Level M

Nate Smoyer (00:01.382)
Ned, welcome to the show.

Ned (00:04.078)
Thanks, great to be here.

Nate Smoyer (00:05.677)
Glad to have you here. Thank you so much for setting aside the time. I think we've got a fun conversation. Multi-family business has been an exciting business to be in and you guys are in the thick of it. But I actually wanna talk real quick here. I always like to get off, started on a little bit of a tangent. Southern California got hammered with rains last year. What's it shaping up to be like this year? You guys, you said on...

water or are you guys still in the drought?

Ned (00:38.402)
We emerged from the drought. We did emerge from the drought officially last year. About 100% of where we should be at from a water standpoint through the winter. So I think we're in, we're in our shape.

Nate Smoyer (00:48.517)
Okay, everyone else can breathe a sigh of relief that California doesn't have to take the rest of the Colorado River, at least for now, that you guys have rain. Yeah. Well, for everyone listening here, I've got Ned Murphy. He is a general manager at Level M. Prior to Level M, he was one of the co-founding team members at a company called Dwellow. They were actually acquired.

Ned (00:57.846)
For now, we're coming forward eventually, but not today.

Nate Smoyer (01:18.217)
into the company. LevelM is next generation smart apartments and property automations platform for the multifamily industry. A lot happening in that space around automation, smart buildings, technologies, but before you even go down the rabbit hole that that's inevitably gonna take us, let's start with a little bit higher viewpoint, if you will. What's the state of multifamily?

as you're seeing it and as you're countering it.

Ned (01:52.502)
Yeah, I think it's a really interesting time in multifamily. What we're seeing and a lot of the conversations that we're having with our customers has to do with sort of record level supply of new construction projects coming onto the market. And while you're seeing that, you're also seeing a real standstill in terms of transactions. So because of the way that the market's been for the last 18 months here or so.

We're seeing this really, really interesting contrast between a ton of new builds, ton of new properties coming on the market, and then just real gridlock when it comes to the transactions of existing properties, which is causing some challenges, some opportunities. And I think our business is in a unique spot. So we're impacted by it, and we're trying to have strategic conversations with customers to help them sort of navigate that time.

Nate Smoyer (02:45.801)
Yeah, and I just actually had a conversation with the COO of Apartment List, Matt Service. And he echoed actually a lot of what you just said. We're at this really interesting moment where demand has waned a little bit. We're seeing a little bit of an increase in vacancy rates, but we've got this almost wave of new inventory coming onto the market.

and maybe a little bit of anxiousness as to what does that mean and where does that go? I'm curious and I haven't delved into the data to get detailed with it. Is it certain markets that are really going to be exposed or we've just seen this kind of blanket, blanketly nationwide?

Ned (03:33.13)
Yeah, so I think as always the case you have, there's certainly a subset of submarkets where you're seeing a real boom and there's a lot of supply coming online, certainly areas in the Sunbelt, other areas where not so much. So I think those submarkets where it's happening, there's enough of them where the overall national trend is very clear that the amount of deliveries that will be happening in 2024 will be, I think it's the most 40 years or something like that.

But it's, I would say there's, you know, 15, 20 sub markets where you're really going to feel that pinch. And where it's going to make for some really interesting competitive dynamics, you know, vacancy rates, how long it takes to stabilize new properties, seeing how that plays out in those markets over the next year or so is going to be going to be fascinating.

Nate Smoyer (04:27.097)
It'll be interesting to see what, do people just stick with the standard concessions or how creative do they get with it? I think about this actually because, there's been this like, this amenities race, who's got better amenities, who can bring people in and this, any other, and you don't wanna lower your rents, especially in markets where rents, have some sort of either controls or.

Ned (04:45.56)
Mm-hmm.

Nate Smoyer (04:55.181)
they're rated by how much you can increase on an annual percentage. So then what else can you give in those concessions? I kind of think that you could get a little bit more creative on the concessions than just like, you know, your 13th month is free or whatever they do. I never could never follow the math on it. I was like, I never got a free month. I don't really understand how this all works.

Ned (05:12.75)
Sure.

Ned (05:17.498)
Yeah, yeah, I think, I mean, I think that I think folks are going to be forced to do so. I think there's two dynamics that are going to be impacted pretty heavily based on this new supply. So one, in many ways, what's in your building, if you're sort of delivering a new construction building is a function of decisions you made five years ago.

Right. You put together your plan, you put together your budget. Things are set in motion way, way in the past. And now you're coming to market with the sort of the culmination of all those choices over time. Right.

Nate Smoyer (05:41.271)
Mm-hmm.

Ned (05:56.19)
So what are the things that you have left at your disposal in order to manage the competitive dynamics in the sub-market? You might be forced to do concessions. You might be forced to make incremental sort of investments. If you're obviously in the business of getting a stabilization as quickly as possible, you're going to have to be creative with it. I think the other aspect is sort of because of that new supply coming into a sub-market, what are the practical ramifications for existing

properties that are there. You're not just competing with the folks that have been on your block now for years. You're competing with all these new properties that are coming on to the market and the way that you're going to need to think about upgrading your actual product in addition to what you might need to do from an amenity standpoint, from an upgrade and investment standpoint. There's implications on both sides, the new builds and then the existing properties that are in that sub-market.

Nate Smoyer (06:47.777)
Mm-hmm.

Nate Smoyer (06:57.409)
You know, of course, I know kind of shifting here a little bit. Obviously, we're going to talk about the technology and in the multifamily side of things here. Tech having some impact, I think, on some of the newer builds. You can see it better access control thought about right from the start. High speed Internet right from the start. You know, there's a there's a lot more that is being going into and especially a lot around energy conservation and that sort of thing. But

I think that's all part of this term that is just kind of we've, we've appended to just every other noun. It's a smart building. You know, you have smart toasters and smart fridges and smart cars and we got smart buildings. But I want to start at the, at the base here, just cause let's get foundational with it. What makes a building a smart building?

Ned (07:27.34)
Yep.

Ned (07:37.982)
Yeah.

Ned (07:53.738)
Yeah, I think it's a great question. And I think the ambiguity around smart is part of the thing that makes it a little bit difficult to have a clear conversation about, at the very least. I think it certainly lends itself to some challenges when you're an actual developer or an owner and you're trying to make an investment in smart technology, but you don't really know kind of what that means or where to begin.

When I think about sort of smart buildings as it relates to multifamily, my sort of working definition of it, and this is how I think about it from the very early days of what I would consider smart tech and multifamily, is that you've got sort of real-time connected devices and sensors that are across the common spaces and many spaces and the units in a building. And then there's the ability to manage those and interact with those things from applications that are distinct for.

property staff or renters or visitors for guests. So that's the way I would think about it. It's sort of like if you build upon what you consider to be a smart home, you apply that into the multifamily property itself. That's the way I would think about it. I think there's plenty of solutions out there that are probably marketed as being smart. But I think that having that sort of connectivity element, the sort of real time ability to control

from those devices and sensors. I think that's what makes it smart and what gives it the ability to have that kind of impact on the day-to-day operations and the day-to-day living.

Nate Smoyer (09:28.061)
Yeah, and then, you know, obviously, because you're working with these owners and operators and you're seeing what they have in place, right? And you know, whether you're prospecting them or you guys are working with them to do some sort of implementation, right? You're getting to see the stack. So for the owners and operators who have, they've already said, yeah, we're gonna be a tech forward, tech leaning type operation here.

Ned (09:38.519)
Mm-hmm.

Nate Smoyer (09:56.449)
Can you give us a breakdown of what you come across as a pretty typical tech stack, both soft, like technology software kind of thing, as well as hardware?

Ned (10:10.903)
Yeah, yeah. So I think it's easier to think about it through the new build lens, and then I'll flip it to look at it from existing portfolios. So from a new build lens, I think the way that most people are thinking these days is that they want to ensure that there is going to be sort of high speed internet, some type of managed Wi-Fi solution that's going to be made available at the property.

Nate Smoyer (10:21.602)
Mm. Mm-hmm.

Ned (10:39.966)
They are going to be thinking very clearly about EV chargers and some of the other technology that requires physical installation. And they're trying to be mindful of designing their building in order to be able to take advantage of that or to be prepared for that. When you start to get into sort of our world, usually it starts with access control and being thoughtful about the way that...

building access control, unit access control, how those things are going to be acting interacting with your the other sort of systems that you have that run your building. Your property management software would be a great example of one of those. And then I think from there it really is going to depend on the type of building that you're either developing or that you that you have and you might be retrofitting.

Nate Smoyer (11:22.529)
Mm-hmm.

Ned (11:34.954)
And if you've got a built to rent, sort of single family rental style property, you're gonna be thinking of a certain set of devices, sensors. If you've got sort of a high rise in a primary city on one of the coasts, you're gonna be thinking a little bit differently. So I think that the stack that we're seeing always be part of the consideration. It's...

Nate Smoyer (11:49.013)
Mm-hmm.

Ned (11:59.226)
What's the broadband infrastructure that's being put into the building? And then what is the smart device connectivity layer that's going to go in? How will the smart tech that you're going to put in interact with the other physical infrastructure of the property? And then as you start to move from the hardware to the software, how is this going to be interacting with? Generally, it starts with your property management software.

so that you can do things like automate your move-ins, start to simplify some of your things like your maintenance workflows, your leasing workflows, things like that.

Nate Smoyer (12:36.053)
Got it. Yeah. And then, you know, let's also like get into level M. So where do you guys fit in on that picture? You know, where are you coming in? And we can stick on that new build side, right? Um, cause it seems like that's probably the biggest opportunity, but you know, what's, what's the role that you play in helping buildings be smart buildings?

Ned (12:42.989)
Yeah.

Ned (12:55.586)
Yeah.

Ned (12:58.802)
Absolutely. So I think that what you just said is actually like a perfect way to get into LevelM. The biggest opportunities is not a new build. The biggest opportunities in the 15 million units that are out there, right? The properties that already exist. And I think what LevelM is really about is we think of what we've created as a next generation platform and what makes it next generation is

Nate Smoyer (13:09.553)
Oh.

Nate Smoyer (13:28.385)
Mm-hmm.

Ned (13:28.796)
be able to take our platform and deploy it into all the communities and the properties that are out there that want to be taking advantage of the benefits of smart tech but maybe first generation solutions that were in the market. You couldn't really do it because it was either cost prohibitive to install it, it was super disruptive to staff, to residents, or it just didn't work particularly well.

and you just weren't going to see the kind of performance that you would need in order to justify what is a substantial investment. Because you're talking about combining physical installation of hardware with a software platform that's going to be running for as long as you want to have that system providing value.

Nate Smoyer (14:00.99)
Mm-hmm.

Nate Smoyer (14:11.769)
And let's just even like pause right there for a hot second because the ability to marry software products and hardware products from every conversation I've had is like, is a particular challenge. And it's not even just like from the consumer side of like, okay, how do I set like very simple thing is we, we have Philip Hughes light bulbs in a few places in our house. And I should get paid for this.

Ned (14:26.306)
Yes.

Ned (14:35.189)
Yes.

Nate Smoyer (14:41.465)
If you have not switched away from an alarm clock to light bulbs, I'm telling you right now, it'll change your mornings because they just turn on in the morning. They just fade on. I couldn't believe it. But the first time setting it up was like, how the hell do I get a light bulb to talk to my phone? And it was frustrating even from the consumer perspective. And then you think about it from a company perspective to create that.

Ned (14:54.111)
Yep.

Nate Smoyer (15:09.685)
These are two very different product development cycles, two very different approaches to creating product. Physical products hit the market when they're done, they're ready. Technology, we're like, ah, you know, it's pretty good, ship it, we'll, ship it, we'll fix it Friday, you know? And when it comes to hardware involved, the hardware itself could be totally perfect.

Ned (15:20.768)
Yep.

Ned (15:24.85)
Yeah, that's good enough. It's close. It's pretty close. Let's go. Yeah. Yep.

Ned (15:34.518)
Yeah.

Nate Smoyer (15:37.013)
But that glitch in the software or in the app that prevents you from achieving a high level experience or something that would be a full good, worthy consumer experience, that will block everything from reviews and future use. And you can't just say, oh, we're beta. And people will not excuse that because it's a physical good. I mean, maybe we can come back to this if you want, but I actually wanna dig in here.

Ned (15:54.07)
Yes.

Ned (16:02.047)
Yeah.

Nate Smoyer (16:07.021)
how are you guys managing just that piece? Because that is a significant challenge for any of the startups that are in this space. I think other founders would be interested in hearing your take on how you guys approach solving those problems.

Ned (16:22.678)
Yeah, I mean, I think the perfect way to talk about LevelM is to talk about the experience and the appreciation that was gained in the years prior to it, sort of understanding the breadth of the platform that you need to build in order to deliver smart tech for multifamily is significant. And you think about it from a technological standpoint, it's...

usually some form of proprietary hardware, it's working with third party hardware, it's working with software, and then it is, there's a ton of requirement in order to have your software integrate and interoperate with PropTech, which is just, when you think about the amount of PropTech and the amount of sort of explosion of software that's happened over the last 10 years, it's pretty incredible. So the backstory, really the sort of origin story of LevelM starts with a company called Dwellow.

I was the fifth employee of Dwellow back in the day, was brought on to lead sales and marketing. I had worked with the co-founder at Salesforce actually. When it became time to go out and acquire customers and to scale up, they brought me in. What we learned over those years was literally everything that you just said.

Uh, the, the amount of investment that was required from a technology standpoint was significant. Um, the amount of time it takes to, uh, to build, to release, to, to test, to, to fix, right. It's just fundamentally different than, um, a software platform or software solution. The other thing that we, uh, became very, very clear to us and, um,

David Beanfield is the co-founder of Dwellow and I, when we were at Salesforce, one of the things that we saw is that Salesforce is a true platform, right? And when you get into enterprise organizations, whether or not that company was gonna have a good experience with Salesforce was almost entirely based on how effectively was it implemented, right? Was this done in a really thoughtful way?

Nate Smoyer (18:12.491)
Mm-hmm.

Ned (18:28.406)
Was it, were you mindful of the, all of the other backend technologies that you'd be running at that? Did you understand the change management that would need to take place? How you enable, how you train, how you support? So we realized that the service associated with smart tech needs to be excellent. Otherwise it doesn't really matter how good your tech is because you're gonna really struggle to deploy it.

Nate Smoyer (18:33.641)
Mm-hmm.

Nate Smoyer (18:49.046)
Hmm.

Ned (18:56.458)
it's going to be really frustrating to your owner, your customer or your owners and your developers. But then by the time you get to the end user who is the resident or the property staff, you're already going to be way behind the eight ball. So with Level M, what we realized is that there was the need to really develop.

Nate Smoyer (18:56.758)
Mm-hmm.

Nate Smoyer (19:10.335)
Yeah.

Ned (19:19.154)
a next generation technological platform that was taking advantage of a lot of the advancements that had happened just from broad technologies, whether that's networking technologies, that's devices being more effective, creating custom new hardware to make sure that performance was happening at a higher level. And then you were going to have to maintain that focus and the discipline around the way you go about

designing your solution for every single property that you're gonna go into, how you work with various stakeholders from the development side, from the contractors, low voltage folks, property managers. There's just a lot of pieces that are moving all the time.

And so that's really what LevelM is. It's the next generation platform from a technological standpoint that's building off of the knowledge that we acquired at Dwellow from operating in the space for seven years with a real sort of focus and intention around how do we design, install, and then support this platform so that the end user experience is one that's excellent.

Nate Smoyer (20:26.793)
Mm-hmm. Yeah. And I know, and on the site, you know, I noted, I took note of like, you guys have listed out some of the integrations that you guys have. So you, you go beyond just, Hey, we have this, like, you have the tech approach and we have this hardware and we can make things talk to each other. But I think, you know, we've talked about in the show multiple times is like the need for integrations in multifamily. It's just so unavoidable.

And it's so easy to think about, it can't be that complicated. How hard is digital locks? Can't be that complicated. Just put a nest in every unit. But then how is that even managed? And when you really think about it, the property manager has to get info to the actual maintenance staff, or if it's a specialty type of piece of equipment or something along those lines. I mean, there's all kinds of, it seems like curve balls.

Ned (21:03.459)
Mm.

Yeah.

Nate Smoyer (21:25.265)
And you mentioned even like designing your systems, which I don't think I hear that talked about probably outside the room of where the people were actually designing systems very often. I don't think I hear it framed and phrased in that way, but it makes a ton of sense. And so you guys got these integrations with, you know, like Yardi, RealPage, Entrata, so that those are like the, you know, pretty much required platforms if you wanna play in multifamily, and then all the hardware, Kwikset, Honeywell, Google, that sort of thing.

Ned (21:29.517)
Yep.

Ned (21:35.47)
Sure.

Ned (21:49.397)
Yep.

Nate Smoyer (21:54.769)
I can kind of paint a picture of who might be the ideal customer in looking at some of these integrations, but can you kind of break it down? How does an owner operator or even like an investment group that's in the multifamily space, how do they identify that, hey, we are a good fit to make these investments because we can, you know, this could play out to our benefit or this is going to have upside for us?

Ned (22:02.142)
Mm-hmm. Yep.

Ned (22:24.694)
Yeah, I think honestly where I think it often starts is that somebody will either be developing a building for themselves, they'll be involved in some kind of fund where somebody else is developing it, they might be investing in it, or they work with a property manager or some other sort of trusted advisor that might have had some experience with it. I think that's how most people think about sort of smart tech is smart tech goes in new builds, it's about sort of moving forward.

Nate Smoyer (22:37.165)
Mm-hmm.

Nate Smoyer (22:46.344)
Mm-hmm.

Ned (22:55.808)
But once people start to have the conversation, what becomes pretty clear is that this technology and the benefits associated with it, really if we're talking about market rate, professionally managed multifamily properties, then it's a fit for smart tech.

then thinking about sort of what are the benefits that are really going to be driving the interest or what are the benefits that are going to be driving the return because there's going to be an investment, there's going to be a lot that's going to have to go into it. I think that's actually property by property. And when I said that, when I sort of used that term design, I think the way that PropTech often is thought of is sort of through the lens of enterprise software.

where you think about something for your portfolio, you make a decision to go with Yardi or RealPage or whatever, and then you're just gonna sort of deploy that and it's gonna go across your whole portfolio. With this type of technology, each property is very unique. The way that it's built, the sort of physical environment that's there is gonna dictate what the actual implementation of it is going to look like.

So it is much more sort of case by case. And that's where thinking about that strategically is going to be really important. One of the things that I'll just sort of put out there that I think is a...

there's a sort of misunderstanding of it, is that in order to take advantage of smart tech, you must have managed wifi. You must make an investment in upgrading the broadband infrastructure of a building. And that's actually one of the areas where we put the most emphasis on from an innovation standpoint is, how do we bring cost-effective connectivity that works reliably? How do we bring that to retrofits? How do we bring that to all properties so that you don't have to

Nate Smoyer (24:42.728)
Right.

Ned (25:00.486)
wait for a long contract to come to an end with your internet provider. You don't have to be allocating so much capital that it becomes untenable. How do we make it so that it's more approachable? It's something that we could actually put into place.

Nate Smoyer (25:21.973)
I get it. I appreciate that. And then let's kind of jump to this one here because the other pushback I've heard from others is trying to understand the ROI of these investments. You know, I mean, ultimately multifamily is a, you know, it's an asset class to invest in. Your investors probably more, or your customers probably more often than not, they have some sort of yield that they're chasing here.

Ned (25:35.211)
Yep.

Nate Smoyer (25:50.945)
that they're in pursuit of, right? And then you come to them and you're like, hey, we're gonna make the experience better in your building by adding this technology. And that sounds great, but it doesn't. How does this experience, how does this living quality, right, how does this modern approach translate to ROI for the investors? And how do you even navigate walking them through like what that could look like or?

Ned (25:51.402)
Mm-hmm. Yep.

Ned (26:15.959)
Yeah.

Nate Smoyer (26:20.521)
to paint that picture because I imagine that can be a challenging, I'll say it's conditional because I don't think it's an objective or objection really outright. I think it's a conditional. Yeah, we would do this if it could drive ROI is more likely to be the argument. So I'd love to hear your take on how you battle that.

Ned (26:35.102)
Right. Yeah.

Ned (26:41.706)
Yeah, so I think that as with all good sales, I think it starts with.

Who specifically are you talking to? Are you talking to a developer? Are you talking to a developer that's going to hold the property long term? Are you talking to a developer who after stabilization they're going to sell it? A lot of our customers have a value add strategy where they're going to acquire a building. They're going to make an investment in upgrading that property, and then they're going to sell it. So it really depends on what type of owner or developer, what is their business model? What are the things that they're actually looking for?

Nate Smoyer (27:10.614)
Mm-hmm.

Ned (27:19.152)
And even just within that, we're talking to a CFO, we're talking about payback period, are we talking to a marketing, somebody who's in marketing? Is it a small group where you've got a couple of folks that are really doing everything? So I think it depends on who your audience is. But what we tend to see is that people think about it a couple of ways. A lot of folks look at this and they think about, this is going to help me.

help ensure that I'm going to be at the top of the sub-market I'm in terms of a rent level. That's often the way that they would be thought about when you're developing a building and you're first coming into a market. How is this going to help me be competitive? How is it going to help me earn sort of top market rents, make sure to be making an impression in a very crowded space? So there's a number of different ways that they would sort of write that into their investment.

Nate Smoyer (28:00.897)
Mm-hmm.

Ned (28:16.938)
think about this as part of some kind of tech package. There are a number of different sort of amenities, or I guess amenities is the best way to think about it. There would be some kind of tech package where you would be bundling together, for instance, your internet, maybe some kind of trash service, digital access control, smart home. So that's another way that people are thinking about it is.

Nate Smoyer (28:39.286)
Mm-hmm.

Ned (28:43.058)
sort of there is that ancillary revenue that's going to come with it. The conversation around that always gets interesting because it's like, well, how would you attribute a portion of that to the managed Wi-Fi or the smart tech? Right? So it's impossible. Right? It's impossible to actually do that. It's like, if you're going to put new countertops into the building that you just built and you've got a

Nate Smoyer (29:02.989)
Uh huh, yeah.

Ned (29:14.13)
20% of the upgrade rent you're gonna charge when you do that rehab is because you decided to use this kind of stone versus that side of stone. So it's impossible to actually kind of get there. The other side to it that is harder, right? Where the costs and the benefits are simpler to sort of articulate in terms of a business case, have to do with things like utility savings. So we did a great study with a partner of ours, Conservice, many years ago, where we looked at

And we did, we analyzed this huge data set. What we found is that vacant units use more energy than occupied units. And that's not because for the most part they do, it's that you have these outliers, right? Somebody walks into a unit to do a job, it's in middle of Arizona, they crank the AC, they leave. No one goes in there for 45 days. Guess who pays for the utilities in a vacant unit?

Nate Smoyer (29:58.381)
Turn up the heat, turn up the air conditioning.

Ned (30:08.598)
The owner pays for the utilities in a vacant unit, right? So there's a number of sort of very specific levers that you would pull in terms of building a business case around utility savings, mitigation of impact of things like leaks, avoiding sort of vandalism squatters in vacant units. So a lot of it has to do with like, what's the lived experience of the operator that you're actually talking to.

Nate Smoyer (30:08.924)
I mean, yeah.

Nate Smoyer (30:24.693)
Mm-hmm.

Ned (30:34.474)
And if they've experienced some of these types of problems before, then they're going to be motivated in order to solve that. And they're going to appreciate a business case that would include that. Other folks might not think it's actually a problem. It's one of the things that's challenging, but it's also interesting about the space, is that the benefits that resonate with one group could be fundamentally different than the benefits that resonate with somebody else.

Nate Smoyer (30:39.321)
Mm-hmm.

Nate Smoyer (31:01.837)
Sure, yeah. Yeah, well, the interesting thing about that is, especially if you're in a concentrated market where multifamily has tended to always lead, today's inventory is higher end, it's a little bit further along, it's better thought out, typically comes with better floor plans, that sort of thing. And the older inventory kind of satisfies towards the bottom of the market. So,

If you're not moving towards the top of the market, just by natural way of the evolution of inventory, you are now moving towards the bottom of the market. So if you're just in an expense preservation mode and you wanna ride, you know, just a little bit of wave at the bottom of the market, maybe that's totally fine, you know, that's your jam. But that seems like what inevitably would become the case, you know, and...

You know, there's amenities. I think about this all the time. Some amenities are in, they're in places that, I talk about this in marketing, right? You have generating demand and generating leads. And generating demand is the hard part. And this is what the auto industry does really well. I think they do this better than almost any other industry, except for maybe fast food. Fast food generates demand for things that we've never thought of.

Ned (32:16.587)
Yep.

Ned (32:25.294)
Mm-hmm. Hmph.

Nate Smoyer (32:28.745)
and probably not in good ways. But cars, let's stick with cars for a minute. And I think the best example of this is the backup camera. You know, 10 years ago even, looking for a car, a backup camera wasn't really like a necessity. It wasn't a thing that you thought of to compare vehicles against each other. It would not be the thing that got you to the lot. And it still might not be the thing that gets you to the lot, but it's on a checklist. You know, just like the lane alerts.

Ned (32:30.634)
Right. Exactly. Yep.

Yeah.

Ned (32:45.739)
Mm-hmm.

Nate Smoyer (32:58.421)
you know, driving assist, the smart cruise control. Like these would not be things that we would have thought of like as criteria to buy the car previously, but because they become so ubiquitous, the bar has gone up. And now they're considered standard features. Like when is the last time a crank was put on, on the side of a door to literally roll the window up and roll the window down, right?

Ned (33:19.487)
Yes.

Ned (33:23.851)
Yep.

Nate Smoyer (33:27.433)
We are the last generation to know what it means to roll up a window. And so I think that, you know, it's very similar. You know, other industries will feel this exact same pain. As the technology and experience becomes prioritized and becomes more ubiquitous, it really creates a widening gap between that product and all other products on the market.

Ned (33:27.947)
Right.

Ned (33:52.15)
Yeah, I think it's a great example. And I think the key for us, the way that we look at it is, it's the experience first. The technology should be there to enable the experience that makes sense, that's practical, right? It should start with, you know.

Nate Smoyer (34:05.854)
Mm-hmm.

Ned (34:13.086)
I'm tired of being scared to death when I back out of my driveway. And then you arrive at, okay, let's put a camera in the back of the car. And then all of a sudden it's super practical. Everybody uses it every single time they leave their home. And now all of a sudden it's like, yes, that's what driving should be. I think it's interesting from a, think about it from an access control standpoint, what percentage of cars that are coming on the market now.

Do you not have to actually you walk up you open the door because of your phone you can get into your car It's the same way that the car starts That was would be crazy five years ago Five years from now if you go and you're you know, you're looking at new cars and you can't do that You know, it's going to stick out like a sore thumb so part of this I think to your point is

Nate Smoyer (34:42.034)
Mm-hmm.

Nate Smoyer (34:48.104)
Mm-hmm.

Ned (35:02.794)
I think it's a mistake sometimes to think about this as an amenity. I would think about this more as like, how does the building work? What is the experience of living in that building? What is the experience of working in that building? And then what are things that should be fundamentally more convenient or comfortable, or what are things that should be fundamentally more efficient that can't be because of the physical product itself and whether you're, you know, you're talking about

Nate Smoyer (35:10.123)
Oh, interesting. Yeah.

Ned (35:32.51)
maintenance, leasing, the fundamentals of property management, or you're thinking about, I'm living my entire life with my phone. I can get into my car. I can get everywhere I want to go. And then I get back to my apartment and I have a fob. I have a brass key and I have something else. And it's just like, what's going on here? What I'm hopeful about though, is that if you think about the technology as like, what are innovations that can be made in order to

Nate Smoyer (35:38.507)
Mm-hmm.

Nate Smoyer (35:51.603)
Right, right.

Ned (36:02.154)
Those class B properties, those class C properties, like don't just let them go to the bottom, right? You can make practical investments in those things to have those properties work better, right? These properties should have a longer life cycle than a car, I would say.

Nate Smoyer (36:12.373)
Totally.

Ned (36:18.514)
And like what it actually provides is it provides affordable housing in this country and we don't have enough of it We don't have enough housing in the country. And so making sure that the quality of the housing that is there Continues to you know to get better as there's more competition and there's more options out there I think that that's really important and I think technology can play

a big part as long as the way that we think about investing in that technology has to do with how do we help owners engage with this challenge that they have and how can we do it in a way where we're mindful of the fact that cost and benefit needs to be really straightforward otherwise there's risk associated which will prevent them from actually making that kind of investment.

Nate Smoyer (37:00.693)
Yeah, I appreciate that perspective. Ned, we're gonna jump down to the bottom of the show to a segment I like to call For the Future. For the Future is a segment when I get to ask each guest who comes on the show to give their best prediction space on the following four questions. Are you ready to play?

Ned (37:17.299)
I'm ready to go.

Nate Smoyer (37:18.633)
All right, let's do this. Number one on for the future, what does LevelM look like one year from now?

Ned (37:27.902)
I think LevelM looks largely the same. I think we're going to be really busy, I would say, a year from now. I think that we're going to see a return of transactions to sort of how things were. And so that means that there's going to be a lot of events where you're going to see sort of capital available to be making these kinds of upgrades. And LevelM will be in there sort of helping owners to upgrade those properties.

Nate Smoyer (37:56.809)
Number two, how long until the term smart building is essentially meaningless because all buildings will be smart buildings.

Ned (38:08.494)
I hope it's inside of five years.

Ned (38:12.926)
I do, I think that you're, I think, well, I'm gonna be wishful as well with my answer. I think if we on these types of, in these kinds of forums, we start talking about it the way that you were articulating the way that the car industry is going. I think we'll get there within five years, but that will require a lot of work in terms of definition and sort of shifting the mindset.

Nate Smoyer (38:13.106)
That's aggressive.

Nate Smoyer (38:19.387)
Fair enough.

Nate Smoyer (38:37.317)
And government years are about 40, 50 years out yet still, but we'll get back to that. I just, in my head I'm like, how long until the capital is considered a smart building? All right, number three here on For the Future, what's one industry trend you think will continue but you wish would go away?

Ned (38:41.624)
Okay, all right.

Ned (38:51.67)
Hehehehe

Ned (39:02.402)
I think it's related to the thing that you just said in some ways. I think that there is a trend that's emerged when it comes to the way that folks evaluate smart technology. And I think it looks like a sort of RFP checklist of features, but there's not nearly enough sort of attention put into how the technology actually works and how the technology is sort of designed for and deployed at any given property.

Nate Smoyer (39:15.67)
Mm-hmm.

Ned (39:31.998)
And I think that it causes vendors and owners to be focused on things that shouldn't be the primary focus. And I think if we shift that and we're having a more specific, more detailed, less superficial conversation, I think you're going to see more investment, more innovation into the types of sort of features and benefits that really drive value on a day-to-day basis. So I'm...

Unfortunately, I think that that's the way it's going to continue to go for a little while, but I would love to see it change.

Nate Smoyer (40:06.209)
All right, and the last one here, what's one thing you believe will dramatically change or fade away in real estate as a result of tech advances?

Ned (40:16.658)
I think the cost to ensure multifamily properties is going to go down significantly as we start to get to that point where buildings aren't buildings or smart buildings, they're just buildings.

and the way that we go about designing them and building them is thoughtful in its use of technology to reduce risk. I think that's something that has to happen. I think it's something that will happen. I think the financial incentive will get to the point where there's going to be a lot of motivation around it. So I think that there's that right combination of incentives where that's going to happen.

Nate Smoyer (40:53.753)
Ned, this has been great. I appreciate you coming on the show. I think this has been a little bit more in depth on the smart building, but even going beyond smart building conversations that we've had on the show, at least for some time. You know, before we close out, for those who want to get in touch with you and or they want to learn more about LevelM, where do they go and how do they do that?

Ned (41:17.73)
So go to level.co backslash multifamily. We've got a great website there, reach out to our team. We're sort of at all the PropTech events. We have level.am is our LinkedIn page. So we'd love to chat with you.

Nate Smoyer (41:34.529)
Great. And yeah, well, and of course, the one event of the year blueprint. Are you guys planning on being in blueprint?

Ned (41:43.626)
We'll be there. We'll be there. Yep. And I believe I'll be speaking. So.

Nate Smoyer (41:46.173)
All right, and those for the... Perfect, and for those listening, if you haven't yet booked your ticket for Blueprint, you can head on over to technest.io and grab yourself a nice little coupon discount on your registration for Blueprint. It is the event of the year, in my opinion, for the PropTech industry. Ned, hopefully I'll get a chance to see you there. Until then, catch you later.

Ned (42:11.426)
Thanks so much.

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