As the trend of converting existing commercial properties to reuse as residential communities accelerates, a question developers should consider early in their plans is: Which internet technology is right for retrofitting these spaces?
The answer is extremely significant, because construction materials used in vintage properties—such as steel and cement—are not conducive to technologies like 5G and bulky cabling.
Fiber is the optimal solution that makes sense when converting older office buildings. But it shouldn’t be an afterthought.
“Investors and developers should consider the connectivity platform—which is the central nervous system of broadband for multifamily retrofitting projects—very early in their design process,” says Giles Widener, Lead Product Manager at Quantum Fiber.
Conversions are welcome in today’s economy
An acute housing shortage is driving this wave of converting former office buildings to residential properties. These new properties are extremely welcome in cities where office occupancy rates have failed to recover from the pre-pandemic rates. Before COVID-19 hit, 95% of offices were occupied. At the end of 2022, the national office vacancy rate was at a nearly 30-year-high of 17.1%.
So the conversion rush is on. A 2021 National Association of Realtors (NAR) study of 27 major metro markets estimated that as much as 20% of vacant square footage could be transformed into residences. Developers are jumping to take advantage of the opportunity. For example, New York developer Silverstein Properties last year announced it was raising a $1.5 billion fund for office-building conversions across the country, and says it expects the national market for conversions to be worth up to $10 billion.
Multifamily developments have been the most common reuse for outdated office buildings. Since 2016, CBRE tracked 89 completed office-to-multifamily conversions across U.S. office markets. In total, these initiatives slashed office inventory by 16.4 million square feet and increased residential units by more than 14,000 apartments.
Choose the right technology for your property
When it comes to retrofitting, challenges abound. Connectivity is at the top of the list of key challenges. Internet and wireless are fast becoming “must have” amenities, and any retrofit building will require broadband infrastructure to make the units attractive to prospective residents. New data from the 2022 National Multifamily Housing Council (NMHC)/Grace Hill Renter Preferences Survey Report, found renters are even more serious about their internet connectivity in their units, with nine out of 10 respondents saying they were interested in or wouldn’t rent their home without it.
5G is not the optimal solution in a retrofitting job. As with all other cellular technologies, 5G depends on radio signals to send and receive data when used in home internet. But like other radio signals, 5G signals decrease as they move away from a transmitter, weakening quite quickly compared to other signals due to their high density. 5G signals also struggle to penetrate solid walls made of concrete or steel. This shows that if a building had coverage issues with previous cellular systems such as 2G, 3G, or 4G, 5G won’t solve them.
Here are several advantages that fiber internet offers over 5G, cable, and other internet connectivity alternatives.
1. More attractive to residents. As a marketing selling point, fiber internet is a top amenity that can differentiate communities hoping to stand out in crowded marketplaces.
2. Future-ready. Property owners who choose fiber have a future-ready system with plenty of untapped bandwidth. Builders and developers can earn greater ROI on their investments by not worrying about future upgrades as new technology becomes available.
3. Most viable for retrofitting. Because it is so flexible, fiber can be bent around corners, twisted, and angled into tight spaces. That can make it more cost-effective and easier to install when modernizing existing properties. Some fiber is even small enough to be almost invisible when carefully placed along ceilings or molding. “The flexible nature of fiber means you can pull it through much smaller gateways and conduits than you would with a traditional type of cabling,” says Widener. “That way, you can get it to each individual living unit within a building.”
4. Delivers every type of digital service. A single fiber delivers everything from basic internet browsing to video to voice. Therefore, there is no need to install multiple types of wiring for individual services.
5. Saves electricity. Fiber-optic cables are more efficient when it comes to moving data—plus, fiber uses less energy than copper wires.
“Fiber is, ultimately, both much more cost-effective and sustainable than the other options,” says Widener.
Start early and plan thoroughly
The United States faces a gap of at least 5.5 million homes over the next decade, according to a study by the National Association of Realtors. Therefore, it’s no surprise that redesigning office spaces into multifamily developments has accelerated in the last year and could go a long way in 2023 towards helping with the residential housing shortage.
But in terms of getting started with a connectivity strategy: The earlier you start in a project’s lifecycle, the better off you are. There are at least eight considerations for selecting the right fiber provider.” Widener simply puts. “Choose a service provider and work with them as early in the process as possible—ideally in the early stage of contract negotiations. That way, you can ensure that the provider can get the service within their engineering specifications timeframe.”
Quantum Fiber has a dedicated project implementation team with a project manager who works with the building owner or developer during each installation. The project manager ensures that all designs will be installed and implemented within the building in question in the most efficient and cost-effective way possible.
“We work with the construction team on scheduling, as well as timelines related to move-ins, move-outs, and access into units to ensure that we have the technologies installed in each of the living units,” says Widener. “We’re there for our customers, end-to-end.”
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