From multifamily housing to student housing, commercial office space, and manufactured housing communities, all large multi-site real estate investment portfolios have one issue in common: the need to deal with all the trash their many residents and tenants produce. In most cases, this means working with many different trash haulers. The average 100-property portfolio contracts with 20 to 25 different waste haulers to provide waste management services across all its different locations.  

Historically, the biggest downside of this strategy has been inefficiency. It takes considerable time and effort every month to review, process, and pay that many different waste service bills from that many different providers, all with different due dates and payment terms. Dealing with inevitable service issues is wrought with challenges, too. It’s time-consuming and frustrating to figure out which waste hauler to call and how to work with each hauler’s unique service and issue resolution process. 

Today, there are even more pressing reasons for real estate portfolios to reconsider how they are managing waste. For one thing, rising costs across the board are causing companies to look more carefully at what they are paying for all services, and waste management is a major line item for real estate portfolios. For another, companies are under increased pressure to become more sustainable. Both trends make it increasingly important for real estate portfolios to better understand their comprehensive waste management picture and the associated costs and savings opportunities for these services. 

Consolidating providers can help.

Real estate portfolios have a few options to reduce the number of waste vendors who serve them and thus simplify their waste management approach. Contracting with a national provider is one solution. However, the national providers typically end up subcontracting with local waste companies to provide services to all prosperities in the portfolio. Using a waste management broker is another option. 

In both approaches, real estate companies benefit from simplifying their workload and reducing the number of contacts they need to maintain. But rarely will these approaches lead to best-in-class rates. Further, they deliver little if any visibility or transparency into waste contract terms and charges—information real estate companies need to fully understand and compare their true costs.

Managed services address the full spectrum of waste-related pain points. 

Large real estate portfolios looking to fully optimize their waste management service as a means of creating business efficiencies, cutting costs, or meeting sustainability reporting requirements need to look beyond national contracts and brokers and should consider managed services for waste. In this model, a waste consultant steps in not only to consolidate and simplify the management of waste vendors across all properties in the portfolio, but also to ensure best-in-class rates, the best vendors and services for each property, and full transparency for business and reporting purposes. 

Key advantages of the managed service model include:

1. One point of contact for all things waste. Instead of maintaining relationships and working directly with dozens of individual haulers and their processes, real estate portfolio management teams simply need to work with one waste consultant. The consultant, in turn, manages all the vendors, all the invoices, and all the customer service issues that come up. For the real estate portfolio team, this dramatically simplifies and streamlines the workflow, saving countless hours spent finding contacts, waiting on hold, or placing follow up phone calls to resolve service issues.
2. Timely processing and payment of all invoices. Internal teams free up additional hours by taking invoice processing off their plates. This time can be dedicated to more value-added tasks. Companies also avoid missed payment penalties and late fees that can quickly add up to significant unnecessary costs for the portfolio.
3. Improved transparency and visibility of waste management data.  Every hauler provides invoice and service data in its own unique format with its own descriptions, making it extremely difficult for real estate companies to draw comparisons between different providers or to create a holistic view of waste management across the portfolio. The right managed services platform will solve for this problem by aggregating all data from all properties and haulers and generating reports in a common, standardized format. This improved transparency empowers companies to spot trends and anomalies in waste costs and service levels, keep track of details like vendor contract termination dates, and ultimately make more informed waste management decisions. Real estate companies can in turn generate more complete sustainability reports to confidently comply with applicable regulations and provide deeper insights about their waste profiles to their various stakeholders.
4. Contract and rate optimization. Most real estate companies do not have the internal bandwidth, not to mention the waste industry expertise, to devote to optimizing waste management services and costs. Across various vendors, companies are surely paying too much for services, especially in an industry notorious for price creep over time. And it’s not uncommon for variable one-time fees such as overage and contamination fees to more than double the regular monthly costs. A good waste management consultant will leverage benchmarking data and industry knowledge to identify every opportunity to lower costs and renegotiate contracts including rightsizing services for each property in the portfolio. Consultants can help with writing new contracts with the most favorable costs, terms, and conditions including language to prevent unchecked rate escalation in the future.
5. Contract compliance and exception identification and resolution. Once contracts are optimized, keeping vendors in compliance becomes its own full-time job. Again, the right waste consultant can take on the role of auditing monthly invoices. These audits and reviews are key to managing costs on an ongoing basis, identifying the all-too-common mistakes and overbillings, and keeping up with the legwork involved with requesting and verifying credits due.
6. Increased asset value. Rate & service optimization, preferable vendor contract terms, ongoing oversight of vendor invoices, and mitigation of extra fees and charges all contribute to a desired result – driving NOI and increasing portfolio value.   While right-sized waste management services from qualified and well-managed vendors keep properties looking their best.  

There’s never been a better time to consider managed services for waste. 

As waste management practices fall under greater scrutiny and companies must take better control of their costs, the case for managed services for waste becomes stronger. Managed services provide companies with the resources and expertise they need to fully understand their waste profile and to make the best waste decisions for their companies and stakeholders. And the savings generated often ensure these services pay for themselves. 

 

If you’re ready to consider a better approach for your portfolio’s waste management needs, contact SIB to learn more about managed services for waste and other key spend categories including utilities, telecommunications, and more.