Any real estate agent can tell you—location matters. Location used to mean being in the right neighborhood, proximity to mass transit or having good restaurants nearby. But today, location also means proximity to quality cellphone coverage, and it can have a significant impact on the desirability and value of a property.
In the past, the first thing potential buyers or tenants might have done was ask about the square footage or explore the layout. But today they’ve already done that research ahead of time, so the tour looks very different. Now, the first thing they often do is pull out their smartphone and check how many bars they have. The real estate agent may be rattling off all the facts and figures for why the space is a perfect fit, but the prospective tenant is distracted walking around to make sure reception is strong throughout the space. That kind of scene is playing out every day in properties across the country, demonstrating how wireless connectivity is rapidly becoming one of the key buying/leasing criteria for commercial properties.
Wireless access may not be what makes the client sign a contract, but the lack of adequate connectivity is a major strike against a property—and perhaps even a dealbreaker. Poor wireless connectivity is also a growing factor in turnover of existing tenants in the commercial market. Frustrated tenants whose employees need to go outside their building to reliably send and receive calls and email messages are much more likely to move on to another space.
In an age where people always want to be connected and losing reception makes us feel as if we’ve been thrust back into the Dark Ages, poor indoor wireless connectivity isn’t just a technical issue. It’s an issue directly impacting tenant turnover—and ultimately your bottom line—as poor connectivity repels potential tenants and drives away existing ones. Factors that contribute to poor wireless access from the commercial carriers can include the building layout, construction materials, distance to the nearest wireless tower and surrounding terrain such as hills and nearby buildings.
In the past, a property owner’s only recourse was to pester wireless carriers to build a closer tower or make some other investment that the wireless provider likely viewed as the property owner’s problem. But today property owners have options that allow them to solve this problem in a way that enhances the desirability and value of their properties.
IBW is an umbrella term for a collection of technologies designed to solve the specific challenges of creating a consistent wireless communications system inside buildings such as office complexes, mixed-use towers, hospitals, schools, public buildings and other structures. The primary technologies that are used include:
Distributed Antenna Systems (DAS), a network of indoor antennas tied to one or more wireless carriers’ networks providing voice and data services.
Small Cell + Femtocell Network, a series of active access points generally connected over low-voltage cabling within the building to create voice and data services for a single wireless carrier. The indoor network connects to the outside world via a dedicated or shared internet connection.
Wi-Fi (aka Wireless LAN or WLAN), using enterprise-grade equipment (access points and central controller) to create data connectivity to both local (LAN) services and the internet.
There are pros and cons associated with each of these options, of course. Selecting the right technology will ensure that the implementation works best for the type of building in question and the needs of existing and prospective tenants.
For example, DAS have nearly an unlimited coverage range, making them ideal for large buildings with complex topographies. DAS solutions also give access to a variety of wireless providers, which may be important for tenants. In contrast, Small Cell networks work well, but limit all users to a single wireless carrier. WLAN networks are often attractive to property companies because the technology is a familiar one that their technical teams know well, but performance can be disappointing depending on how the network is set up and managed. A more detailed analysis of the pros and cons of each technology is available in the white paper: Enhancing Property Values through In-Building Wireless Connectivity found at www.centerlinesolutions.com/white-papers.
It is important to note that in-building wireless networks all require a financial investment, so there is a need to weigh the benefits of enhanced wireless connectivity against those costs. A DAS implementation typically costs $1 to $2 per sq. ft. to set up, the same as the cost of Small Cell and WLAN solutions, although those may also come with recurring internet access fees. Property owners have a variety of options for funding these wireless installations. For example, property owners may:
- Work with a specific wireless carrier to share the expense, given that your added connectivity will provide access to more customers for the carrier, which can often be a hard sell.
- Take on the full cost up-front, but then recoup it over time by charging tenants an ongoing fee that is incorporated into rental rates.
- Engage a third party who pays for the up-front costs and then either charges ongoing service fees back to the property owner or tenants.
- Simply factor the cost into their capital expenses for a property as a cost of doing business at a time when poor connectivity can be a dealbreaker.
Vince Varga serves as the manager of broadband solutions at Centerline Solutions, which designs, builds, modifies and maintains wireless infrastructure across the United States. With more than 15 years of industry experience, Varga has been integral in developing enterprise solutions for real estate firms, schools, hospitals, hospitality venues and public safety organizations across the nation. He can be contacted at firstname.lastname@example.org.