Property ManagementY2K: It"s Time for Real Estate Companies to Get Serious
Most companies and businesses today are well along in correcting their Year
2000 or Y2K problems, which could result from computer software mistakenly recognizing the
digits "00" as the year 1900, not the year 2000.
Real estate is the exception to this general preparedness. Because it is not
considered to be highly dependent on sophisticated technology, it has not attracted much
attention as a source of Y2K problems. But the problems could be just as serious for companies that own,
lease or manage real estate as for any other company.
In office buildings and other real estate facilities, the problem is largely
found in embedded systems, or equipment controlled by a microchip. The relative risk to a company
or other property owner is determined largely by the facility’s design, when it was designed,
and its function. Industrial warehouses have few embedded chips. By contrast, office buildings, with many
such chips, could be significantly affected by the millennium bug.
Impact
The impact is most likely to be evident in:
Heating, ventilation, and air conditioning systems, which could shut down
unless the embedded chips are upgraded or replaced.
Utilities, including the supply of electricity, gas, water, water purification, power generators, and
power distribution units. The loss of utility services in any building or property will cause the facility
to shut down.
Security systems, including building and access control, emergency alarms,
data logging, communications with extinguisher systems, gate control, and surveillance and
card readers that have not been upgraded or replaced with Year 2000 software. For example, you
might not be able to drive into the parking facility where you work because of embedded-chip
problems in access control systems.
Communications equipment, including telecommunications, data transmission,
PDX, voice mail, video conferencing, PCs, fax machines, and local area networks. Embedded chips
could cause telecommunications systems to malfunction.
Other Y2K problems could surface. Leasing software could send erroneous
bills to tenants.Imagine finding that you’re 100 years behind in your lease payments.
Action Plan
If you haven’t already begun to deal with the Y2K problem, start now. The
following are steps that your company can take:
Prioritize your problems. Deal with only those that are critical to your business and assign risk
levels to the systems that need to be remediated or replaced.
Inventory all embedded systems. This is a challenging and time-consuming process because most real estate owners and operators have little idea how many chips are in their facilities, or where, but it is
essential to safety, security, and property protection.
Develop contingency plans. If a system should fail, determine whether the business and its facilities
can operate effectively without it.
Delegate. Assign a senior executive to manage your organization’s Y2K preparedness.
Check your vendors. Set Y2K standards for all of your company’s vendors.
Go to manual. Determine whether systems such as HVAC and lighting have the capability to
operate on a manual mode. Personnel must be trained and, if necessary, be prepared to switch to
manual on December 31.
Identify solutions. The solution may range from the replacement of the embedded micro-processor
to the replacement of the entire system.
Test all mission-critical solutions prior to Dec. 31. Testing can be as simple as just setting a clock forward on the heating and ventilation and determining whether it works or doesn’t work. Or it can be as complex as having to create new testing repair procedures as many of these systems may not have been looked at by manufacturers for Y2K compliance.
Above all, good communication is necessary to address supply chain issues
and prepare your business for the Year 2000. Y2K problems and the potential impact on your
business must be understood at the highest levels of management. And remember, not only do you
have to fix your Y2K problems, you are also vulnerable to problems of other companies. Your
company will be affected one way or another. Be prepared and ready!
Also See:
BOMA Offers Tips For Y2K Preparation
Y2K "Bug" Won"t Eat Your House
How REALTORS Can Outsmart the Y2K Bug