Let’s face it. The real estate industry is not known for its innovation. While there are some interesting ideas being executed and a few projects that maintain a high visibility among all of the buildings, communities and cities around the world, these represent a drop in the ocean. The real estate industry seems to be the only industry left without any game-changing breakthroughs. The time has come for change and, this time, change is coming from the bottom up.
Most changes have historically been pushed top-down, meaning that changes were initiated at the business/ownership level and tenants were not given much of a choice. More recently, we have seen the opposite taking place in many markets – it is customer demand that is shaping businesses, buildings and communities. The global “environmental awareness movement” is no longer the domain of tree-huggers, hippies and environmentalists. It is mainstream, which manifests itself in a plethora of services and products from battery-operated cars to energy- efficient shower heads.
Think about it – since the introduction of the iPhone, the roles have turned. It is now the people who demand how their environment is shaped and, with the resulting 24-hour economy, the delicate balance between work and play is at the forefront of the demands. Home equals work and work equals home. Therefore, all of the environments are required to fit the work-life picture. If they don’t, the potential location for living or working is not considered.
The next generation of home owners, business owners and hospitality customers are standing at the door, waiting to get in and spend their money. But their criteria have changed. They are standing in front of the door with their cell phones in their hands, checking the signal strength of the nearest WiFi access point. They are looking at the sprinkler systems and are online researching whether or not the water is recycled. They see the illumination and are wondering why the lights are turned on during full daylight. And, anything that is perceived as negative is Tweeted, Facebooked or Google Plussed with coordinates and pictures.
After all is said and done in this fast-paced world, the question of being too old inevitably surfaces – as a person, as a building, as a community. However, I don’t believe this to ever be the case.
Being old does not necessarily mean being obsolete. Staying current with the times and “grounded in reality” is not a matter of having every social media account possible; it is a matter of accepting and embracing change. It is the acceptance of the passing of time without the fear of irrelevance.
When technology is mentioned in connection with real estate, one of two images usually comes to mind: The first is one of spaceships attaching themselves to the side of the property at penthouse level, while a friendly electronic voice welcomes the vehicles’ occupants to the building of the future. The second picture is one of a property with so many screens and buttons that it is too complex to live or work in.
Both pictures are, obviously, wrong. But both pictures also have a commonality in the interconnected nature of all of the buildings’ systems. It is this commonality that is now becoming the pivotal point in real estate development, as well as in vintage building overhauling. What I am talking about is network connectivity.
The availability of network connectivity in any property, new or old, is what enables each and every part of what is important to the next generation of tenants. Property management systems can now be used intelligently to lower energy consumption and positively affect the environmental footprint of a structure. Property management uses networked systems to offer better service to the tenants and their guests. The tenants and guests themselves can influence their spending by analyzing their utility usage, giving them more control than ever over their homes and offices.
The commonality, once again, is the standardized IT network. When standard network connectivity is made available inside common areas, such as rest rooms, there is an immediate opportunity to serve the users better by having “smart appliances” use this network to give status to maintenance staff. Simple innovations report elevated levels of traffic in a specific restroom, a stall running out of paper, or a leaking faucet at one of the sinks. Strategically placed wireless access points are used to communicate with the maintenance staff for direct, on-the-spot service and, in some cases, preventive service.
With the right setup, the network can be turned into a value-added service to the tenants. It is not unthinkable to offer tenants a basic Internet connection as part of their lease agreements. Playing on the economies of scale, it may turn out to be more cost effective to share a properly sized connection with the tenants of the property, instead of everybody having his or her own. It is easy to see how this model can be turned into a profit center – in-house or outsourced.
If this sounds like a strange proposition, consider what your property would look like if everybody would get his or her own connections for power, water and sewer. The image that comes up seems rather absurd, but as far as internet is concerned, this is still the case. However, copper phone lines, with their limited capacity, are already brought to the tenant space and connections to the telco of choice are done centrally. There is no way around it. In a few short years, network connectivity will be part of the design, architecture and management of any property.
These are just a few of many scenarios where basic network connectivity offers amazing benefits that will spring new life into vintage real estate.
Taking a closer look at the benefits of smart buildings and communities will reveal some interesting facts about your property and your tenants. It will help leasing velocity and retention rates – and it all starts with network connectivity.