In Offices, It’s Getting Harder to ’Hear Me Now’

New work patterns burden telecom systems, landlords and tenants. But it’s fixable.

It’s probably not you. Cellular coverage and Wi-Fi in office buildings are in high demand, and that could be impacting the quality of your phone calls, video calls and document transmissions.

Jason Lund, JLL
Jason Lund, JLL

Deep shifts are underway in how workers use tech, so telecommunications infrastructures within buildings and cities—cellular networks, fiber and cable networks, even electrical grids—are working overtime to accommodate both in-office and hybrid work models.

“In office buildings, we’re not getting the same level of cellular connectivity that we used to because the frequencies themselves have changed and how we’re using our cell phones has changed,” said Jason Lund, managing director with JLL.

This is particularly true since a good portion communications with teammembers and clients today are virtual. “We’re draining a lot more of the signal in both the Wi-Fi frequencies and the cellular frequencies than we ever have, and that’s putting a lot of stress on the old equipment from 4 or 5 years ago,” Lund continued.

He likens the situation in some buildings to a watering hole: “If there’s five animals drinking, that’s okay,” Lund noted. “If there’s 50 animals drinking, they drain it dry. So, we’re getting more and more calls from our clients going, ‘Hey, we can’t get cellular anymore.’ ‘Hey, Wi-Fi is slow now.’”

If owners aren’t responsive, he warns, tenants can get impatient and fix it themselves. Or start looking for new watering holes.

READ ALSO: Infrastructure Upgrades Are Critical for CRE’s Future

Jason Shepard, managing principal with Cresa MCS, pointed out another growing demand on telecommunications infrastructure. “As the software industry shifted to delivering products via the software-as-a-service cloud model, the proximity between a SaaS provider’s servers and the end customer makes a difference,” Sheperd said. “Whether that’s in a server room in customers’ office buildings, in a stand-alone data center or in third-party data centers, the fiber distance/latency, levels of capacity and redundancy become increasingly important.”

To better handle all this, Lund suggested viewing telecom infrastructure as three-layered. First comes the base networks, which are basically the cables that come into the building and up to its various floors to serve the tenants through docking stations or directly into computers or phones.

Second is Wi-Fi—similar to cellular service in that both operate on radio frequencies—often used for access to printers and other equipment. Third is cellular. The older model was simpler in just relying on outside towers for the cellular signal.

Image by D3Damon/
Image by D3Damon/

Who’s footing the bill?

Barton DeLacy, Cushman & Wakefield
Barton DeLacy, Cushman & Wakefield

Here’s the rub. While tenants and employees raise their expectations, the budget to make it happen often does not.

For space to be competitive currently, state-of-the-art technology is assumed, and the connectivity is expected to be first-class, remarked Barton DeLacy, executive director at Cushman & Wakefield.  “What’s keeping a lot of Class B and C, and frankly even older Class A buildings, empty is the cost of tenant improvements, and the technology is very much part of that,” DeLacy said.

In multiple markets, he added there are “whole floors of see-through buildings,” but the cost to upgrade them for new tenants can’t be supported by the rents.

READ ALSO: GenAI Is Coming for Your Tech Roadmap

And there’s another aspect to the question of who’s paying for telecommunications upgrades. “With office occupancies falling on average, and some buildings selling at steep discounts to previous sales, capital for renovations, upgrades etc., is a challenge today,” said Aaron Jodka, research director for U.S. capital markets at Colliers. “Some lenders have pulled back on office financing.”

Aaron Jodka, Colliers
Aaron Jodka, Colliers

So, who does pay for better technology infrastructure? Lund reasoned that, in some cases, building owners are partnering with large tenants, while in others there’s still a debate. “If you get in a cellular system to serve the whole building, and it serves a particular tenant, then that’s great,” he said. “But if that tenant leaves, then it’s still serving the building. So maybe the building owner should have the cost. But if you get in a system that serves a large tenant in the building, and that’s the only place that’s served, then maybe the tenant should bear the cost.”

Still, when the money can be found, the investment reaps dividends. Lund describes an office high-rise in Charlotte that JLL helped a client renovate.

The client found that people liked to work on the building’s outside patio, so the renovation included extending the Wi-Fi there, as well as to an amenity space that covers almost an entire floor. The result, Lund continued, was that employees in the building can leave their offices and work freely in those other spaces.

The Power of timing

Jason Jones, Cresa
Jason Jones, Cresa

Jason Jones, managing principal and head of Cresa’s Business Technology Sourcing Group, cautioned that tenants should start their process of ordering telecom circuits “much earlier than they think.” If cable or fiber service has not yet been established in a building under consideration, tenants have to take into account the time it will take to design, construct and install the needed equipment. Just by itself, he said, this could take at least 90 days, but often takes several months.

This is in addition to the typical 30 to 90 days to execute a “right of entry” agreement, a contract between the carrier and the landlord setting the terms and conditions of allowing internet service to be established in the building.

And it can be even more complex than that, added Arie Barendrecht, founder & CEO of WiredScore. “While demand has only gone up, ensuring a building can support these requirements on move-in day is no easier than it was several years ago,” he said. “For example, creating new, secure underground fiber entrances into buildings is still a long and expensive process with multiple parties involved, and needs to be planned long in advance.”

Multiple solutions

Arie Barendrecht, WiredScore
Arie Barendrecht, WiredScore

Because the issues with keeping telecommunications infrastructure current and functional arrive from different directions, so do the solutions.

One element is flexibility because that’s what tenants expect. Office occupiers now, especially smaller ones, often decline a traditional five- or 10-year lease, Lund mentioned. A tenant might ask for a 38-month lease, for only a portion of a floor, with no long-term contracts for internet access. Yet they still need firewall protection, monitoring and cloud access. And if they don’t necessarily have a walled-off space, it’s hard to know where to run cables. And the tenant expects to be billed for only what they use.

If tenants find out too late, after a lease is signed, that they have poor cell coverage, Jones noted, they still have options, such as signal boosters and repeaters, or distributed antenna systems. There are also short-term solutions such as satellite or month-to-month cellular service.

Panettieri, NLC
Angelina Panettieri, NLC

Jones also recommends considering a “wired cellular” solution such as one from the Wireless Infrastructure Group, a U.K.-based company with a growing U.S. presence. He describes it as “a new model for bringing in a wired connection of cellular service that is then ‘beamed’ throughout the building wherever repeaters are placed.”

It isn’t just building owners and tenants who are wrestling with these issues. Angelina Panettieri, legislative director for information technology and communications at the National League of Cities, remarked, said municipalities must also tackle this issue to stay competitive and to manage their own  destinies. “An increasing number of communities are exploring building and/or operating their own broadband infrastructure to gain some control over the distribution, cost and quality of that infrastructure,” she said.

She recommended the Institute for Local Self-Reliance as an excellent source of information about such municipal and cooperative networks.

Read the May 2024 issue of CPE.

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