Browse Tag: infrastructure

Google Loon: The Future Of Internet Service For Remote Property?

It’s a fact of life in commercial property development that infrastructure must keep up with new construction. Value of new construction approaches zero when connectivity to that property – transportation, electrical, telecom, water – is not available.

The obligation to run internet connectivity to remote locations is a huge challenge that brings a capital-intensive need up against a vast physical frontier.  When pushing data or telecom cabling into that frontier, costs can be astronomical and networks can be physically fragile.

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Mayors: Infrastructure Woes Top Priority

Boston University’s Menino Survey of Mayors (PDF follows the link) puts it plainly: the central challenge facing US cities and the greatest roadblock to expanding and adding value to land and developments is the sad state of US infrastructure.

Conducted by the BU Initiative On Cities, the survey asked US Mayors for answers on a range of issues concerning challenges facing urban development. But the starkest response came when the mayors were asked to look over the next five years and select the single state or federal matter that posed the biggest challenge.  Infrastructure came back in nearly 50% of responses, dwarfing guns, energy, healthcare, education and other responses.

Heightened Tensions Between State and Local Governments Cited

Study authors identified a greater-than-ever break between state and local government as an enormous problem.  From the BU study’s authors: “City-state conflict has a long history in American politics, but several mayors saw recent fissures as particularly problematic. For example, one mayor stated that he believed that state interference with local autonomy was “accelerating [in] the last five years.” In many instances these disagreements reflect tensions between cities’ claims to local autonomy on issues like the minimum wage and states’ claims to advantages of consistency within the state.”

In a commercial real estate industry whose profitability rests on physical access to property and functioning amenities, the bleak infrastructure outlook of mayors should be front and center in any market analysis going far enough forward. As we have seen time and time again, ignoring long-term risks will lead to real estate industry disaster.