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2026.10.07 | TB | Industrials | North American Facility Services Update

原标题：PE Sector Update: North American Facility Services – Scalable IFM Platforms, Impact of AI & Ageing Infrastructure

#industrials

Third Bridge · 2026-10-07

Analyst-led • 29 Sep 2026

Ankur Chopra (AC) Director, Facilities Management at St Francis Xavier University

Devna Dave (DD) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

DD [00:00:03]: Welcome to Third Bridge's Interview entitled PE Sector Update: North American Facility Services – Scalable IFM Platforms, Impact of AI & Ageing Infrastructure. I'm Devna Dave, and I'll be facilitating today's Interview with the former General Manager at BGIS Global Integrated Solutions in Canada.

Before we begin with today's Interview, could you please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during the Interview today.

AC [00:00:39]: I agree.

DD [00:00:40]: Could you please provide a brief introduction to your background in this industry?

AC [00:00:46]: Yes. I have over 18-plus years of experience in facilities management, but that also is supplemented by… I'm a professional engineer and registered in the province of Nova Scotia, but also previously in Ontario and have extensive experience in operations and maintenance, but also project management as well.

Questions

00:01:11] How would you characterise the North American facility services market in Q3 2026 in terms of growth, demand drivers and overall competitive intensity?

AC [00:01:27]: I would say, overall, there is still quite a bit of demand for an integrated facilities management solutions out there. A lot of it is being driven by the fact that the clients and the customer base out there, especially not just the new ones, including the old facilities, they have extensive amount of deferred capital investment. That's point one. The second one is being driven by whether it's AI or technology evolution, whether it's based on sensors, sensor-based technology. If you're not actually out there in that market and providing those day-to-day services and innovation and you're managing your own assets, then you are potentially being left behind. I think the industry and the clientele out there sees that. I would say, overall, there is a steady growth in the sector as new clients are brought on board by various facilities management service providers.

Though one of the things that these IFM service providers have to keep front and centre as they provide these services to these clientele is the cost itself. A lot of the owners who are going out to the market to get facilities management are being driven out there because of the cost of maintaining their infrastructure, whether it's deferred capital investment or the cost to maintain day-to-day maintenance of your equipment. They are trying to look for solutions, innovations and ideas, so when these integrated service providers are providing those solutions, they have to keep that as front and centre to see that they're not overall driving the cost off (ph 03.25) for these owners furthermore because then that it would dissuade them from the market. That's at a high level. Like I said, positive growth still out there. The next iteration or target market for IFM providers out there is ensuring that they're continuing to innovate and that they are continuously trying to find solutions that the owners out there are looking for rather than waiting for the owner to come to you.

00:03:58] You talked about the costs in the North American facility services industry. What are the underlying reasons for the high cost pressures? How much would the CAPEX be as a part of revenue for a typical company in this industry?

AC [00:04:13]: When you look at from a cost perspective, so there are typically two buckets, obviously, there's more than two, but I'm just going to, for the sake of our conversation, divide them into a capital asset renewal bucket and your maintenance and repair bucket of money. Maintenance, your majority of the owners out there are trying to make sure that they're doing the minimum, which is whether it's code or authority having jurisdiction-driven. That's one. The other offset that the owners themselves are looking at is that, "Okay, I have a capital renewal coming up, a life cycle renewal on a piece of equipment. While I don't have the funds today, what if I push this renewal out by another couple of years." Without realising the fact that when you're pushing out these renewals by a couple of years, not only you might be impacting your repair bucket and maintenance bucket, but it adds up as you start deferring the overall capital. That essentially is where, I would say, from a capital point of view is where the monies are owners keep their money and hold on to it, hoping that because they don't have to make a decision. It's just renewal. It looks like it's working right now, but without realising that not properly replacing it at appropriate timeframe that they might be pushing the problems down the road.

00:05:59] Where do you still see meaningful consolidation opportunities in 2026? What is preventing those opportunities from being consolidated faster?

AC [00:06:35]: I think one of the owners when they are looking at like whether it's existing clientele or a new clientele, one of the things that the owners are looking for is consolidating. They don't want 20 contracts out there when, let's say, they have a division for facilities management, and they're looking for one service provider that can hopefully meet all their needs. They don't want a custodial separate contract, separate contract for landscaping, mechanical, electrical. The growth opportunity here for service providers is how they can pool their resources together and be able to provide that integrated solution to the clientele. That's one. The other aspect is like what the owners, let's say, owners have their own teams of electricians and HVAC techs and various other trades. The issue that owners frequently come across is that they… As part of normal life cycle, people leave their jobs. It's really hard for owners to find in the current market a trade replacement. It's a highly competitive market.

The growth here, again, for companies out there is that they can put solutions forward to the different clientele is that, "Hey, you don't have to worry about like an HVAC tech or an electrician or a refrigerant tech." I have a pool that provides services across a specific region and that you don't have to worry about if someone were to let go because I do have a pool that someone will be able to jump in or will be able to fly them in, essentially. That's a growth opportunity that different clienteles are looking for, and I see that constantly across Canada and when the RFPs are put out is more an integrated solution. The challenge here is more around, especially like whether it's US or Canada, is a lot of those… As these service providers are concentrating on providing those integrated all-encapsulating or just one service provider who manages everything, all these are restricted to big metropolitan areas.

Let's say, like Toronto, Vancouver and such, where they start running into issues are like smaller cities like Halifax. Maybe Halifax is not as small, but compared to Toronto is. Then your client may not just be in Halifax. They could be in rural Nova Scotia locations. To be able to provide that promised service of an integrated solution may not work efficiently there. That's one of the not every service provider has been able to grasp or jump on to this opportunity is because they have to build those bridges and build those relationships whether it's with local contractors or regional contractors, bring them on board as a joint venture or bring them on to their team to be able to service some of those other clienteles out there.

00:09:51] What are the most important structural trends affecting the facility services demand across commercial, industrial, data centre, mission-critical or other facilities?

AC [00:10:24]: It's the knowledge gaps. Honestly, everything comes down to is that there's not many, very many service providers out there. When you talk about data centre, it's a concentrated skilled service that not any and every service provider can provide. That's one. Then second thing is, if you are providing out that service like data service, data centres facilities management, it's not just about keeping the lights on or keeping the HVAC optimal. It's also about the engineering and the smart functionality that has to go in supporting these critical facilities because even a minor change in environment over a few hours can cause drastic harm to the clients from their operation and risks. I would say it's the knowledge gap and the scale. Then you're concentrated towards very few service providers out there who are currently meeting those needs.

00:11:32] Typically, how do facility service providers successfully deliver high-level engineering and smart functionality? Recruiting the right people is one aspect, but how do they ensure the quality across services?

AC [00:11:45]: I think it's not about jumping in, "Hey, you know what, we should have a trade like a professional engineering division within our department." It's not even just that. You have to build it from the ground up, like you have to build a team that understands facilities management, not just bring, "Hey, someone has 20 years of electrical engineering experience, they'll be great in not coming up with solutions to maintain a data centre." I know I'm slightly exaggerating in a bit to showcase that it's not something you can just build on day one. It's something you have to invest in. Learn like if you… You have to bring on the right resources and then build from ground up as to what that entails and what the clients are looking for. One of the things would be is… Quite a few service providers do provide this, the ones who maintain data centres is they have remote monitoring systems out there. They have achieved and before even they got to, but they had been practising innovation as part of their day-to-day facilities management services. Eventually, that innovation became part and parcel of their offering to the clientele is that, "Hey, when you are coming on board, not only do we have these great experts who will provide you with the service, but we also have this great innovation, whether it's sensor-based, technology-based that we offer that would supplement our services."

00:13:20] How are owners currently balancing the cost pressures with service quality, labour availability and uptime requirements when selecting facility service providers?

AC [00:13:38]: That's a great question because that's one of the things that owners do benefit when they do go out to a third-party for integrated facilities management because when they do build those scopes of work, they can actually build in key performance indicators. Failures of any of these KPIs, the key performance indicators, can help offset some of their risks. Just like any other organisation, like that has to ensure that they have a proper risk management plan and like any asset owner would create a risk plan and knowing that, "Okay, if their services were impacted, what would that entail?" They can transfer that risk over to these third-party service providers. Typically, that's what ends up happening out in the market. That's one way the owners offset it from a cost perspective. The second thing is when you're going out to a third-party, who is providing services across the different clienteles, these service providers are actually learning different, I guess, industry secrets in a way of how to better maintain your assets. By going to a third-party, you're also gaining knowledge that these third-party service providers would share with you.

I think I hinted at that earlier is that from an innovation point of view, from a technology point of view, when these service providers are innovating and piloting technology towards one sector and when it's successful, they share those on a good basis with their other clients as well, "Hey, we were able to achieve this, like whether it's utility savings or optimise maintenance." Otherwise, if you are an owner who just has multiple assets that you regular maintain, you're just dependent on your own team coming up with those solutions and that can be hard because it's hard that you only have a team that meets your immediate needs. You are unable to pool those expertise and resources that these third parties might be able to provide. From an owner perspective, that's another way to offset cost is going to the third parties. The biggest place where the owners get caught up is, as we discussed slightly earlier, is that it's a deferred investment, leaving decisions way too late and then those catch up eventually at some point. What their owners are trying to do, especially with some of the older infrastructure is now they're allocating more to their repair budget because they need to keep their operations running while something that should have been replaced five years ago is still pending now capital asset allocation potentially.

00:16:34] How long does the process of selecting a facility service provider typically take?

AC [00:16:42]: It could take up to a year. I think the key here for any owners out there is that they put in a proper scope of work, a proper directive as to what they're seeking and what their risks are. Because otherwise, if you just go out with a blank statement that, "Hey, I'm looking for someone to maintain my assets," that won't be a good solution either. You have to properly think through in terms of what you're asking for and what your appetites are and risks are and then build those KPIs. I think I would say it takes a few months to pull together something like a proper scope deliverable and then going to the market to find the right like bids and then properly scoring them and setting those contracts. I would not get into like a year or two-year contracts. When you're looking at integrated facilities management, you want to look at something long term, five years at the minimum.

00:17:42] Would you call the North American facility services market relatively sticky in terms of actual customer retention?

AC [00:17:53]: I would say so. It is customers when they get used to seeing the same pool of people and the service provider unless you are really failing those KPIs, key performance indicators, I would say most of the companies, at least the larger one, tend to retain because they have built those trust, but also along the way, the service providers also get to know their clientele. Hoping that they know where the pain points are for the clients and the owners that to retain these, the service providers try to keep their, let's say, finger on the nerve and stay ahead to be able to make sure that they get their renewals or recognition for the work that they've done in the previous part of the contract.

DD [00:18:44]: What would you consider as healthy retention?

AC [00:18:51]: I would say for any company out there, like a service provider out there and the boards like knowing there is healthy competition out in the market that I think the demands of the boards and the executive teams out there is that they want to retain like retention to 100% level. If you have a client where especially they have the right to exercise (inaudible 19.21), as an example, in some contracts that you get those. If you don't, then that is a message to the service providers out there that there is something they're missing the mark somewhere and that even though they might get a new client here and there, that there is, let's say, a leak in the boat somewhere. I would say if you have a client and you have an opportunity to bring them back, the expectation is you retain them.

00:19:48] How does the current market differ between the US and Canada, particularly in terms of customer requirements, labour procurement or outsourcing processes?

AC [00:20:46]: Part of my answer that I hinted earlier, right, is the geography that comes into play. I'll talk from a Canada perspective, is that it's easy to build those relationships, whether it's procurement, like as an integrated service provider where you're providing that one solution to the client. It's easy to provide those different M&E custodial services when you're in big cities because it's easier to find replacement for resources that may have left your institution. Things that to survive, there is quite a bit of business out there that's not just in metropolitan areas or big city areas. There's quite a bit of business, especially in Canada and outside of big cities, too. That's where the challenges that companies face is that ensuring that they can continue to meet the demands of these assets that might be one or two hours away from a big city. Then thing is that if you don't have local resources there, then you have to start budgeting like travel cost. In some cases, like if we talk about really rural, rural areas, then sure the client also understands that, "Okay, they may have to pay a premium to get a technician or a service provider from like the next local area." That's one.

The same thing goes with procurement, too. When you're trying to procure services, whether it's custodial or M&E in a rural area, you have, it might take a lot longer. You almost have to put like a rural premium on your expectations for the clienteles as well that, by the way, in the city, the cost for this might be X, but when we go to a rural area, you may have to add tack on a 20% premium on that service. You may only end up getting one bid. Then it comes down to from a procurement perspective is managing those expectations with the clientele. From a labour perspective, that's the key for a big service provider out there is that when they're building their trade shops, when they're building their junior, intermediate, and senior technicians that they maintain a healthy pool of those junior and senior technicians because as it's part of any competition out there, like if construction industry is going through a big jump that maybe some of your trades might go try their hand at a big construction job, then you're relying on your… It's a loss of knowledge, but it's hard to replace the senior personnel. Once you're investing in your own trade shops with your junior intermediate, then it becomes easier to continue to provide that service to the client and maintain your KPIs as well.

00:23:41] Would you say that the US has any particular differences or any particular differentiation?

AC [00:23:51]: I would say US is much, much bigger in scale compared to Canada in a way. That's where like it's easier to be that integrated service provider sitting out of Ottawa or Toronto here and providing the services across Canada. It's a complete different story. You can't be based out of… I'm hypothetically talking out of New York and try to provide service coast to coast and north and south across the US because there is different appetites. There are different regional expectations that you have to keep in mind. Some of the big companies are trying to do that. They are, but there are still way too many like small-to-medium-sized players out there in the US because in the US, again, it's the same concept in Canada to a smaller scale that you have to be able to build those relationships with those contractors and service providers to be able to provide that service locally.

00:24:50] We talked about the dependence on pricing and the costing pressures. Are the US customers relatively more price-sensitive than the Canadian or even the global market? Does the US suffer higher pressures in terms of actual pricing and costing?

AC [00:25:28]: I don't believe so. I think everyone is looking out more for a competitor. There might be more competition out there in the US. I think instead of saying that, "Hey, they're looking for more… If there's more pressures, the pressures are more driven by competition. That's where from a Canada perspective, there are companies out there, but there's only two or three big companies that have the big clienteles here in Canada. The competition is not at the same level as like maybe in the US. Then that's probably driving the market pressure and price pressures.

00:26:05] Within IFM [integrated facilities management], how do customers think about the relative value of hard vs soft services? Which categories are most commonly bundled?

AC [00:26:22]: Hard, obviously, like talking about them is your HVAC, electrical, plumbing, and then like anything more technical asset base in your building. Then soft services are more around custodial, landscaping, snow, pest, almost like add-ons in a way. One of the key integrated services that do get combined together or the service providers are looking is on the hard services side, like providing your HVAC, electrical, plumbing through your trade shops or having those regional relationships with the appropriate contractors to provide that one service model to your clienteles. Where soft services, some big companies are providing bundling soft services too, but it gets harder because like you're talking about custodial, ground, snow, some of the minimum wage jobs positions out there. That's where the retention and being able to maintain that bandwidth can be harder. There are service providers out there. It's more around setting up those regional relationships rather than providing an in-house service. Though some of the big companies out there have started providing integrated soft and hard services as one solution to the clientele.

00:27:41] What are the key differences between the providers offering fully integrated solutions and companies that are primarily focused on one particular trade or service category?

AC [00:28:02]: Someone who can provide all services is of benefit to the client, like because going back to the earlier discussion point is that this way, you're talking about one PO that has to go out. Even for a service provider, you look at it more from a perspective of your growth, then that way you can actually also attract more customer base too, I think. That's your launch pad to grow bigger and being able to attract some of those big contracts out there. Then if you are more from a perspective, okay, I only provide M&E trade services, then you're looking at more regional solutions to like smaller players out there that are not… They don't have too many widespread assets. They're more assets that are specific to a location. That's where some of those small service providers come into play. Also, these small service providers tend to also complement some of those owners team like in a way, like if the client has their own team of trades, then these small service providers also complement those trade owners trades team.

DD [00:29:11]: In value terms, do you think customers actually prefer the fully integrated solutions then?

AC [00:29:28]: I would say, yes, the customer would prefer it, but it's more owners of like do they have an appetite to be able to engage that one single provider at a cost, like because if you keep the cost as an owner, if you have to think about, "Okay, I'm bundling everything into one, that means I have to pay up that bill." Then it takes away from the owner to decide, you know what, like I don't need to add this, but I separate this out because I'm providing that in-house. You could still probably do it like hybrid contracts out there. I think the owners who can have a slightly bigger appetite and can handle and manage risk, they are looking for that integrated facilities, one shop to meet their needs.

00:30:22] How do customers evaluate the trade-off across in-house execution, outsourced services and hybrid delivery models?

AC [00:30:42]: That's where our initial discussion on the scope comes into play is that for them, they have to clearly lay out the expectations and the risk of what they're expecting from the service provider. When they are evaluating, like if the key is that the data centre or their critical heating plant cannot go down because it will end up impacting the overall operations and revenue loss. When they're looking for a service provider, they're looking at, "Okay, who is providing that service already in the industry because their risk appetite might be like lower to absorb any going into that engagement to absorb some of those shocks." From an evaluation perspective, owners would tend to put a high criteria on someone with experience rather than someone who's just trying to build especially on the hard services side. Soft services is where you have room to grow and that's where you can score points. For the owners, soft services is there, but it doesn't hold the same amount of rating as for the hard services.

00:31:59] Which services are most economically attractive for customers to keep in-house and which are increasingly being outsourced to third-party providers?

AC [00:32:18]: Internally, what the owners could look at is services such as your capital planning potentially. If owners were looking out there that, "Hey, I only want to get specific trades and skillsets out there and I want to cut costs and retain some functions." You tend to see that owners… Even right now, when the owners who are in engagement with these third-party service providers for integrated services, facility services, they tend to keep a small group of team still on within their departments for some of the specific tasking, whether it's the oversight, but like capital planning is one, compliance oversight function rather than giving that out to the third-party. The other one would be is like contract management and our institutional design guidelines. They would retain those functions in-house and maintain them where they would go out as like specialised HVAC, electrical, elevators, fire life safety, like specific targeted functions.

00:33:31] How are facility owners managing ageing infrastructure built roughly 5-10 years ago that now requires increasing maintenance or capital deployment or investment?

AC [00:33:50]: I think that's where either owners have not understood or understood clearly or they… I believe across the sector, deferred capital investment is a problem because they have kept deferring it because it's… Oh, if it's not broken, I don't need to fix it. I can wait until tomorrow mentality, unfortunately. I see that across different, like whether it's all sort of clienteles out there. They're focusing on the big ticket items or, hey, I need a brand-new shiny building or I need something. Then forgetting about that, those small, small, like replacing pipes, hey, why do I need to replace pipes? What's happening is that that deferred investment does add up and what they think is that, "Hey, USD 10 today is not USD 10 tomorrow." Obviously, you have inflations and various different factors that come into play, but a USD 10 today replacement that could have been done with a couple of day shutdown tomorrow would be an emergency that may put your operations at risk and revenue at risk for a whole month.

For clienteles, I think it's the education piece. That's where these third-party service providers can come in handy is providing that education piece out there is that, "Hey, deferred investment, like, hey, if you don't have capital here, by the way, educate them is that we could probably still maintain this by doing extra greasing or putting extra sensors out there so that we can evaluate from an optimised maintenance perspective, extend the life on an equipment by another 2-3 years." After that, by the way, if the equipment fails, here is your risk and here is the loss of revenue. If you're making those clear, I think, hopefully, that education would go a long way for the clientele to make the right decision.

00:35:48] You mentioned that there has been a delay in equipment replacements. Where are owners budgeting the held-back capital, and what impact would that put on the bottom or top line of the P&L?

AC [00:36:10]: On the private sector side, it depends. If it's a public sector client or a private sector client in a way, where they're looking at is like the cost of doing business is increasing. The deferred capital might be going towards meeting the needs of another department or it could be meeting the needs of like if a private sector client is providing a product out to general public, their more focus might be on innovation towards that product rather than maintaining a pipe system, pipes and sewers because they see that, hey, I'm going to get more profit potentially by investing in a product that would be sold in the market rather than if I put that USD 10 towards the pipe, I'm not getting any return on it. It comes back to the previous conversation here is that from an education point of view, all you're doing is you're deferring your risk, you're putting your risk to tomorrow. It comes down to do you actually understand the risk and the cost of that risk that you're putting out. You're chasing the USD 10 in profit, but you're going to end up losing USD 20 tomorrow with that plan, risk management plan.

00:37:21] When owners have limited capital budgets, how do they prioritise maintenance, repair and replacements? Do they also look for upgrades?

AC [00:37:40]: It's one key thing for owners and the service providers to sit down and identify what are the main priorities, whether it's health, like, obviously, from being able to operate something that's public facing or it's not your personal home in a way is that you have to ensure that you're meeting all the codes and authority having jurisdiction requirements. If there is any specific tasking from authority, so you have to provide them with a higher priority prioritisation. The other thing that you need to prioritise on the same wavelength as your critical impact items. If there is, let's say, a system, let's say, a central heating plant that serves your whole asset area and that if it goes down, all your heating and cooling goes down with it and it's not an easy replacement, then that would be a higher priority. Then you work towards like non-urgent operational impacts, client requested as part of operations or last one would be, is it good to have. You have to have a proper priority chart. When you're looking at your asset, you have to take out the noise and concentrate on these specific tasking, so you know what you can get out with. The other thing you have to look at is if you've left so much for deferred capital investment on the table and tomorrow, let's say, even if you would say, "Hey, I got all the money I need you've been asking for in the deferred," you can't just go drop that big payload of money to all of a sudden deliver all those projects in one go without causing mass interruption to your operations. I think part of prioritisation is understanding what your main priorities are keeping up with them.

00:39:25] Does constrained funding create greater opportunities for outsourced facility service providers that can offer preventive maintenance and life cycle cost management?

AC [00:39:40]: I think it's the other way around. It's more around clientele not knowing what that these service providers actually can help them save money. They get more focused towards that, "Hey, I have to sign another contract and how do I ensure that they're doing the right thing for me." If I hire my own trades and technician, then I know at least what I'm getting. I think it's that building a trust out there. Again, we're talking about new clienteles. The existing clients out there, like owners out there who are already in the industry in relationships with these service providers are already aware. I think from a growth perspective is if you're targeting a new client who has not had integrated facilities management services through a third-party previously, you have to help bridge those gaps because I don't think they would know otherwise. For existing clientele, I think they already know what they are getting into. For them, it's always about savings and efficiencies and how are you integrating the latest and the greatest to help me minimise my offsets.

00:40:53] For companies that claim to self-perform services, what should an investor actually examine to determine whether self-performance is generally an operational advantage?

AC [00:41:17]: I think I mentioned this at another point earlier, too, is that if someone is telling you that, hey, I can self-perform everything. It's not a big issue if you're like your assets is not spread out, like you might just be down to Toronto as an example. I think then you can easily trust that service provider that, yes, they can. It's more around if you have assets that are spread out and you're, let's say, an hour or two hours or three hours out of Toronto or more in rural, then you have to look at from a self-performance point of view is that, hey, the service provider says that they can do everything themselves. That's where the owners would have to look at having proper KPIs in place to ensure that they can actually do this work.

That's where your evaluation criteria during bids is that, "Hey, what demonstrate to me that you have regional presence, demonstrate to me that my elevator goes down here four hours away from Toronto in a building that if someone is stuck in the elevator that someone will be out there who can take them out not in four hours." I think part of it is that you do need to spend that time to ascertain and evaluate those bids from these third parties. Then at the same time, making sure your scope is clear on your risk and your risk appetite and clearly stating to the service provider that you have to be able to do the service. If not, there is a KPI and there are financial KPIs that you're going to end up taking on.

00:42:55] What operational KPIs should investors use to benchmark the facility service providers? Is it response time, contract retention or anything else?

AC [00:43:12]: I would say, response time, so obviously, response time is one of the higher priority ones from client indicating your risk. That's one. The second one is your asset maintenance. How many times have you missed a code or legislative required maintenance, like being able to demonstrate that that you have the right tools and protocols in place that that will never happen. Then even if it's not code or legislative required, how many times have you missed a life cycle-based maintenance as well? Because that would be another indicator is how much resources are the service provider putting towards legislative vs good to have or a good life cycle one. That's another indicator for check. The other one is how many… You can go on, you could build a whole checklist of from a KPI perspective. I think the key ones is the other one is from a health and safety point of view. How the health and safety culture of your company, how many issues have you had? I know I'm talking health and safety, but the same would apply with labour safety is how many work orders have you received from authority having jurisdiction as well. That's another KPI to evaluate and manage.

00:44:37] What is the typical industry benchmark for all the KPIs that you listed? What would be an industry average?

AC [00:45:01]: I didn't quite understand the question. When you say industry average, like downtime for elevator, what the expectation for an elevator entrapment would be as an example?

DD [00:45:13]: Not expectation as such, but what is considered as an okay timeline in terms of the downtime or what would you consider on an average, a good response time?

AC [00:45:27]: Again, different sectors, different priorities. Everyone has to, first of all, pull together a proper risk management plan and understand what your risks are. I'm talking to the owners here. For example, if you're in a television industry, what downtime can you accept if you're off the air? Maybe 10 seconds because you're off the air, that's a major interruption to your operation, the key vs if you're just an office that's providing second-hand, when I say second-hand services, like it's not direct services to your clientele, then typically, what you would see is a 60-minute downtime at least on an urgent basis or emergency basis and that they would expect that, okay, emergencies, like if some emergency happen, flooding happened and whatnot, then the owners tend to work with like whether it's force majeure or like it's out of your hands, so "Client can't hold you responsible for those things." If it was something that you were not maintaining, let's say, an elevator, like you have not been doing proper maintenance. If it's specific to maintenance items, they would expect a 60-minute service timelines as an example. It would go same thing with the power and lighting as well.

00:47:00] How would you characterise the positioning of BGIS Group within the North American facility services market?

AC [00:47:17]: I'm sure you've heard recently like BGIS was bought out. Obviously, I don't speak for BGIS. I want to make that clear. I'm no longer the employee. I'm just going more from what's public information out there. They've been recently bought out. At the end of the day, it is one of the fastest-growing companies out here, especially here in Canada and I think in the US and globally as well. I think one of the key indicators that they have done is built those skill shops and trades and the engineering expertise in-house, while at the same time when they started off providing those operation and maintenance services, either through in-house or through third-party, managing third-party contracts with service providers. I think as they have grown along the way, they have brought on board like different service providers so they can self-perform and provide the service in-house. I think that's the key distinction out there and especially in Canada, where they have won some of the major projects out there is because of that key distinction having to build that expertise and knowledge base along the way.

00:48:24] Are there any emerging players in the North American market that have caught your attention?

AC [00:48:33]: In a way, no one's really like some of the big players are still out there, apart from CBRE, JLLs and whatnot, at some point, they have had big contracts. They have lost big contracts. In my opinion, I have not seen another player at the same level. I'm sure there are regional and smaller companies that are growing and innovating along the way, especially companies that are targeting dedicated like services related to climate resiliency and GHG reduction as part of your operation and maintenance programme. Some of the big players in the market are still holding true out there. I can't name another company at the moment that might be up and new coming. I think apart from like BGIS would be as one of those smaller ones in the last decade has become really big now.

00:49:36] Larger companies sometimes acquire regional mechanical, electrical or other trade businesses and use a centralised delivery model to serve broader territories. How effective is that strategy?

AC [00:49:55]: I think if you can bring everything in-house, then not only you're helping retaining those clients, but then you're also helping broaden your own like learning for your teams and giving those opportunities to your team members as well as part of longer retention. For some of the big companies, they are slowly venturing where they're either buying out other regional smaller firms to grow. I think you have to continue to innovate because if you don't, someone else will end up doing it. Some of these big companies are continuing to innovate and providing those regional services now, whether through joint ventures or buying out firms out there to be able to provide services.

00:50:45] How does centralising delivery in regions such as Atlantic Canada out of Halifax affect the labour utilisation, response times, overheads and customer pricing?

AC [00:51:08]: That's key, right, where customers, especially if they are rural or that they would build in some appetite that, hey, I'm going out to the market that I would expect a little bit more premium, especially travel time. For companies out there, they have to build that agile trade shop. If, let's say, they are providing a base out of Halifax and assuming that their trade shop out of Halifax will service all of Atlantic Canada, that's a fallacy. They will not be able to achieve and meet their KPIs. They have to look at creating more regional hubs where it could be on-demand services as another example, but obviously, it's chicken and egg is that you're creating a service out near a remote area of Nova Scotia, but you need to have a client first.

Then this is where do you really need that hard set office in Downtown Halifax. Maybe you need to look at being more remotely located so that your service technicians can reach different clients base. Yes, that model is where… I think that's where in Canada is it gets harder, not everyone can do it. This is also some of the big players can come in and say that, "Hey, you know what, I'm short of a technician in Nova Scotia, but I have a couple of extras in New Brunswick." Maybe while we recruit, maybe we have like as long as you're doing predictive maintenance and nothing is urgent and emergency, you know what your schedule is for the next few months that maybe you'll be able to fly your New Brunswick technician to Nova Scotia for a few days and weeks at a time to be able to support while you recruit.

00:52:56] At what point does expanding geographical coverage begin to create diseconomies of scale rather than operating leverage?

AC [00:53:08]: This is where you have to closely monitor your margins. If you're trying to hire someone up north in the territories, like having a dedicated team member who might be servicing only one or two clients, you might end up paying a lot more there for that one FTE vs having a pool of FTEs in Downtown Toronto as an example. Even though the salaries… Yes, so you would end up paying more. Then you have to budget in and say, "Hey, is it sustainable to have two electricians up north servicing these only two clients, and I don't have any further client growth in this area." That's where you'll have to monitor your margin and then also try to compete with local players is that because your cost to retain two FTEs, like when it comes to benefits and disbursements and whatnot, that could be higher. When you're trying to compete with someone locally, who already is well-established and knows the client, then your margins might be slightly lower in your offerings.

00:54:15] Which companies, service categories or technologies should PE investors monitor closely through 2026 and 2027 to understand where the North American market is heading?

AC [00:54:30]: There's actually quite a few that I would name from top of my mind. CMMS, computerised maintenance management system, there's like it seems simple enough that, hey, it's like it's a database where all your assets go in. How does that database integrate with the rest of your offerings? Whether it's your sensor-based technology, your remote monitoring, your building automation system. It's like building one cohesive database that talks to each other. It could be for space planning. Having multiple solutions out there, I think currently causes more grief because then you have to have bigger teams to manage those individual tools. I think an integrated tool is something that the owners and investors need to look out for. Then the other thing is continuous innovation towards building automation systems, like AI coming towards that where AI can help with properly maintain and manage rather than manual changes towards your building automations. Remote monitoring, predictive, like optimised maintenance programme. Then the other one is like CMMS, but it's more optimised maintenance. Don't just do something because someone or a book said so. I'm not talking about code or legislation. It's more around every asset is operated differently by a different client group, so you have to create an optimised maintenance plan. I think, again, looking at how do you create that and integrate that into your integrated CMMS tool.

DD [00:56:15]: This will be done in-house?

AC [00:56:18]: Yes, definitely. If you're looking at going to a third… Owners tend to have, like, owners I have seen is that they may have a service provider maintaining their assets and then have a third-party who is maintaining. I would say for the big key players out there, they're all providing this in-house. From an innovation perspective, this would be the next big thing is that rather than having 20 tools have worked towards a single tool that can offer your various tool offering, even projects, having a completely different project management software that does not talk to your CMMS is it's another gap. I think that's where some of the big players are working towards.

DD [00:57:01]: Understood. Perfect. Thank you so much for that. We are on time as well, so I'll just quickly stop the recording. Thank you so much again.

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