This is an interview you all will not want to miss.  I had the absolute pleasure of talking with Cris Kimbrough, PhD, Chief Strategy Officer of SKBM Smart Tech, where we dug into what people are currently deploying in smart tech, how property insurance access can be affected by smart tech, and then had some fun discussing how property data can be used in interesting ways and how that is shaping the future of smart tech in multifamily.

SKBM Smart Tech is actually an Elite presenter at our upcoming Multifamily Demo Day, so please join us to see their solution in action: Multifamily Demo Day

Brent Williams: Hey, everybody. Thank you for joining me today. I am so lucky to have Cris Kimbrough here of SKBM Smart Tech, and I am a huge fan of hearing the founding stories of companies. Where did they come from? How did they get their start? And what are they bringing to the industry? Because right now, there are so many amazing new, especially from the technology side, solution providers that are really supercharging the evolution of multifamily.

Cris, thank you so much for joining me today.

Cris Kimbrough: Oh, I am so happy to be here, Brent.  Any chance to talk to you is always good, right?

Brent Williams: I feel the same. I feel the same. Okay. So let's go back in time a bit and walk me through the founding principles of SKBM Smart Tech.

And so you can educate the audience here about what you're all about and then how you came to be.

Cris Kimbrough: Absolutely. So SKBM stands for Scott Keen and Bill Meyers. They are our co-founders, CEO and COO respectively. They've been working together for quite a number of years, started out in doing things like building hotels for Disney.

Certified general contractor having done very large projects, they moved into single family rehabs, and were doing a tremendous number, hundreds a month of rehabs for very large single family owner operators. And then in 2018 it became clear through some of their relationships that there was a very large need for superior developer partners in multifamily. There are a couple of large players that came into the market and they were seeing more IOT, more access controls, that kind of thing being deployed in multifamily. So they saw the need for a solution for deployment in multifamily.

And that's when they made a change. They found it as SKBM Smart Tech in 2018 and it really has been traditionally focused around white glove installation and Q/A Q/C . And one of the reasons that I wanted to work with Scott and Bill is it's all our own crews. We've got over 200 crews crew nationwide.

We're not a call center. There is one throat to choke when it comes to deployment, and we've installed over 450,000 units of smart home. And we're darn good at it, right? After that many units we've got the process down pat at this point. And then we've also installed over 2,000 properties worth of access controls.

We've moved into other installation types, but when you talk about the founding, it was Scott and Bill really seeing where the trend was in terms of the market and where they could best serve using this incredible team that they had built and guys have all been with us 10 to 15 years.

It's been extraordinarily successful on the GC deployment side for SKBM.

Brent Williams: That's wonderful. As I was going through everything that you all do, you cover a lot of bases when it comes to smart tech. And it's interesting because a lot of times one of the big topics is point solutions versus bundled.

And a lot of times we think about that from online solutions, like online leasing, that sort of thing. But it really applies the same way to smart tech, where you have point solutions for managed wifi or access control or all these different things, whereas you all really do about everything and you pull it all together. It is cohesive group. Tell me about how, when somebody first comes to work with you all?

Cris Kimbrough: Yeah, so it's a very consultative process, which we don't charge for the consultation.

That's just part of what we do. And so Brent, I know you know this about me, but I'll share that I've only ever sat owner operator side before. So I worked for Greystar and CBRE doings building technology and one of the things that I realized through that experience is that as a technologist, I've heard hundreds of pitches and as a technology provider one of the things that you really have to understand is real estate.  It's great to bring a piece of technology to the market, but if you don't understand what needs you're actually solving for, such as something that's tech for tech's sake, or maybe it's something that's not going to integrate later and is a point solution.

But when you work with SKBM, it is very consultative, and we do talk to you about things like investment strategy, what use cases you're trying to enable, what your budget is, what's your hold period, and what's your long term strategy so that we can help our clients be strategic and really talk about technology strategy over time.

Brent Williams: Talk about that, Cris, the short term versus long term because right now we're in a very unique market with high interest rates. Can you tell us what you're seeing in the market, first of all, on what people are looking to deploy.  And then also how does that interweave with a long-term strategy?

Cris Kimbrough: Yeah, I think there's a lot of focus [on short term versus long term] because there isn't a lot of money in the market right now. And we realized that, months ago, we knew that this was going to be the case, but there are still needs that need to be fulfilled and capital being expended often around risk management. So securing buildings, making sure the state of your apartments, what appliances might fail, that kind of thing. Making sure you have the best fire detection, fire prevention systems in place.

But one of the driving factors everybody knows is that insurance rates are astronomical right now. And so we are seeing there is an interest in risk mitigation currently in the market. But what you want to be careful about is, okay, I'm going to secure my building this year and I'm going to choose this access control system.  And then next year, your strategy is to move into more in unit devices. You don't want app fatigue. You don't want a bunch of point solutions in place. You want something that's integrating both. You don't want to make your property staff life harder and you don't want to have your tenants having a bad experience because they're having to go to 87 different apps.

So one of the things that we do, and I think everybody needs to pay a lot of attention to, is what that long-term strategy is. Is what you are deploying today scalable to other devices in the future as your needs evolve and as capital becomes available. And so that's what we're seeing currently, is there's a lot of leak detection.

Leak detection is huge right now. We're talking to clients that only want leak detectors right now. And our job is to say, great, we can help you with that, but let's think long-term to make sure that we don't recommend leak detectors that then next year don't integrate with your smart thermostats when you decide to move in that direction. Absolutely.

Brent Williams: So when you talk about insurance, rolling out something like leak detection or fire suppression is not only going to be a function of actually stopping the damage, but then are they also getting expense reduction through lower policy premiums?

Cris Kimbrough: It depends on the insurance company, honestly. And there's been a lot of chatter for a couple of years now around premium reductions available for deploying leak detectors. I think that's fine. And it was all anecdotal. I've seen some recent data that unfortunately I can't share, but we are seeing that there are some instances where insurance companies are offering a discount.

We are talking with a leak detector supplier, and one of the things they said to us is they had several owners come to them and say, our insurance company is telling us that they won't even insure us if we don't have leak detectors in place.

So I think you're seeing some movement in that space, but it really does depend on the insurance company.

Brent Williams: So it's needed, but not nearly as beneficial to the property if they just have to have it. It's not a reduction [in premiums, necessarily].

Cris Kimbrough: When you think about things like operational efficiencies, where there is a small leak maintenance is notified immediately, so you're preventing catastrophic loss like nobody wants. Yeah, I have a leak that goes undetected in a mid rise, high rise and then you've got not only one apartment with a flood issue, but all the apartments below it.

Brent Williams: And if the insurance company makes the property whole, that doesn't mean that they're going to compensate for all the stress, all of the residents frustrations, and all the ancillary things that come into play when you have a leak like that.

Cris Kimbrough: Yeah, that's what I was going to say. It becomes a tenant experience issue too, because everybody knows, if you've got a tenant you've got to move out because you've got to repair a leak or a flood, that tenant is undoubtedly going to go leave you a review.

So when you think about these technologies, you have to think of all of the benefits not just that one thing. Okay, I'm detecting a leak, but how does it affect my property staff? How does it affect my tenant experience?

Things like that. There's a lot that goes into it.

Brent Williams: So right now it's not just throwing a whole bunch of money at things because there's not nearly as much money sloshing around as there was a couple years ago. So they will be more strategic right now. Let's fast forward a year or two, and are you hearing people talk about their strategic plan in the medium term? What are the next things that they're really wanting to dive into?

Cris Kimbrough: Yeah, I think I think there's some acknowledgement on the part of multifamily that technology is going to become table stakes.

I don't think we're ever going to be 100 percent smart home or 100 percent managed wifi. But there is a certain amount of keeping up with the market that I think people are thinking about long term. I think they're thinking about connectivity long term.

It's managed wifi, bulk wifi, or you can stay retail. But when you start thinking about connectivity's digital infrastructure, which commercial real estate has done for a number of years. As we go forward in this connectivity piece, it's a struggle getting these IOT devices connected. So I think we're going to see definitely more focus on connectivity.

Everybody wants to talk about AI. There's going to be more AI, but I think the AI is going to be focused. There are a few places like improving communications on site or with prospective tenants through using AI to enable chatbots and things like that are really getting more sophisticated. But also using AI to really start using all the data from these technologies we're deploying. Think about a thermostat and detecting run time, what the lows are, what the highs are, and how efficient the system is.

And I think when you start thinking about getting the full value out of this money you're spending on prop tech or operational technology, it's really about that data mining and making sure that you're getting actionable insights. That you are actually seeing operational efficiencies and you can quantify it.

You're seeing fewer turns for example, and I think that's the next big play is data.

Brent Williams: Honestly, it seems to me that how we talk about how a property is performing is going much more towards the actual physical property. How is it performing as a physical space versus just a financial question about how a property is performing.

Huge opportunities there. I think that's fantastic.

Cris Kimbrough: And when you think about CRE, and you see some of the bigger players in the market moving towards a hospitality model, I think you can't go to any multifamily trade show and not see multiple panels about centralization and moving towards a B2C experience with tenants. All of that is enabled through technology if you're integrating it, using the data properly, and really being thoughtful about what you're deploying.

Brent Williams: I remember years ago I was at a property and asked whether they knew how many people used their pool. She said yes, and I asked how do you know that? Are you tapping into your access control logs to find out how often it's being used?

And she replies, "no, I just keep a lookout outside my window to see how many people." I wanted to respond, are you serious? I didn't say that, but in my mind I'm thinking that's ridiculous.

Cris Kimbrough: When you think about things like capital planning for a property, and how many people use a fitness center? Everybody gets all excited about having a fitness center in the building when they're looking for a property, but how many people are actually using it and are you going to upgrade all of your bikes to Pelotons this year, or are you going to spend that money elsewhere where the tenants are going to get greater satisfaction out of it, or you're going to get increased operational efficiencies to make everybody on the site happier.

Brent Williams: I think what's going to be interesting, as we get more and more data on how these amenities are being used, there's going to be a tug of war between the idea of what do residents care about and what do prospects care about, and maybe the residents ultimately never use it.

But the prospects still care about it. So what are we going to do in that weird middle ground where the people who never actually live there care about these things because they want to see them there. But residents, do they ever use it? Who knows?

I remember my buddy one time when I went to go visit him, and I asked him tell me about the community.  He was naming of all these great things about it and I said, okay, so what do you do? What do you use of those? He said none of them. But he loved that they existed. He loved that they were there, meant something to him. And so that's a really fascinating decision making process on how you value something that may not actually get used.

Cris, thank you so much for talking with me today. This has been a huge pleasure. One of my earlier jobs right before I got into multifamily was actually pulling wire for smart homes. I was in Houston, like a hundred degrees, and I'm in the attic pulling wire across attics.

It was rough, but I've always had a huge passion for this. And I know this is a much bigger scale now, but I'm always rooting for smart tech and smart enabled devices. So thank you for sharing the story. I appreciate it. And by the way, everybody, SKBM Smart Tech is actually presenting at our next multifamily demo day.

So make sure you check them out, Cris. Thank you so much.

Cris Kimbrough: I appreciate it.