“We take that value creation reframe and we look at it through two ROI lenses. The traditional finance lens, which is return on investment, to understand the financial benefits.
And then the second is a relevance assessment lens, which is the risk of ignoring your risk of being left behind. And so when we apply these two ROI perspectives, you find opportunities to create the value, to innovate."
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Episode 57 is a conversation with Mandi Wedin, Founder and CEO of Feroce Real Estate Advisors.
We talked about the impact of ESG on the real estate sector and as Mandi recommends, we tacked on the "R" to make it ESGR.
Then we dove into what that means for smart building technology and Mandi's strategies for planning, decision making, and funding technology upgrades that mitigate risks and add value in this new climate.
Finally, we added on a potentially new tradition on the show, two truths and a lie. So make sure you listen to the end.
Without further ado, please enjoy Nexus Podcast Episode 57.
Mentions and Links
- Feroce Real Estate Advisors (0:36)
- Alaska Permanent Fund Corporation (3:34)
- BentallGreenOak (3:54)
- Maureen Joyce (7:52)
- BlackRock ESG Integration Statement (12:20)
You can find Mandi Wedin on LinkedIn.
Thoughts, comments, reactions? Let us know in the comments.
- What is ESGR and what are some examples (6:01)
- How ESG, and the E specifically, are changing real estate (12:38)
- How the real estate technology community can be more inclusive (19:09)
- How ESG is driving tech investments (23:59)
- How real estate professionals think about buying technology (32:39)
- The way to think about technology ROI in the ESG era (36:03)
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
James Dice: [00:00:03] hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
Episode 57 is a conversation with Mandi Wedin, Founder and CEO of Feroce Real Estate Advisors.
We talked about the impact of ESG on the real estate sector and as many recommends, we tacked on the "R" to make it ESGR.
Then we dove into what that means for smart building technology and Mandi's strategies for planning, decision making, and funding technology upgrades that mitigate risks and add value in this new climate.
Finally, we added on a potentially new tradition on the show, two truths and a lie. So make sure you listen to the end.
Without further ado, please enjoyNexus Podcast Episode 57.
Hello, Mandy. Welcome to the show. Can you introduce yourself?
Mandi Wedin: [00:01:10] Hi James. My name is Mandy Wedin. I'm the founder and CEO of furrows real estate advisors. Thanks for having me. I enjoy your podcasts. And I learned so much in the smart building foundations course, and I'm really happy to be here.
James Dice: [00:01:25] Yeah, it was so wonderful to meet you before the course briefly before the course, and then during the course, and now we get to hang out a little bit after. So thanks for coming on. Can you give us a little bit of an intro to yourself and your background?
Mandi Wedin: [00:01:39] Sure. So I spent 20 plus years on the institutional real estate side, running big portfolios of real estate at private equity shops, public equity, publicly traded real estate company, office retail, residential industrial, the four major food groups and all the major markets where the focus on value add.
So ground up development, redevelopment, repositioning.
James Dice: [00:02:06] People in real estate say focus on value, add, and I don't think any, like anyone outside of the business, like what does that mean?
Mandi Wedin: [00:02:14] Okay, good question. So to me that means a hands-on there's work to be done. So ground up construction is adding value just by taking that piece of land and converting it into a building.
And then. Redevelopment repositioning. Repositioning could just be retenanting right. You lose a tenant or you plan to reposition can also be converting from office to resi hotel, something like that. But hands-on and involved to get the return. Cause that value add is also on the return spectrum from core, which is like a bond valued like a bond, whether it is or not.
And then the value add is in the middle spectrum of returns and then there's opportunistic, which is the next level of attention and work to be done to get the return. Got it.
James Dice: [00:03:11] So if I do some sort of like huge energy retrofit and I'm a building worth more because it's not more sustainable and has higher NOI, then that that's a value add.
Mandi Wedin: [00:03:22] That would be a value added project.
James Dice: [00:03:24] Yeah. Got it. Okay. Makes sense.
Mandi Wedin: [00:03:26] So I was going to share, I, I. Got my start in real estate and commercial real estate through an internship opportunity. So I grew up in Alaska and the Alaska permanent fund corporation is the sovereign wealth fund for Alaska.
And they ask their external managers to hire interns for the summer. And so I was fortunate to get one at a firm called Kennedy associates Real Estate Council, which is now after many iterations . BentallGreenOak. Gotcha. Okay. I started out, I didn't study commercial real estate. I studied finance and languages, but I was lucky to get the internship opportunity and it really only took me a few weeks to figure out that I really liked this and I wanted to stay.
It took me another couple of weeks to get my courage up, to put my best black suit on and to go in and say, I like it here. And they said, great. You're hired. I was like, okay, this is how that works.
James Dice: [00:04:22] Awesome. And you've been, you've been in the, in the game ever since, ever since. So does that bring us up to present day?
So you left the last real estate company and started their own thing?
Mandi Wedin: [00:04:34] I did. Yeah. I started for us last summer, really. And. At furrows, we advise forward-thinking real estate companies on how to position their buildings and their teams for success. During times of disruption, we essentially reframe the challenge of change to be the challenge of value creation.
So. We're working with our clients to chart the path forward through a shifting landscape right now of commercial real estate technology and demographics. We take that value creation reframe and we look at it through two ROI lenses. The traditional finance lens, which is return on investment, to understand the financial benefits.
And then the second is a relevance assessment lens, which is the risk of ignoring your risk of being left behind. And so when we apply these two ROI perspectives, you find opportunities to create the value, to innovate.
James Dice: [00:05:34] Really cool.
You mentioned massive change. And one of the things I want to talk to you about is obviously ESU, right? So I thought it would be fun to unpack. You're an ESG expert. I thought it'd be kind of fun to unpack, you know, From a one-on-one standpoint, but then also take it all the way to how this impacts the nexus audience, which is people focused on, you know, the nerdier sorts of technology.
Right. So Why don't we just start with, What is the ESG and then we can kind of go from there.
Mandi Wedin: [00:06:06] So I'll talk about ESGR by talking about sustainable investing. And this is capital "S", sustainable and not just. "E", environmental sustainable, but the capital "S", which applies the discipline of an ESGR framework to achieve both strong risk adjusted returns and positive societal impact.
And so ESGR has four pillars interconnected, environmental, social, governance, and resilience. And these are standards that an investor or a company uses to screen potential investments. So the "E", the environmental is the criteria to understand how a company performances as a steward of nature. The "S", is how it manages relationships with employees, suppliers, customers, and the communities where it operates.
"G", is about governance is about a company's leadership, executive pay audits, controls, shareholder rights, and then "R" is resilience. And that is looking at how properties and businesses are prepared to address risk. Think about weather related events and global pandemics. So at its core ESGR is about creating long-term value through managing risk, building resiliency, and providing transparency and accountability.
James Dice: [00:07:34] Got it. And on the "R" piece, so I think, ESG is kind of showing up everywhere recently and it doesn't always have the "R". So why is that not always encrypt? It seems like it's really important and that it's in the time of the pandemic.
Mandi Wedin: [00:07:49] It is, right. And I give credit to Maureen Joyce and the AEW team for bringing the "R" to the forefront, adding it to the alphabet soup. And many people talk about whether the "R" should stand for returns since we don't have that word in the four-letter soup. And my take on that is that. ESGR is about how you deliver the financial returns and measure the risk. So "R" is about resilience, which is an important piece of understanding the risk and executing a resilience plan means protecting your properties from physical risk and protecting the investment from transition risk.
So think about the climate related events and not just as the building sustained, damage or survive, but can it continue to operate during that climate event? And you're right. We're seeing more and more of the "R" now because we've experienced the COVID 19 pandemic, which has highlighted the value of resiliency.
Think about how quickly people's teams and companies could transition to remote working. And we've been talking about remote working and planning for it for years. And guess what? We did it over a long weekend. Soif you did it well, you had probably a more resilient system and plan in place.
And in practice for people on the ground, people operating in developing and designing buildings, what "R" looks like installing a white roof in a hot climate to reflect the sun. It looks like installing native plants to minimize water usage or to reduce or use zero water in water stressed areas.
And hurricane Sandy taught us that you locate your mechanicals on your roof, not in your basement. And then we, we also look at it as a financial asset though, valuation resiliency. So how the capital markets view the asset and its ability to withstand a shock. So big picture is the real estate going to be relevant in 20 years, right?
That's another "R" could be returns, it could be resiliency. , could be relevancy. Okay.
James Dice: [00:10:12] And with the RPS, is it so like, you know, in my course, I talk about quantifying the ROI. Is it, can you, can you quantify the, the relevancy piece or how do you, how do you help them building owners make that sort of decision?
Mandi Wedin: [00:10:27] Yeah, it's around a being risk of the risk of being left behind. Like, do you even meet the minimum standards? Which for an office building that needs to be leased or for an apartment building that's leasing out, did you make the tour list or not? And then on the other end of it, right, it's about how are you going to survive a shock to the system, the COVID-19 pandemic or a weather related event.
And does your building, does your asset, does your business survive, maybe even thrive, but do well during that And be a beneficial part of the community and support things and make things better.
James Dice: [00:11:06] So, yeah, a hundred percent. So the two, like headwinds here that I'm feeling here are, is like investor driven pressure around sustainability.
Well, three headwinds, overall diversity equity, inclusion headwinds, right. That sort of drive the yes, I think. And this and then The. Pandemic obviously. Right. So are there any more that are kind of all coming together here to cause this you know, intense focus on the SGR
Mandi Wedin: [00:11:38] right now? Absolutely.
Yeah. And I look at it from sort of two sides of the ledger. There's the carrot side and there's the stick side. So on the carrot side, it's about follow the money and that's like, you talked about right. Investor demand. As well as customer demand. So ESG are, is now a boardroom topic and that's both for occupiers users and investors.
And in the last 12 months, it's gone from being a question that's on the list somewhere to now being gating question. Hmm. And it's a must have. Absolutely. Okay. And a lot of people first heard of it when BlackRock issued their ESG integration statement in that's when it sorta came to more people's understanding.
And I mean, that was an $8.6 trillion portfolio move. Right. So that should have come to there. Yeah. Understanding at that point in time.
James Dice: [00:12:37] Okay. So let's talk about how this is changing the business of your clients, right, and your former teammates and employers. So I thought it'd be fun to walk through each sort of level of the stakeholder hierarchy here. We've touched on investors a little bit, but how does this hit investors first?
And then we can kind of walk through the other levels down from there.
Mandi Wedin: [00:13:00] Sure. So the investor side, I mean, there's, there's 2,400 investors who've signed on to the UNPRI, the principles for responsible investment. That's like $85 trillion assets under management. It's a focus, right? 70% of institutional investors have an ESG policy.
So it's happening and they're figuring out how to apply that framework to meet the goals that they are focused on.
James Dice: [00:13:26] Okay.
Mandi Wedin: [00:13:26] I mean the other big piece of this on the, who's it impacting following the money is, are the stakeholders, the consumers, right? Real estate investments successful if, and when tenants are willing to pay for it, and people are paying attention to real estate now.
And they want it to be a part of the solution. So that's on the tenant side.
James Dice: [00:13:48] Yeah.
Mandi Wedin: [00:13:49] If you think about it from the building ops side, one way to also look at it is back to the carrot and the stick, the stick side of the ledger, and that's regulation around carbon caps. We're seeing that, right.
That's how cities are leading the way to address climate change, because as you know, the built environment contributes almost 40% of the greenhouse gases. And so in New York you have New York, local law, 97. And in DC, you have BEPS Building Energy Performance Standards. And these are both systems for tracking a building's energy, performance, energy, efficiency, and improving over time.
And so when you think about how the buildings are being used by humans tenants, and then how they're being operated by building engineers, this is a big piece of people's thinking so that you can comply with the standards, because the financial penalties are not good, but a financial penalty for non-compliance is just the tip of the iceberg.
James Dice: [00:14:51] Yeah. And the penalty being, tenants don't want to renew, tenants don't want to even touch your building and don't even want to take a tour.
Mandi Wedin: [00:14:58] Right. So then who's going to lend you money on that. Right? Think about finance lenders perspective, and who's going to buy it with, how do you sell, how do you get value for a non-compliant building?
James Dice: [00:15:08] Absolutely, absolutely. So we have, it seems like at each of those levels, you know, boiler room, you know, building operator REIT, or a portfolio manager level, however you want to think about that, investor. It's different things, but it's all pointing in the same direction. Is that kind of how you're thinking about it? Different carrot and different stick in certain areas.
Mandi Wedin: [00:15:32] Right, There should be a common theme of common motivation, and then it's how everybody plays a part in that. Achieving that goal, pursuing that motivation. And what's interesting is this decarbonisation regulation is an example of how it touches that entire chain because the building team, the building ops team are front and center, and then they're connected to the company running the property, property management, up through multiple layers, potentially like you noted of ownership, who's doing the reporting and who's interacting with the investors who were demanding essentially transparency through this reporting. Okay. Oh, it's a, it's a string that runs through that whole set, the whole layer of participants.
James Dice: [00:16:17] Yeah.
And so, is this, so where are we at, like in the long-term flow of this? Right. So people have made these sort of reporting, you know, commitments and then reporting. They're trying to converge on like what the reporting looks like at an, all these different levels. Where are we get to action? Like, are we starting to act now or these companies, or is it like, how, like, are we still kind of trying to figure out like how we even measure and report on this stuff?
Like, where is it in the arc of, of where this is going?
Mandi Wedin: [00:16:49] So it's all of the above because there's such a different and wide spectrum of owners and operators. So the big institutional investors, the big global real estate investors have had this in their perspective they're planning, right? Cause they're keeping their eye on the horizon because this exists elsewhere in the world, right?
This is not only happening in the US. So they've already dealt with decarbonisation elsewhere and they're figuring out how to apply it here. And they've already made incremental movements towards achieving it from a timeframe, just a logistics and a stacking perspective, the recording measurement, setting the baseline metrics started this year for some of these, right?
So then they're going to get measured over a five-year period near the opportunity to hit that or make adjustments in order to hit it by a certain timeframe. So in some cases it's invest now, figure out what your iterations are, if we make this investment, are we certain that we're going to get there?
Can we make these two investments? The question I ask clients and we work on together is if we make this investment, we will meet this threshold and is there a second order benefit where we can maybe charge higher rent? Or just maintain rent? Or get a higher renewal percentage rate? So we get both better investment performance and we get better building optimization performance, right.
Because in many cases you can do both. Okay.
James Dice: [00:18:23] So when I hear you talk about this, it seems like the movement, at least from what we've talked about so far is all on the E. Column right. A little bit. What about the S w what what's happening in the real estate industry on the S side?
Mandi Wedin: [00:18:40] Yeah. So a handful of things that are interesting on the supplier vendor side, right.
We are thinking about who are we buying services from? Who's Supporting the building, everything from who you're buying your toilet paper and your paper goods from, to who's handling your waste. So waste diversion is a big question. Target. It's hard to track. Where does your waste go? So working through that.
Okay. A lot of people put, like you noted, put DEI in the "S" bucket, which it could be in the "S", it could be in the governance, it could be in the resilience because as you know, investment decisions are still made by humans today. And we make the best informed decision when we have access to multiple inputs, multiple viewpoints, multiple lived experiences. And it's with these multiple inputs that we can widen our field division.
We see more. We see more opportunities. We see more risks. We see more pathways and DEI is the shorthand for widening our field of vision, Diversity, Equity, Inclusion, and Belonging. Those are all the words that we use to describe our work, to bring more people to the table. To provide a space for people to share their insights and their wisdom, and to ultimately drive better investment results.
Because bringing more perspective and more voices to the table provides a competitive advantage. It provides an agility advantage. It provides a talent advantage and those all lead to those better results. Because it's not news that the commercial real estate industry has only been working with half of the talent pool.
Think of the amazing things that our industry can accomplish when we access all of the resources, all of the talent pool.
James Dice: [00:20:32] Absolutely. Yeah, I think it's probably less than half. It seems like to me, yeah, very, very white male heavy, especially as you get into smart building technology, right. Get into controls.
Get into, not so much energy management, but get into controls that the other, the tech folks are definitely skewed in one direction. How do you think we can improve, like in the Nexus Community, you know, those things that I have control over, how do you think we can improve of on getting that diversity of input, diversity in the community?
Mandi Wedin: [00:21:06] So widen your field of vision, take your blinders off. So do you literally write, like put people at your table, build your team out who see and have different networks and connections to help bring more voices to the table, more people to your team. And then if it matters, you measure it. So set yourself some, your team, some goals, plan, you can share them broadly, or you can just hold yourself accountable to it. And then figure out what's working, where you can do better, and how you can meet your goals.
And you keep iterating on that. Right? Think of it like a business plan. If you we're launching a new business, you were allocating resources, allocating capital allocating time, you would outline all those things. You'd set what your goal is. You'd set what, how you're measuring it and then you'd report on it.
Right? So. Apply some of that discipline to bring in more voices to the table.
James Dice: [00:22:00] Yeah. And one of the things that I've been enlightened on recently is the aspect at which we white males are inviting all perspectives to come to the table. It's not, it's not a passive thing, right. It needs to be an invitation that makes people feel welcome to join and contribute and speak up and raise their hand.
That kind of thing.
Mandi Wedin: [00:22:24] Yeah, that's the, the diversity, the equity, the inclusion and the belonging. Right? A lot of people describe it as the welcome the invite is being invited to the dance. And then once you're at the dance, the inclusion is being asked to dance. And then belonging, the "B", is choosing the music or having influence on the music of the dance.
James Dice: [00:22:48] I love that.
Thank you for sharing that. That's awesome. Cool. And so is that aspect like coming to the ground today with, with the clients that you work with? Is that something that's just like on the east side, all over the place or is it, you know, more near term or long-term
Mandi Wedin: [00:23:09] yeah, I would say that it's It's lumpy, but it's, there's forward progress.
There's in the last year, there's been so much discussion and different level of scrutiny and really it's sort of light. That's been put on the diversity, the equity, the inclusion piece of it. And so. There's been progress made in certain areas. And now we just need to see sort of, instead of the bubble being pushed out and only certain areas that we get a bigger, broader forward momentum.
Absolutely. We are capable. We can do this.
James Dice: [00:23:43] Yeah,
Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
This course is also for you. The alumni are raving about the content, which they say pulls it all together, and they also love getting to meet the other students on the weekly zoom calls and in the private chat room, you can find out more about the firstname.lastname@example.org lab. Start online. All right, back to the interview.
So as we're talking and kind of setting the stage here I've been thinking about all these use cases. That's how my brain works. Technology can help your technology can help your technology. So let's talk about how, I mean, I'll just abroad, let's start broad.
How has this driving technology investments with real estate owners
Mandi Wedin: [00:24:38] Yeah, so I look at that as the, sort of the intersection of investments, technology, ESGR and where you see those things come together. And we remind ourselves, and it's valuable to keep your eye on the horizon. See what's out there, what's coming.
And at that at the horizon, we see the intersection of commercial real estate technology and demographics. We also see disruptions and collisions and opportunities there. And one way to do this, which provides interesting insights, is to look at how all three of these forces are interrelated and interdependent and look at them from a perspective of
different major forces. So start with scale, right? They're all economy moving size drivers. And then look at it from an inertia perspective, a body in motion remains in motion. So for demographics, this massive wave of demographics that's happening is happening. And it's moving at its own pace. And then real estate has its own inertia, right?
It's a large built structure. And talk about pace, talk about speed, they all move at different speeds. They move at different times. Tech is faster, presumably. Real estate is slower and demographics, like we said, are steady and visible. Okay. And then I also like to look at it from a tipping point perspective because the premise of a tipping point is once you pass it, you cannot go back.
So, one thing that to think about is with each increase in internet speed and computing power, we only expect faster and better, right? We're not going back to DSL. We've only learned that more during this last year of being on video and zoom calls, what the expectation, the service level expectation is.
So to talk about specifically, like where it's happening. So real time, couple of things, one that I've been thinking a lot about is wellness in the workplace. And that's a broad opportunity, right? We haven't, we can improve wellness in the built environment in the workplace. That's offering healthy food
choices. That's daylight. That's healthcare. The list goes on and where I've been spending a lot of time, and this is relevant to you in some work you've been doing is on indoor air quality with real time monitoring and the ability to use that data to then take informed and immediate action, which improves the indoor air quality.
And it reduces the energy usage. Because at the heart of it, the use of this IQ data is about optimizing resources and results. Yeah. When we have this data, we can optimize human performance by providing a space that supports their wellbeing. We have this data, we can optimize energy resource usage through active management.
James Dice: [00:27:37] Totally. Okay.
If I can just restate that back to you. We can't look at this in terms of the four pillars in each individual pillar, like let's improve that "E" and then let's go over here and improve the "G", from a technology standpoint, just like everything else, it's looking at things holistically.
It seems like to me, because tech can impact all four pillars, potentially. I don't know that it can, but it seems like probably it could.
Mandi Wedin: [00:28:02] Yeah. Yeah. They're all interconnected, right. Because they engage with humans. Right. So we're all it's such a multiple complex system, but yeah. I mean, just thinking about indoor air quality monitoring, right.
And that example, right. It fits in the "E" from an energy usage, doing that better. It fits in the "S" piece in the "R" piece, right. Because just proving the air is a no. And by reducing your energy usage, right, you reduce your impact on the climate and those resources can be allocated elsewhere.
Like this technology exists, right? People are using it and forward thinking companies are iterating and adjusting and finding ways to apply this and use this data where they can achieve second order benefits. Right. Can you heat your building faster because you communicate how much you care about the wellbeing of the people in your building, whether it's an employee who's in an office building or it's where you are exercising in a fitness
facility or it's because you're shopping there. Right. All of those things. Right. You can find that second order benefit. You've hit the ESGR on multiple notes.
Nobody: [00:29:17] Absolutely.
James Dice: [00:29:17] Okay.
So with the clients you work with. What, what, like roadblocks, are they coming up for grants that you're helping him with and sort of in general, how can we as a community kind of help them figure all of this out?
Cause it sounds like just, yes, there's a lot of headwinds, but they're coming into different directions and showing up at different times. And there's a lot of pressure on the building owners right now. So how can we, as, as providers and consultants and technology Fisher,
Nobody: [00:29:49] Renata's help with this.
Mandi Wedin: [00:29:51] Yeah.
So I have a handful of things think through on this and share with you and get your take on. So the first is just follow the money, right? It's a capital allocation conversation. So be prepared to enumerate the value like and the smart buildings course, right? The ROI. What's the financial benefit.
What's the risk. What's the relevancy assessment. And be able to show multiple layers of that, right. They don't need to be huge or outsized. You just need to think about it and provide the client the opportunity to understand that. Okay. And then there's just literally a capital allocation decision, right?
Like you have a limited bucket of money, where are you going to put it? So how can you either grow that bucket of money or more efficiently use it? So that's a financing and access to capital discussion. There's private financing vehicles, right in tech and green real estate. All sorts of things. Wall street, the three of the big banks last month announced that they're going to invest 5 trillion over the next 10 years and sustainable investments, right?
So that money exists. Another thing that's helpful for clients and helping them understand the value and, and seeing the big picture for me is reframing technology as a value creation tool. So for this to work, it needs to have an integrated solution. Right. We approach it as Part of the system and not just being bolted onto it.
And when we do that, then we find the value, we deliver better results. So I sh the, a fun story that I share around this is in my house, I'm not the cook. That would be my spouse. He's much better at it and he likes to do it. So then my role is to facilitate, to support him, to enjoy his cooking. Okay.
Early on my go-to gift for him was a kitchen tool as shiny cool new kitchen gadget. And after a few years of these Our kitchen was full of what turned out to be single use kitchen gadgets, clattering up our counters, our cabinets, our drawers, and he very graciously told me to stop, stop buying kitchen items for him that weren't helpful his criteria, where it needed to make his life easier and needed to take care of a rote part of his kitchen routine, or it needed to create a more sustainable food plan.
And if it didn't do those things, he didn't want it. And I share that story because that is a way to think about thoughtfully implementing technology in our real estate. Right? So you have to find the integrated solution. Don't just bolt things on. And along with that, look at technology as a tool that helps you achieve your goal.
So first you figure out what's your goal to find success, make a plan, use technology to achieve it. Also, don't forget that. You need to practice your addition and your subtraction skills. So spend time thinking through what you can take away and what you can add so that you don't get a Frankenstein solution.
That's messy and short-sighted.
James Dice: [00:33:13] Absolutely. And so how do, how do you work with your clients too? Because I imagine that when your clients go to go shopping in the marketplace, it's it's sort of tough to get that philosophy back. Right. So how do you help help them with that?
Mandi Wedin: [00:33:30] Yeah, it's a lot about framing it and how they're used to investing, framing it and how it fits within their understanding of real estate and what the value proposition is.
So in real estate, we're used to investing based on relationships and recommendations. So helping find someone else who's used it or where this has been applied use cases are great. Somebody who knows somebody within their circle is a really, it's a, it's a helpful alleviator of the change that they're dealing with, that they didn't choose.
Right. It's being forced on them as how a lot of times this feels. And as you know, right, the marketplace is so big and disparate for these different, they're like different little solutions that are out there promise to solve everything. And some are very good at solving one. And so the big challenge usually is understanding the problem, defining the problem.
So then you can define what success is and somewhere in there, you'll find a solution it's tack and human applied, usually to get you to that goal, the success that you need.
Nobody: [00:34:40] Awesome.
James Dice: [00:34:41] Totally. So where do you see? So you took the course and for those that don't know, the course that Manny took is my foundations course.
And it's. Gets into the weeds on networks, you know, different systems in the building, the state-of-the-art, you know, new technologies. And so I'm wondering, you know, coming from the perspective that you came from, and then you took that course, Where do you see like the overlap in what we do? Like what, what you, what do you do in what I do where where's the middle of the venn diagram, I guess?
Mandi Wedin: [00:35:14] Yeah. That's a good question. So I feel like the middle is the person who like in the class you talk about is the champion, right? But identifying who's the person who, or who's the team, but really needs to, accountability needs to sit with one person who says, okay, this is a way to make money for our investors.
This is a way to deliver better service. This is a way to be a part of the solution for addressing climate change. And here's how we're going to go find it. And we're going to talk to everybody on the team, right? And we're going to go talk to the people who are the practitioners and the designers and the implementers of this, the people in the built tech world, right,
in your smart buildings world, so that we can understand more of it. And it's there's that overlap it's in the middle that says, okay, so it's yes, it's a financial decision. Yes. It's addressing climate change. Yes, it meets our ESGR framework. Yes, it improves the tenant's experience. And when you find that overlap that we work on, right,
then you can move forward. And sometimes it's it's more clear than others, but it's there.
James Dice: [00:36:34] Absolutely.
How do you, after you took the course, think about, do you think about ROI differently, or do you think about ROI like you always have? And I guess, what can you teach me about ROI? Because I've shown you everything that I know.
Mandi Wedin: [00:36:52] Well, I would say that taking the two different ROI lenses that we talked about, right? The return on investment, the financial perspective, and then the risk of of ignoring. So risk of ignoring is like the resiliency and the relevance lens. And when you reframe the challenge with those two things, then you see all these gaps and it's really in those gaps where you have an opportunity to innovate and to make changes.
And there's a handful of places where there are, I think there are big gaps where you can make progress. So one is the training and the skill sets for your team to use an agility mindset. So a growth mindset, a resilience mindset, and agility mindset. That's the concept that you can try new things. You can fail on the first try.
You can fail on the next tr y, but you're going to iterate. You're going to adjust. You're going to learn. And with that, you're going to get a positive outcome. So, look around and see which teams does your team have those skillsets and how can you apply them? Because that's how you move through the cloudy waters and get to where you want to go.
And I think the another one is a gap on the expectation from an investment timing perspective. So that's applying short term repeatable return expectations to long-term lumpy, fixed assets. And this isn't new for real estate. Right? This has been a challenge and it's been resolved, but it's now evolving yet again.
And so the question is where can you apply technology that you can create and in that phase of time innumerate the value that you've created along the way, as well as for the longterm. So what can you do now to say, oh, this building tech project addressed this and either maintained value or created value that we can recognize today and will apply in the longterm.
James Dice: [00:39:01] Interesting. Okay.
Mandi Wedin: [00:39:03] Another one is the risk adjusted return expectations. So, there's a gap right now in what the market is appropriately identifying and therefore pricing for varied levels of risk. Okay. This is where the, "R" piece of ESGR comes in. And a perfect example is climate change impacts. The market is not yet appropriately identifying or therefore valuing the risk of climate change impacts to real estate and to businesses.
So that's where there's an opportunity to apply technology to apply solutions.
James Dice: [00:39:41] Yeah, totally. Yeah. I used to have a university client that I think I told you this, use is social cost of carbon, SCC I think it is. And it severely helped every project's ROI because you were going to get to include that
in the payback criteria. So yeah, I think that needs to happen more and more and more. It seems like. Is that, is that the way that you see people doing it when they choose to do it?
Mandi Wedin: [00:40:06] Hmm. Yeah. When people look at it, right, because think about it. The other word for gap is arbitrage and in the financial world, arbitrage is good.
Right? So people see that, then they can move into that space and they can reap the rewards. Right. So that's a way to sort of highlight here's how you can make, tack a value creation tool.
James Dice: [00:40:26] Yeah. This
is an area, this ROI conversation is an area where, when I work with vendors as in my consulting business, I think that there's a lot of vendors that are still sort of stuck on, you know, I'm going to provide an energy only ROI, and their reasoning is very sound,
in that that's a lot of times what people will accept. And I think the reason I wanted to continue asking you about this is because that's changing. It seems like right. That that's how it used to be. Like the only thing, like, and even as changing in multiple ways, right? It's changing all the ways that we've talked about.
It's also changing in that a lot of people have done energy projects and haven't quite seen the ROI, right? So the ROI conversation needs to continue to shift. It seems like to me and it continue, it always needs to be tailored to whoever was buying, but that person buying is now, you know, looking at a bunch of different factors and they make their decisions.
Is that kind of how you see things?
Mandi Wedin: [00:41:23] Yeah, I agree. Yeah. When I think about like understanding ROI for a client, right? Helping people make these decisions, which ideally you help them understand it as an investment decision. So you're chasing value, creating value instead of a pain avoidance decision, like an expense decision.
So if you can have that and you can have both conversations, right. Because both are relavent, then it's important. But to your point, first, you need to be able to speak their language, right? Because across the team that makes up the client people with different roles, different skills, and your team needs to have people who can speak the different languages for the different roles.
So when you're talking to the finance team, you can speak the finance language of ROI and gap. And when you're talking to the IT team, you can speak the language of IT, cybersecurity and network. And when you're talking to the property operations team, right, the the property managers, the engineers, you can speak their language.
And so then you understand what they hear from you and you can understand what their challenges are. Because I think the other, like the other motivator to think about for ROI is understanding their why. So why is understanding what's important to them? What's their motivation? Why are they doing this?
Okay. Are they doing it to meet a corporate goal? Is this driven by a tenant? Is it investor mandate? And when you know what their why is, then you can figure out what they're trying to solve for is, what had defined the ROI. I also think it's important when you, so pair understanding the why with understanding how this fits into their big picture.
So both within that company's framework and the industry framework. So what does this project mean internally to the company? And then how does it position the company within the industry so they can understand how they value it and what it means for them in the near term, medium term and longterm.
Nobody: [00:43:28] Absolutely.
James Dice: [00:43:30] I love that. I think I'll just take this conversation and just add it as a lesson. Of course. Thank you.
All right. So you had a great idea to add a little bit of fun into the end of the episode here. We're going to play two truths and a lie and you're gonna go first.
Mandi Wedin: [00:43:49] Okay.
Okay. So first is I drove cross country with my grandparents two summers in a row. Wow. Okay. Second is I drive an electric car.
Okay. Third is the first car that I purchased only drove in reverse.
James Dice: [00:44:12] Wow.
That's a tough one. I'm going to go just with my gut and say you don't have an electric car.
Mandi Wedin: [00:44:17] Okay. Nicely done. Yeah, I used to, but I got rear-ended so I don't have an electric car right now, but that'll be my next one. Okay. Nice. Okay. I want to hear your gut. Why did I not, why did you think I didn't have an electric car?
James Dice: [00:44:31] I don't have any explanation for why that came up. I just had to listen to it. Usually what I do is when I get a gut intuition, I do the opposite thing. So normally what I would, I don't quite trust myself, so I would have picked the other two, but I just felt like I had to go for it there.
first tell me about your cross-country trips with your grandparents.
That sounds great.
Mandi Wedin: [00:44:54] So. I grew up in Alaska and my maternal grandparents, my grandfather's from south Boston and my grandmother was from Montana and they lived in Alaska. And so they would drive from Alaska to Montana, to Boston and back. And for two summers, I got to ride with them cross country. So.
It's awesome. I don't have any desire to do cross country trips cause I've done it a couple of times and more, but I do love and enjoy exploring all over in the middle of the country. That's so cool.
James Dice: [00:45:33] Probably remember that for your whole life. All right. Okay. I realized that because if I'm going to keep doing this on the show, moving forward.
I need to like create different themes. I think I'll create different themes for what, the ones that I bring to the table. So here are my three. I once had a food blog where I created the recipes and took pictures and posted them on, on the blog. And I had a newsletter just like nexus and all that. Number two, I am vegan ish.
And then number three, I do all the cooking for the family.
Mandi Wedin: [00:46:10] I'm going to say, you don't do all the cooking.
James Dice: [00:46:14] You got it. You got it. I do all the cooking. My, my partner does all the food prep. And so. She makes all the like pre-made meals for the week, which helped me get more work, done, dinners and stuff, you know? So that was fun. I think, I think I'll, I'll keep that in the show.
I mean, a little fun at the end. Cool. Well, thanks so much for coming on the show. And it's been so nice to get to know you. I was the last couple of months.
Mandi Wedin: [00:46:45] Yeah. I really enjoyed it. This is fun.
James Dice: [00:46:51] All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.