With the evolution of data networks, cellular phones and smart devices driving demand for more infrastructure and technology among asset classes, properties are beginning to see the need for additional installations, site updates and telecom license agreements.
A recent BOMA Toronto webinar, Management Guide to Developing a Comprehensive Telecom Strategy, highlighted why property managers and building owners should learn to recognize what telecom assets exist on their site and how these assets can both generate and save money, while serving tenants.
“Regardless of the types of property you are responsible for, tenants are becoming more demanding,” said Jennifer Sicilia, vice-president and general manager of Telecom Property Management at RYCOM. “They will continue to look to their landlord to provide them with diverse telecommunications and amenity services, which address both their current and future needs.”
Identifying telecom assets
Results from a survey conducted before the webinar, which involved many building owners and managers, show 85 per cent of respondents knew of their building’s telecom assets. Yet, 15 per cent remain unaware.
Cellular services, rooftop antennas, WiFi and base building networks are valuable assets which property managers should know about before they implement and manage them, Sicilia noted.
These include, wired assets—both copper and fibre base—that provide voice and data and are represented by a service provider occupying space in the building; wireless and cellular services where communication happens over radiofrequency and service providers are found on rooftops, as well as in infrastructure and common areas; WiFi, which facilitates the ability of mobile devices to communicate designated areas for both tenant and property use; and base-building networks, also known as smart buildings, which can be composed of fibre and copper-base infrastructure and are primarily intended for property use.
“In some cases,” Sicilia said, “properties have actually paid for the assets without realizing their full potential.”
One of many examples highlighted during the session concerned a building where telecom wasn’t factored into the initial requirements of a property’s expansion. A 700,000-square-foot property undergoing expansion had a set telecom license agreement—a contract between site and service provider. However, the agreement disregarded terms outlining who would be responsible for relocation costs when moving the provider’s infrastructure from one location of the property to another.
Sicilia stressed that the lack of terms caused delays and both the service provider and site had to share the cost of the room, which was approximately $200,000.
To avoid such risks and liability, it is important for a site to ensure licensing agreements with terms and conditions. Sites with a national presence are urged to consider investing in a standard agreement template to guarantee assets are in sync.
Besides solidifying a telecom license agreement, it is also important to control who is coming in and out of a property. Sicilia suggests that managers work with tenants who are leaving the building to remove their infrastructure. For example, when a lease has ended, tenants should remove their antennas from the rooftop. A documentation process to track such infrastructure, while including such terms in a lease, is important to control ownership of installations.
Save and generate money
Sicilia emphasized that a license agreement also has the potential to generate a revenue stream.
One site, comprising one million square feet, decided to implement a building-owned network, after realizing the various building vendor systems that lived on the property from separate cabling infrastructure to separate hardworking installations.
“Sites typically do not have control as they are independent systems,” said Sicilia. “They recognize that there are inconsistent installations that become difficult to manage.”
The particular site had asked each building vendor to submit two prices. The first would include each cost per vendor for cabling and network. The cost to have each building vendor installing independent systems was $437,000 over a two-year period. This price included electrical requirements, but excluded the actual cost of the building system.
The second price would exclude cabling and network that was to be provided by each building vendor; instead the building system would be built and owned by the property. The cost to the site to install its own building fibre backbone, with the ability of control and future growth, was $334,000.
The site saved about $103,000 in capital because it opted to build its own infrastructure.
“The building now owns the network which gives them the control of what building vendors will come into the property and connect,” said Sicilia. “They found they were able to deploy systems much quicker.”
After the network was installed, the site began to see hidden operating costs as a result of independent systems, such as monthly internet, phone lines, and maintenance and monitoring fees for the other vendor infrastructure. Once the services were shared on an enterprise network, the site was able to consolidate and manage the costs. After the first six months of deploying the network, the property recognized operational savings of almost $40,000.
Define a building strategy
After telecom assets are identified and a comprehensive list is established, the next step is to review existing processes and create new guidelines for managing them on an ongoing basis. This can be implemented through best practices to improve service delivery, while defining ways to save, generate or reduce cost.
The RYCOM team emphasized that a management team should know who is facilitating work on a property on a daily basis to ensure processes are being followed, while acting quickly on remediation work. Re-evaluating and improving the process can be further leveraged when consulting with industry peers to share lessons learned.
Benefits of such processes create competitive advantage, as seen in other examples. For instance, a RYCOM client managing a high-end downtown property in Toronto was undergoing a rebranding process to differentiate itself from competitors.
Knowing about the site’s several telecom assets, which other properties in the area didn’t possess, helped the client create a telecom leasing factsheet outlining telecom amenities for both existing and prospective tenants to differentiate the offering. This process became a valuable tool to leverage leasing discussions and promote tenant amenities.
Rebecca Melnyk is online editor of Canadian Property Management and Building Strategies & Sustainability.