Property managers, owners and builders are missing an opportunity to increase profits through attracting modern, mobility-favoring tenants. The easiest way for a property to miss out on revenue is to lose tenants to turnover, or worse, not to get them in the first place. To get them in the door, your property must be well-maintained in your tenants’ eyes, and your operations staff must be able to work efficiently throughout your property to make this happen. These needs hinge on mobile connectivity, an area in which many properties are lacking. You already provide utilities (water, energy) and amenities (parking, workout facilities), but you may not be aware of in-building wireless, a compelling way to attract and retain tenants in our technology-centric era.
The Opportunity
Figure 1. Benefits of an in-building wireless system, Commscope (2015).
In-building wireless — which is only present in 2 percent of the commercial real estate space — can be a massive untapped opportunity for property owners and managers to increase the loyalty of their tenants and even their property values. For tenants, good mobile connectivity means increased productivity. So much so that 66 percent of enterprise tenants rated indoor wireless connectivity as essential for employees, as reported by CommScope in its 2015 article, “Wireless in Buildings: Overcoming The Barriers to Wireless Connectivity.” When these tenants feel more productive, they are more likely to renew their lease (see Figure 1).
With the direct effects of tenant turnover on property cash flow, increasing tenant satisfaction is an important concern. In order to keep tenants renewing, it is imperative that the property is comfortable and well- maintained with competitive features. In a world where more things, both business- and leisure-related, are web-based, improved mobile connectivity is a strategic way to increase tenant happiness and, in turn, property renewals. Research around the issue of managing the high costs of turnover reveals that the best solution is to “never let it get to that point: encouraging renewals is always preferable to turning units over,” and enhancing mobile connectivity is a tactical way to keep tenants renewing — as Linsey Isaacs and Derek Mearns put it in their Multifamily Executive article, “Keeping Turnover Costs Low.”
For building management and operations, mobile connectivity is important for staff in the performance of duties around the property. As reported by Pete Swaby in his article “Mobility, Performance, and Engagement, published by The Economist in 2016, half of respondents in a survey of property operations staff said that the ability to work from any location at any time has the greatest effect on their productivity. In “Transforming Real Estate Operations with Technology, Automation and Innovation” published in 2014 by Realcomm, Jim Young wrote that mobile devices are also seen by experts as the largest component in the daily operations of a property. Therefore, any gaps in wireless coverage within a property translate into lost efficiency. Seamless connectivity indoors and out is a reality property owners can create to benefit both tenants and staff.
The Problem
Wireless communications are a crucial part of our modern day-to-day lives, but can be frustrating when connectivity is unavailable or unreliable; anyone who has ever dropped or missed a call because of poor cellular coverage knows this. In a 2013 survey of business tenants conducted by AT&T and reported in “AT&T Small Business Wireless Rules,” two- thirds claimed it would be a major challenge to survive without wireless connectivity. If a business is lacking coverage and can’t survive in its current workspace, it has two options: find a new space to lease or pressure the owner to fix the problem.
Market studies have exposed a driving need for improving in-building wireless communications, noting that:
· Mobile traffic has increased massively and will continue to grow (reported in 2014 by Adam Lella and Andrew Lipsman in “The U.S. Mobile App Report” published by comScore
· Eight percent of all data funneled to mobile devices is being consumed indoors (Pete Swabey)
· More than half of large U.S. offices have noticeably poor indoor cellular reception (as reported in 2014 in Jeffrey Spivak’s UrbanLand article, “Raising the (Phone Coverage) Bars in Commercial Buildings.”
Figure 2. Cisco Visual Network Index Mobile (2016).
Most properties are not exempt from the problem of poor in-building wireless coverage. A 2015 Commscope article, “Wireless at the Office: Are You Meeting Subscriber Demand?” says that three out of four enterprise tenants reported that employees had to move around the building or go outside to find good reception. Not only is poor connectivity inconvenient for tenants, but it can be extremely inefficient for building operations staff when they need to work in traditionally poor coverage spaces, such as a basement, stairwell, or interior room (see Figure 2).
Who is Responsible?
Unfortunately, it is often unclear who exactly is responsible for improving indoor connectivity. According to “Wireless in Buildings: Overcoming The Barriers to Wireless Connectivity” by Commscope, most building professionals place the responsibility on the mobile network operators to solve the problem, but in most cases, it is the property owner’s responsibility to deal with this issue. The company pointed out that for property owners, there are several common roadblocks to implementing an IBW system: the cost of the network, the complexity of the technology and a lack of skilled workers to manage the system.
Technology Options
As a solution, in-building wireless comes in a few different flavors, but the goal remains the same: wirelessly connect tenants, guests, and other building occupants to the network services and software applications that they want and need. Whether it’s in an apartment building, commercial office building, hotel, healthcare facility, school, mall or public building, everyone now depends on reliable mobile connectivity where they work, live, learn, shop and play.
With an in-building wireless system, your tenants can be more productive (voice calls and email), more engaged (video collaboration and instant messaging), more efficient (building automation), more entertained (Netflix and Facebook), and safer (911 and public safety).
To create a mobile-friendly property, three main technology options are available: a distributed antenna system, small cells/femtocells and Wi-Fi. The benefits and tradeoffs of each are detailed in Table 1.
Table 1. In-building wireless technology options.
Wireless Considerations
Mobile network operators, also known as wireless carriers (think Verizon Wireless, AT&T Mobility, Sprint and T-Mobile USA) have all paid substantial FCC license fees for exclusive access to and control of specific radio spectrum in a given geography. Because of this ownership, carriers require any in-building wireless system to be approved and retransmission of their spectrum authorized prior to connection with their mobile network.
Obtaining this approval involves knowing the right carrier personnel and processes; therefore, when pursuing the implementation of a carrier-involved in-building wireless system, it’s best to engage an experienced supplier with established mobile network operator relationships.
Funding Options
Historically, in-building wireless systems at large-scale public venues like convention centers and sports stadiums have been funded with the mobile network operators’ capital budgets. At ‘private’ facilities needing improved mobile network connectivity, in-building wireless may be partially funded by the carriers, but only if they have a compelling financial incentive. To determine if there is value in it for them, carriers look at the number of corporate subscribers, the contract term commitment and the risk of losing those subscribers.
With the increased adoption of BYOD (Bring Your Own Device: the practice in which enterprises allow use of personal mobile network subscriptions and devices [smartphones, tablets and laptops] for work purposes), mobile network operator-funded in-building wireless is becoming less feasible. Because an enterprise loses its buying leverage with any given carrier, the case for mobile network operators to invest in the in-building wireless system is largely reduced.
Another funding option is the solicitation of a third-party operator to fund, design and deploy the IBW system. In this arrangement, third-party operators typically require more than a 10-year commitment from the building owner. Although the financing looks attractive, there are risks to the building owner in that any changes or upgrades to the in-building wireless systems are under the control of the third-party operator.
Property owners can implement a technology fee (if correctly crafted) to offset the capital expense (capex) and opex of in-building wireless systems.
In-building Wireless Coverage
It’s important to understand where connectivity is needed within a property, because the entire building may not require coverage from all carriers. A simple assessment survey performed by a reputable integrator can give an idea of the current baseline coverage a property receives from surrounding outdoor cell sites and what it would take to fill in any holes in coverage.
For Wi-Fi services, installation of equipment is relatively simple because the building owner has complete control of the system, meaning no outside approvals are necessary. However, complexity enters the equation when each tenant provides its own Wi-Fi coverage — bringing poor signal quality due to RF interference, or when the property owner installs one shared Wi-Fi system — bringing complexity in creating secure, segmented and controlled connections for each tenant.
Care and Feeding
Ongoing in-building wireless network monitoring and management can come from several sources. For large organizations, a dedicated, internal technical staff should be able to diagnose problems and make changes to the in-building wireless system, although some problems may require outside technical support. For other organizations, external support personnel may make more sense. Monitoring and maintenance service contracts of various scale and scope are available on the market.
By Vince Varga, Published by AGL Magazine
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