Technology, as it expands to encompass a growing amount of day-to-day life and business operations, is effectively recontouring the relationships and expectations of building owners and tenants alike. As emerging technology solutions, digital transformation and the promise of 5G drive new opportunities for businesses, in-building coverage and deployments to meet digital needs are becoming a much-discussed facet of commercial real estate (CRE). Yet, there remain many questions about what exactly building owners are expected to deliver, and real estate professionals are exploring how to provision those in-demand solutions.
At this year’s NEDAS NYC Summit, an event promoting collaboration and education at the intersection of wireless and wireline, a panel titled CREs and Tenants: What Technology Enablement Solutions Tenants Should Expect from Building Owner/Operators explored this exact topic. Moderated by Nicholas Stello, SVP of IT for Vornado Realty Trust, and featuring a panel of imminent industry minds across the CRE space, the presentation helped attendees delve deep into how the expectations on building owners are changing and how companies today are striving to meet evolving demands.
James Whalen, CTO and CIO for Boston Properties, acknowledged a shift in the way technology is being addressed in buildings, stating that his role has shifted to prioritize tenant-facing network facilitation and cyber protection. The driving factor of this shift, he adds, is a dynamic that is being created by building owners layering in new sophistications and new technology while tenants are upping the design of their own space (which bleeds into building-provided common areas). However, regardless of the source of this drive for expanded digital capabilities, the key element that was reiterated by all is the need to ensure that tech deployments are meeting the expanding needs of data security and next-gen capabilities.
Currently, there exists a boundary between tenant space and space that is serviced by landlords, and a common mindset is that landlords do not dictate what occurs inside the tenant space. However, going forward, this mindset is bound to change as this boundary dissolves and in-building technology is looked at like a utility that should be delivered to tenants. More and more, tenants and building owners alike are beginning to realize that coverage and connectivity are practically as basic as water and electricity, and so the expectation for adequate technology throughout all spaces is growing.
Part of the challenge surrounding CRE and tenant relationships is the fact that in-building deployments are not a one-size-fits-all solution. Joe Rich, SVP and CIO at Related Companies, notes that some tenants may not prefer some systems that are in place, and even though an adjustment is not in the lease, making the customer happy is key. As such, remaining flexible in this era of evolving real estate tech implementation is very important.
Admittedly, this changing relationship would have been much more easily accommodated in the era when carriers were in charge of the funding. Now that the responsibility has shifted to the owners or tenants, things like in-building cellular are becoming part of agreements before the tenant even moves in, and the logistics of private LTE and CBRS deployments are becoming fuzzy. While the funding aspect continues to be discussed and reorganized, the expectations of tenants are materializing far more clearly.
From day-to-day needs like important phone calls, to next-gen capabilities like facial recognition for building security and more critical uses like protecting tenants during an emergency, technological capabilities and adequate coverage are now a must in CRE. The way the landlord is providing services to the tenant is growing to accommodate the increasingly foundational role of capable connectivity. While this may be a daunting realization to some, it does pose an opportunity for differentiation in the marketplace. By provisioning spaces that seamlessly meet the needs of tenants, building owners can set themselves apart as landlords that support clients in their quest for 5G and other next-gen capabilities.
To learn more about this topic, please click here to view the entire panel presentation.
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