Intelligent Infrastructure: Clouds for Commercial Real Estate
Real estate executives need to understand the impact of clouds on their tenant base
By: James Carlini
Oct. 6, 2012 01:00 PM
If they plan to remain viable in today's markets, now is the time for real estate firms to make some dramatic changes by offering intelligent amenities in their commercial properties.
These questions are being asked more and more in the commercial real estate industry as the economy remains in a slump in many locations. Many executives are baffled because their usual management techniques are not working. In addition, assessments and property appraisals that overlook or discount technology within the property's infrastructure are inadequate at best, and totally erroneous at worse.
Cloud Computing Real Estate
A downtown office building appraises out at $230,000,000 and the buyer thinks they are getting a deal. They find out later that the building is technologically obsolete and in order to attract new corporate tenants, they need to do a $50,000,000 upgrade to the network infrastructure supporting the building. All of a sudden, that "great deal" will be lucky to break even in the first fifteen years.
Real estate executives have to understand they need to add broadband technology to their buildings in order to attract and maintain 21st century tenants.
The Game Has Changed
Traditional real estate executives better take some crash courses on applying network technologies to their different buildings and commercial centers if they want to become profitable again. And if they are into planning some new commercial developments, Master Planning must include Power and Network infrastructure upfront before prospective tenants sign up. This applies to individual buildings as well as next-generation business campuses.
Just as you wouldn't lease in a building that doesn't offer elevators, potential tenants are not as attracted to buildings that don't offer support for high-speed clouds and smartphones. In the last several years, corporate site selection committees have made "broadband connectivity" one of the top three selection criteria.
As I said in an earlier article:
20th century solutions do not solve 21st century challenges, yet graduate real estate curricula are targeted to the 1950s at best with their worn strategies, or the 1850s if they are really lagging behind.
It is not enough to know real estate, technology or infrastructure issues. The real skill set is knowing how all these concepts and individual areas converge together.
What Is the Smart Money Doing?
Smartphones are not going away. If you do not plan to accommodate Smartphones as well as other wireless devices your buildings will be deemed technologically obsolete.
Cutting the lease price per square foot will not remedy the shortcoming. That approach is so 20th century.
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Copyright 2012 - James Carlini
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