What Tenants Really Want
- Apr 04, 2017
By Leah Etling
Commercial buildings have historically attracted tenants with a variety of amenities—things like onsite parking, rooftop gardens, elite-quality fitness centers, and top notch security services. WiredScore CEO and founder Arie Barendrecht feels property owners can throw most of those out the window at this point, and just worry about what tenants really want: access to robust, reliable internet and the capability to create a powerful business technology network.
“We’ve learned that building amenities do not matter to tenants if fundamental connectivity infrastructure is not in place,” said Barendrecht, who founded WiredScore in 2013. Wired Certification, a distinction that identifies and certifies buildings with the most reliable internet connections, has been endorsed by New York City and The Mayor of London as a reliable standard for commercial tenants. There are four tiers of Wired Certification: Platinum, Gold, Silver and Certified.
More than 750 U.S. commercial buildings in nearly 80 U.S. cities and 222 in the United Kingdom, primarily in and around London, are now Wired Certified. Following recent expansion to France, growth to Germany and Ireland is coming this year.
We talked to Barendrecht about his company’s progress and what building owners can do to make their properties more connected.
CPE: You have now certified nearly 1000 buildings worldwide. What have you learned?
Barendrecht: Number one is the increasing priority that is being placed on connectivity above other amenities when businesses are looking for office space. This is supported by macro trends about the way that we work, like accessing the cloud and mobile work. This is underpinned by connectivity and that’s changing the things that people prioritize when they look for office space. We hear that a lot from building owners. They say that five or 10 years ago, this was never really a question that they were hearing consistently from tenants. Due to changes in the way people are working, connectivity is now becoming more important than access to transportation, views, fitness centers or cafés that ownership would have previously invested in for their building.
CPE: The WiredScore advisory committee includes an impressive array of real estate industry professionals. What are they working on?
Barendrecht: The goal of the WiredScore Connectivity Advisory Committee, which we are thrilled to have in place, is to provide strategic counsel and industry expertise as we look to evolve Wired Certification and other services for building owners. The best example is our most recent milestone, the launch of our new Wired Certification Guidelines for Commercial Developments and Redevelopments. Over the last year we worked internally and with our advisory committee to develop a set of guidelines, which provide design specifications for new buildings or buildings being redeveloped to provide “future-proofed,” best in class telecommunications.
CPE: Why are those guidelines so important?
Barendrecht: There has never been a set of guidelines like this in the marketplace, which is why we see a lot of variability in the way things are designed for connectivity. It answers a question that we get from developers all the time, which is: ‘WiredScore, we’re working on a new development, but it will be three-four years between design and occupancy, how can we ensure that we design and construct our future building so that it’s future proofed for a tenant moving in in 2020 or 2021?’ The guidelines we put together and launched publicly for the architecture and engineering community to leverage. They are a road map for creating the future-proofed building.
CPE: Where are those available?
Barendrecht: You can download them from our website at wiredscore.com. They are meant to be a practical set of best practices that any architect should include when designing commercial space to meet future tenant technology expectations.
CPE: Are you tracking the correlation between Wired Certified buildings and the rents they can charge?
Barendrecht: We know from talking to our clients that Wired Certification often results in the ability to charge increased rents. An example is a case study we did on a building called “The Plant” which is on 44th Street here in Manhattan.
They did a big investment into improving their digital infrastructure, obtained Wired Certified Platinum status, and could raise rents from around $34/SF to the low $50/SF over the course of two and a half years. This was largely attributed to the investment that they made in Wired Certification.
CPE: How else has Wired Certification improved the commercial property leasing experience?
Barendrecht: Another ROI piece is the ability to close the deal and sign leases more quickly. There is generally a step before a tenant signs a lease when the CTO or head of network engineering needs to go do their own due diligence on the building and conduct an IT evaluation on their own. We are doing that on behalf of the tenant—we’ve already inspected and evaluated the building—it removes a step that can take one or multiple weeks. A client recently told me that if they could just get a lease signed one day earlier, it would pay for the entire cost of Wired Certification.