High-Speed Internet as Important as Plumbing, Developers Say

As more and more of our daily activities run online, slow Internet service now constitutes a major risk for a property’s reputation.

by Ely Portillo, The Charlotte Observer / May 22, 2015

(TNS) -- Ultra-high speed Internet such as Google Fiber still seems a bit fantastical to many people, but developers and real estate professionals say they can’t afford not to integrate the fastest speeds into new buildings any more than they could neglect to install plumbing.

Google Fiber is preparing to roll out its gigabit-speed Internet service locally – an executive said Thursday they hope to “light up” their first houses in Charlotte this year – and competitors such as Time Warner Cable are boosting their speeds as well.

“Reliable, fast Internet is a hot topic in the real estate community,” said Deputy City Manager Ron Kimble, at a forum in South End sponsored by the Urban Land Institute. Here’s what some of the players had to say about how the new ultra-connectivity is changing real estate:

Get ultra-high speed right, or get punished in the marketplace. “I wouldn’t say (renters) ask for it. They expect if. If it’s not there, they won’t live there,” said Greg McDonald, director of telecom support for Greystar, which is building the Ascent apartment tower uptown. He said Millennials especially expect the highest speeds. More and more of our daily activities run online – the Internet is now many people’s source of television and phone service.

Slow Internet service now constitutes a major risk for a property’s reputation. “We can’t tolerate a customer tweeting ‘I can’t get my Internet connectivity,’ ” said Tyler Niess, chief marketing officer for Charlotte-based Crescent Communities, which is developing multiple local apartment, office and hotel towers. “It’s a real risk.”

And Ian Davis, an attorney who works out telecom deals for real estate companies, put the impact of slow speeds like this: “Residents slaughter you on social media.”

  • “Forget about ‘everyone is connected’ – that’s so last year. Now, every thing is connected. That’s what Lee Bienstock, a Google executive from New York, said real estate companies have to consider. Americans will average 50 Internet-connected devices in their homes in five years, all running on broadband networks that have to handle the traffic. There’s even a connected toothbrush and connected pill bottles on the market, to help monitor brushing habits and medicine compliance (So if you’re prone to paranoia, the future is very, very scary). That means buildings will have to be developed with that level of connectivity built in, or face expensive retrofits.
  • Internet connectivity will impact buildings’ physical layouts. The Internet seems ephemeral, but Bienstock gave a concrete example: Same-day delivery. As more companies – Google included – push for same-day delivery services, many apartment buildings don’t have the package room space to accommodate the influx. If Google, Amazon and their ilk are correct, and we increasingly turn to the Internet for groceries and other necessities, buildings will have to be designed with that in mind.
  • More lawsuits. Davis said that in the first 14 or so years of his practice, he only saw about a dozen cases where a building operator aggressively went after a telecom provider for poor service. “A lot of people in the past were like, ‘Ah, just give me a contract, I’ll sign it,’ ” said Davis. But as Internet speed becomes more and more important, Davis said building operators are more willing to take action if someone they’ve signed an exclusive contract with doesn’t deliver the best service. He said his firm is handling about two dozen such cases right now.

©2015 The Charlotte Observer (Charlotte, N.C.) Distributed by Tribune Content Agency, LLC.

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