The $1/PSF Question

Every owner I talk to wants to know the same thing: where does the next dollar come from?

The received wisdom is “raise rents.” But rent compression is real, leases are long, and for most modern buildings you can’t move that lever fast. So the question worth asking isn’t how to extract more from the rent roll. It’s what the building itself can produce that isn’t on the rent roll at all.

Our answer, across two real deployments on mixed-use assets, is about one dollar per square foot, per year — in NOI we can attribute to how the building is run, not to the leasing team.

Where the dollar comes from

Here’s how $1/PSF breaks down on a 275,000 sf building. Real numbers from a real operating plan, rounded for this post:

• Utilization — ~$150K (≈$0.55/PSF). This is the biggest bucket, and most of it is parking. A building with the right data behind it can confidently run 35% more parkers than its spaces — a number we defend in a separate post — and that oversell, priced at market, is real money every single month. Amenity monetization and short-term space use sit in this bucket too, but parking does the heavy lifting.
• Services — ~$25K (≈$0.09/PSF). Tenant internet revenue share, bundled infrastructure. The stack you were going to install anyway, only now it pays.
• Optimization — ~$50K (≈$0.18/PSF). Energy, maintenance, vendor spend, labor. Smaller than people expect on a single asset, but it compounds across a portfolio and it’s the least visible dollar on the P&L.
• Analytics — ~$50K (≈$0.18/PSF). Decisions you don’t make because the data caught them first. Bad contracts not signed. Outages not experienced. Leases not renewed at the wrong number.

Total: roughly $275,000 of annualized NOI on a 275,000 sf asset. Call it a dollar.

That’s not a ceiling. In buildings where we have deeper data — Centrum, St. Paul Place — we’re seeing more. But $1/PSF is the honest number for year one.

Why the silo tax is so expensive

The reason this money is sitting on the table has a name, and the name is silos.

Start with the fact that there’s no such thing as “the” property management system. What most owners call a PMS is an amalgamation — one tool for the rent roll, another for accounting, another for leasing, another for work orders, another for tenant comms. None of them were designed to talk to each other. The building management system doesn’t know which tenants are actually onsite. Access control doesn’t talk to billing. Parking runs on its own island. Energy sub-meters log to a dashboard nobody opens. Every one of those gaps is a leak — sometimes a dollar, sometimes ten thousand.

The industry’s response has been to buy another dashboard. But a dashboard on top of disconnected systems is just a prettier view of the same problem. What’s needed is further down the stack.

The order that matters

The move is three words, in order: integrate, unify, measure.

• Integrate the systems the building already has — BMS, access, parking, payments, comms — into one operational plane.
• Unify the data model so the parking garage, the tenant directory, and the utility meter are all talking about the same thing.
• Measure what’s left, because now the measurements mean something.

Most teams skip straight to “measure” and wonder why the dashboards don’t lead to action. Dashboards don’t close the loop. Integrated operations do.

If that sounds like a property management platform, that’s because it is — minus the accounting. Your accounting stack stays where it is. Everything else — leasing ops, work orders, tenant comms, parking, access, amenity, payments, energy, analytics — runs on one plane. That’s what Honeycomb is. And that’s what makes the $1/PSF number possible.

What this means for 2026

Interest rates aren’t coming back to 2021 levels. Rent growth is uneven at best. Insurance is up. Property taxes are up. The easy levers are gone.

What’s left is operational alpha — and that’s a much slower game to play by hand. An owner who gets to $1/PSF of operating NOI on a 275K sf asset is producing $275K a year that didn’t exist last year, on the building they already own. At a 6.5% cap that’s worth about $4.2M in asset value, created without touching the rent roll.

That’s the question worth asking on every building in the portfolio.

Not “how do we raise rents?” — but “what is this building leaving on the table?”

The answer, in our experience, is about a dollar.