Technology Solutions

Increased Connectivity Defines Tomorrow's Smart Buildings

Looking at the typical life cycle of a commercial property, a building developed today has a projected life expectancy of at least 30 years. If owners have financial goals reflecting that life span, they must understand the next generation of high-tech commercial real estate to stay competitive.

In the late 1980s, smart or intelligent buildings were popular, but in reality, these buildings were not all that smart. Their systems were unsophisticated and unconnected. During the dot-com and telecommunications phenomenon of the late 1990s, developers raced to construct telcom hotels and hosting facilities, but overbuilding resulted in a bust. Most recently, owners partnered with telecommunications providers to bring high-speed Internet access to tenants, but due to incorrect business assumptions, unrealistic profit splits, and a lack of understanding about how and why tenants use broadband, most of these projects proved catastrophic.

The next generation of high-tech buildings will combine six fundamental technologies -- powerful computing, advanced broadband, wireless communications, a standard network, Internet appliances, and Internet-based integrated information systems -- with other amenities to create enjoyable tenant environments.

Building Features The common theme in next-generation high-tech buildings is a healthy mix of tenants and technology. These aren't properties to fill with telecommunications equipment; they are places tenants work. Most new smart buildings combine traditional office space with telecommunications facilities. Thus, if tenants need bandwidth, it can be brought up from the basement, fast, easy, and inexpensive. This strategy also provides insulation against trend changes.

Some of the digital amenities in these properties are advanced high-speed Internet access, a wireless communications strategy, digital signage, hosting services, and building intranets. Additionally, some projects offer shared high-tech amenities, such as digital conference rooms containing state-of-the-art videoconferencing services and presentation equipment.

While the idea of connecting a building to the Internet to manage everything from the security system to the parking garage is in its infancy, this technology represents an opportunity to improve building operating efficiencies and increase value. One application of this technology is wireless control, where lights, thermostats, door locks, utility monitoring devices, and other systems are connected wirelessly to the Internet. In the future, wireless management and systems diagnostics will be the norm in property management.

Representative PropertiesA handful of developers understand the makeup of next-generation smart buildings and have incorporated these technologies into new or redeveloped properties. The following three properties exemplify the future of high-tech commercial real estate.

New York Information Technology Center. Touted as New York City 's first totally wired office building, the 30-story NYITC was redeveloped by Rudin Management Co. in the mid-1990s. Located at 55 Broad Street in Manhattan 's Financial District -- also known as Silicon Alley -- the property has attracted tenants such as Cornell University , Deutsche Financial Services, Ernst & Young, Nokia, and Sun Microsystems.

The building's technological offerings range from inexpensive Internet access to satellite accessibility. Its satellite communication system allows high-speed digital or analog transmissions to multiple points anywhere in the Western Hemisphere . Multimode fiber optics provide high-speed connectivity among offices on multiple floors. Internet access ranging from DS-3 to fractional T-1 lines and up to 100 megabits per second of bandwith is available to all tenants.

NYITC's lobby features a 16-monitor video wall displaying tenants' Web sites, newsfeeds, and announcements. The property also is home to the Global Community Sandbox -- a 24,000-square-foot facility with videoconferencing technology and high-speed Internet connectivity that easily can be arranged into several room configurations. For tenants looking to take a break from technology, a lounge area known as the Hearth offers a computer- and phone-free environment.

Intech Park. Designed for businesses requiring high-tech office, flex, and research and development space, Intech Park in Indianapolis was developed by Lauth Property Group. The complex combines technology with outdoor amenities. Overlooking Eagle Creek Park , the country's largest city park, the 210-acre site has walking and bicycle paths, basketball and volleyball courts, outdoor plazas, a lake, and a picnic area. Construction began in 2000, and the complex eventually will house 16 office buildings, an extended-stay hotel, a day-care facility, and restaurants.

As for its technological amenities, Intech Park offers high bandwith and rapid data transfer speeds through tier 1 Internet access, meaning no outside Internet service provider is needed. Twenty-four-hour security is provided through card-key access and an electronic perimeter security system. A videoconference facility with satellite accessibility and dedicated multimedia equipment is available to all tenants.

Lakeside Technology Center . Listed on the National Register of Historic Places, the former R.R. Donnelly Lakeside Press building in Chicago was redeveloped into the Lakeside Technology Center in 1999 by Core Location. The more than 1.2 million-sf property is one of the world's largest carrier hotels, or a facility housing the servers and network equipment of multiple telecommunications companies.

While the building's early 20th-century faade was left intact, the interior renovation includes new electrical infrastructures, plumbing, fire protection, and heating, ventilation, and air conditioning systems. Physically, the property offers 13-foot to 16-foot ceiling heights, wide column spacing, 250-pound per square foot floor loads, and an inter- and intra-floor professionally managed riser system.

For its tenants such as Qwest Communications, XO Communications, and Global Crossing, the building provides 24-hour security as well as card-key access and closed-circuit cameras. Chilled water is available from a private power company for self-generation purposes. Multiple fiber pathways service tenants' connectivity requirements.

Future Benefits Understanding the benefits of next-generation high-tech buildings can be a boon to commercial real estate professionals. Not only are these properties better run, safer, and more efficient than traditional buildings, they are attractive to tenants, which translates into increased occupancy rates and higher property values.

Jim Young

Jim Young is founder of the Jamesan Group, a real estate technology service company in Carlsbad, Calif.; CEO of REApplications, an application service provider; and co-producer of te Realcomm conference. Contact him at (760) 729-4312 or jyoung@tjg.com.

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