Role of communication infrastructure in commercial real estate

Role of communication infrastructure in commercial real estate
Feb 2016 , by , in ARTICLE

Despite the fact that Location, Location, Location remains to be the main concern for a business selecting new real estate, the standards used to evaluate buildings is shifting. It’s obvious that hyper-connected businesses are more and more trusting on high-performance networks competent of supporting cloud computing, Software-as-a-Service (SaaS), business continuity/disaster recovery and other high-bandwidth applications. This not only makes having an extremely consistent network connection essential, it also makes the higher communications infrastructure of a company’s office space a key part of its IT strategy and daily operations.

The location of its building is one of the most vital decisions that a business can make impacting employees, customers and others who work with the organisation. On the other hand, no two tenants are similar, with each one having an exceptional set of office space needs based on their business. For example, the nature of building, location and facilities necessitated by a large financial services firm are enormously different from an e-commerce storehouse or graphic design agency.

Demand of hyper-connected renter’s in commercial real estate

An online poll with numerous building owners and property managers has done across the country to know the significance of superior communications and it has been found that Ninety percent of them said that superior communications services are the fourth most significant selling point in the wake of place, price and parking. In high-rise commercial office buildings and with proprietors / directors of 2 million or more square feet of assets, communications potentialities rose to even more grandness.

This is as result of a varying workplace. Instead of a business entertaining email servers in its office, storing support files in its IT room and holding team meetings in a meeting room, now organisations are potential of using a cloud service for email, with its warehousing endorsed up to a data center across the country and gathering teams by means of video talks. Communal IT cloud services will furthermore account for nearly half of new IT expenditure in the coming years. A majority of building owners and property managers also considered higher communications services as a cutthroat advantage, in spite of of other traits. A notable undecided group accepted a trend in the market but is uncertain how it involves them; they may not have received straight feedback from potential renters to formalize this.

Benefits of Communications Services in Negotiations with Prospective Tenants

In today’s intriguing economy and cutthroat real estate market, the negotiation between a building owner and a renter is even more important to both parties involved, since the outcome comprises a fixed amount of income and cost, correspondingly, for years to come. In addition to bringing off the lease rate, which is still the top precedence, other terms and details need to be talked about and negotiated, such as who is accountable for preservation, how the space can be utilized, and early outcome details.

And, while rent rates may not have much space for negotiation (reckoning on the location and property type), other items may be more negotiable while also being very significant to renters. Apparently, access to higher communications services is an imperative assortment criteria and selling point, so does it come up in negotiations?  It is also expected that there is a high likelihood that building owners and property managers will face the subject of higher communications in future discussions with potential or current tenants. Those who do not already have access to superior communications services should, at a lowest, be prepared to argue their plan for bringing these services into their buildings in future, and be conscious of the accessible service providers in their special area.

Importance of Highlighting Buildings Communications Services

If you’re a building proprietor or developer, ensure that your promotion and sales materials feature the services and providers accessible within the instant area is the first pace to harnessing the power of your technology infrastructure to draw quality tenants. Be sure to talk about network access points, data or server rooms, and other onsite communications and technology amenities. If other brokers will be touring the property with possible renters, make sure they’re conscious of these services, too.

Many buildings also prefer to do a tech infrastructure audit that furnishes data on local area service providers, their accessible services and pricing, to make certain they can fully converse their competitive advantage.  Make sure out Wired Score which rates the connectivity of buildings in your area. Finally, make sure that you or your broker – have taken the time to comprehend the potential tenant’s business so you can respond their technology concerns and questions prior to they arise. Being practical and viewing the building’s value will go a long way in assisting to close the deal.

Role of Communication Service Providers in Occupancy rates

The information that roughly one out of every two building owners or property directors describes a encouraging impact in occupancy rates demonstrates that renters are identifying a high value on having access to a selection of higher communications services and the resultant benefits are as follows:

  • Almost one out of every two respondents believed that featuring access to numerous service providers in their buildings absolutely affects tenancy rates by up to 19%.
  • When looking at each region, the answers are very parallel to the nationwide data. This also agrees true when appearing at square footage under management.
  • On the other hand, when busted out by property type, warehouses makes the mainstream use of multiple providers (68%), which could be outstanding to the central position these properties play in moving inventory, order completion and associated logistics that need superfluous network connections to maximize uptime.

Access to numerous service suppliers in one building gives renters options for diverse services, plans, prices, and service level agreements, and the flexibleness to switch suppliers at a future time. More prominently for today’s hyperconnected businesses, access to numerous service providers allows for critical redundancy and load harmonizing, so that company can make sure that it maximizes network uptime and on the whole presentation.

It is also expected that public cloud services will rise four times quicker than overall IT expenditure in the coming years. It’s clear that hyper-connected occupations are more and more trusting on cloud computing, Software as a Service (SaaS), business continuity/disaster revival and other high-bandwidth applications. With this inclination as a backdrop, and working in a demanding economy and aggressive commercial real estate market, building owner and property manager are waiting for any benefit to draw and retain tenants and are more and more detecting this benefit with advanced communications services. Access to higher communications has become a very significant part of the building selection process for new and potential tenants that can completely impact vacancy rates, and is often asked about during negotiations with important tenants.

In order to draw and keep tenants, building proprietors and property directors need to offer property to higher communications services if possible, from multiple service providers over varied networks in their constructions. Ascertaining this and proactively marketing it to potential tenants will add value and help distinguish building portfolios as the IT outsourcing trend accelerates.

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