Smart Pads

When it comes to apartments, how much technology is too much?

When It Comes to Apartments, How Much Technology Is Too Much?

By Dees Stribling, Contributing Editor

businessman holding a tablet computer with system clever house

At the Consumer Electronics Show in Las Vegas early this year, “wearable technology” attracted a lot of attention, but smart-home gadgets were also hot stuff, as they have been for some years now. Many of the newest smart-home devices are clearly aimed at homeowners or tenants—not landlords—such as apps for smartphones that control lights or appliances from a distance, which was a major push by Samsung at its Smart Home exhibit at the show.

But which emerging smart-home technologies will be suitable for multi-family properties? That is still an open question for a number of reasons. One is expense, since the newest technologies tend to be the most expensive ones, and even owners who are eager to upgrade their properties might be reluctant to spend money on relatively new technology when they can buy more tried-and-true amenities such as a luxury spa or Subzero refrigerator.

More fundamentally, technology evolves so quickly that today’s cool tech amenity, even in a top-end property, might be tomorrow’s standard, and so hardly something that would make a building stand out. “A number of tech features aren’t popular in top-end rental or sale buildings because technology has evolved as a personal choice and has become relatively inexpensive,” said Nancy Packes, president of Nancy Packes Inc., a specialist in marketing multi-family residences in the New York area.

Few buildings, for example, would offer speakers built into the walls, regardless of how sophisticated those speakers were or powerful their woofers and tweeters. “Speakers have become very small and portable,” Packes said. “How to place them is a personal choice.”

Also, there is the real risk of time bypassing what used to be state-of-the-art technology. “Technology changes too frequently,” Packes noted. “Buildings were providing iPod docks at one point. That fad didn’t last.”

On the other hand, multi-family has been the growth sector in commercial real estate in recent years, so some new tenant-pleasing technology features are being added to new space or retrofit into older space. Among the younger, rent-by-choice demographic, after all, tech is an important component of their lifestyle. The thinking is that properties with useful tech features stand a better chance of capturing that demographic.

For example, “even in the older buildings we’re seeing some retrofitting with fiber optics,” said Gebroe-Hammer Associates president Ken Uranowitz, who brokers investment sales of multi-family properties in New Jersey and nearby states. “Being able to offer high-speed Internet can be an important amenity for some buildings.”

Important, but often expensive. Google, for example, recently rolled out its Google Fiber program as a test in Austin, metro Kansas City and Provo, Utah, which offers 1-gigabit-per-second broadband service. For apartment buildings, the service costs about $300 per unit to install, and the information giant requires apartment landlords to pay the cost upfront within a year. There is a possibility that landlords can recoup part or all of that expense in the form of rebates from Google if tenants sign up for a premium version of the new Internet service, but that is not guaranteed.

Still, a number of apartment owners feel that fiber optics is important enough to offer it (whether through Google or another system). Last year, for instance, Digital West Networks connected the Roundhouse Place Apartments in San Luis Obispo, Calif., to the fiber-optic network that the company has been building in the city since 2008. Currently, 23 miles of fiber-optic network are already in place in the area, providing 75 “lit” commercial buildings with Internet services normally found only in larger metro areas. The Roundhouse Place, which includes 39 market-rate units that are newly open for lease, is its first residential project.

“The fiber has been a real attention-getter and a deal sweetener, especially for our tech-savvy renters,” said Andrew Fuller, developer with Fuller Apartment Homes and Presidio Capital Partners. “For those who aren’t as familiar with fiber optics, we tell them, ‘It’s kind of like the Google Fiber project comes to SLO,’ and then they get it.”

No Key Required
Keyless entry is another kind of technology that might come to rental properties in the not-too-distant future. There might come a time when removing keys from a pocket or purse and manually inserting them into your apartment door will be hopelessly old fashioned. A new generation of keyless locks is coming on the market that are activated by codes or fingerprints or smartphones—or some combination.

The Kwikset SmartScan Biometric Deadbolt, for example, recognizes fingerprints to unlock doors, with as many as 50 unique fingerprints programmable into the lock. An example of a lock that uses a number code is the Design House Electronic Keypad Entry Lever (again, as many as 50 codes can be programmed in), while Schlage Nexia Home Intelligence allows tenants to use their smartphone to lock and unlock, as well as keep tabs on who has been using the lock and when.

When it opens in April, CrownVillage at Elm Ridge, a 272-unit apartment complex in Broken Arrow, Okla., will feature keyless door entry. Residents will be able to open their door locks with a key fob that also allows them access to the property’s front gate, pool and other common-area amenities. Like systems that use key cards, the fobs can be cleared of their data to be re-used for another tenant, sparing the landlord the long-term expense of changing locks.
Keyless entry, so common in hotels, is still an expensive proposition for most apartment landlords—perhaps as much as $250 per system. But according to Leinbach Co. president Ed Leinbach, whose company is developing CrownVillage at Elm Ridge, the extra expense will be worth it to help make the property distinctive in the Tulsa market. So far, no other apartment property there has the feature.

Another technology amenity that seems to have some legs in multi-family settings is distributed antenna systems, which boost wireless connectivity in areas that might otherwise receive inconsistent or spotty reception—such as an apartment tower surrounded by other tall buildings. Strong reception is particularly important as people move away from landlines and use cellular phones as their main means of telephony.

According to a study commissioned by DAS provider Repeated Signal Solutions, 60 percent of respondents said they would not choose to live in an apartment that has poor cell phone reception; among those age 18 to 34, the number was 64 percent.

Moreover, an estimated 80 percent of residents of student housing will have smartphones by 2016, offering that multi-family sector as a prime market for DAS.

Recently, Repeated Signal Solutions installed DAS at The Lorenzo, near the University of Southern California. The added service, according to the company, enhances the property’s attraction as housing near USC. “Today’s consumer has a very low threshold for poor cell coverage and dropped calls, and it has a significant impact on where they choose to live, work or spend leisure time,” said Scott Groff, CEO of the technology provider.

See the original article in the February issue.