Demand for in-building cellular is pointed, but market education gap remains
By and large, a modern enterprise needs in-building cellular coverage and capacity. But in the context of commercial real estate owners and managers, there remains a gap in market education, as well as a lack of consensus in regards to whom foots the bill–the carrier or carriers, the building owner or manager, or the tenant.
During the Wireless Infrastructure Association’s HetNet Expo in West Palm Beach, Fla., Adrian Berezowsky, senior director of CBRE’s Telecom Advisory Services Group, and Nicholas Stello, SVP of IT for Vornado Realty Trust, discussed these trend lines in a panel discussion moderated by Rich Berliner, publisher of Connected Real Estate Magazine. Berezowsky and Stello brought generally overlapping points of view with some variation marked by the former’s position with a company that manages buildings as opposed to the latter’s role with a company that owns properties. Both agreed that market education is the foremost hurdle to solve for enterprise in-building cellular adoption.
“We are in a different position,” Berezowsky said. “We are managing properties on behalf of numerous clients, while Nick has to educate a handful of his peers…we have to educate every single one of our clients. It’s all about educating the enterprise community as to why they need coverage and capacity in their buildings. That’s been a large part of our challenge.”
“Education is really important,” Stello agreed. “We’re a real estate company, not an IT company. The education comes over time. It came over time and the appreciation, if you will, and the value of what we’ve been doing has really hit home when you have a 250,000-square-foot lease that’s predicated on technology.”
He recalled six years ago when a tenant in Culver City, Calif., wouldn’t sign a lease unless coverage from AT&T was guaranteed. That was followed by a a request from a tenant at a Madison Avenue property. “That all changed with a recent tenant acquisition, Park Avenue property, 250,000-square-feet, they were adamant. Not only did they put it in the lease, they set determinations and requirements of what the coverage should be. That was a stark difference from what I’ve encountered. We had some back and forth with the carrier, the tenant, myself and the leasing guys to really say what should be reasonable coverage. They accepted it, we all signed off on it.”
In that case, the carriers footed the bill for installation, although he said the building was pre-wired so it was a comparatively simplistic process. Here’s where the two points of view differed.
“Our core clients,” Berezowsky said, “are more and more understanding of the fact that they may have to contribute fully or partially. And a lot of them are willing to do so. Some are even eager to do so.”
For Stello, the model is still the carriers pay. “I wouldn’t say that we have leverage over the carriers,” he said, but, “Right now, still on the carriers. There will come a day when we have to cross that bridge.”
But, for now, it all comes down to market education. “I think the first step,” Berezowsky said, “it’s not really marketing. It’s truly education. The biggest hurdle you’re going to have with the enterprise community is truly educating them on why they need coverage. It is something that’s necessary. The number of enterprise clients that are aware of what they want, what the solutions are, it has changed. It has increased.”
