Real estate professionals know that the hot properties are, and will be, those with not only T1 lines, but also larger, faster T3s, T45s and other technologies most lay people are not yet familiar with.
Get wired
Internet connectivity is key factor in viability of business properties
Office space used to be simple. A suite had four walls, carpet and/or tile floor, standard doors, basic light fixtures and electrical outlets, a few telephone hook-ups, and some parking places.
Today, however, there is a wide spectrum of office designs. And buildings are categorized and subcategorized as class A, B, C, urban, suburban, and so on.
The wants and needs of today’s occupants also have grown beyond anything standard or simple. Their worlds are changing as fast as you can say, "Who Moved My Cheese?," with technology and the pace of change having a significant impact on their use of commercial real estate.
The driving force behind much of this change is the Internet. A technological revolution is under way, as monumental as the introduction of the automobile and the telephone. Tenants and owner occupants want and need much more technology to succeed in business today. Office buildings must have higher electrical capabilities, including more amperage and better outlet placement, not to mention things like surge protection, grounding, and connections to communications systems.
In fact, the greatest trend in design and use is connectivity to the Internet, with data and communications systems becoming tightly entwined. Telecommunication companies are installing T1 lines, and several competing companies are selling ISDN and shared T1s. Buildings have connections on rooftops, in basements, in closets and in places that were previously unused or underutilized.
So the office space that used to bring in only rent and operating expenses is now generating income and expenses throughout the entire building, inside and out.
In short, occupants need to connect their employees to the Internet as well as their homes and other remote locations. They need innovative lighting, improved ergonomics and flexible layouts for their ever-changing employee and systems needs. And although we thought we would do away with paper with the coming of the computer age, there are still stacks upon stacks of documents that require accessible storage.
All of this translates to increased costs for owners and occupants. It also separates buildings according to those that are technological players, those that are not and those that are catching up. Still, some tenants don’t consider this criteria when choosing office space; they don’t believe that the Internet will affect their businesses or they want just enough technology to get by.
Small business executives who ignore the Internet’s influence on the trends of office design and use are in for a rude awakening. Real estate professionals know that the hot properties are, and will be, those with not only T1 lines, but also larger, faster T3s, T45s and other technologies most lay people are not yet familiar with.
So if you want your work space to work for you, watch the trends driven by the Internet. Your employees, particularly those from "Generation X" and "Y", are expecting you to provide the best connectivity with your computer systems and telecommunications. In fact, their idea of substandard working conditions is having to wait more than a minute to download a file.
As an owner, you may find such capital decisions to be difficult, expensive and quickly outmoded.
Some support and telecommunications providers are already filing bankruptcy in the wake of the recent dot.com shakeout. Nevertheless, stay the course. Investigate technology purchases as carefully as you would shop for a car or house. Your capital is precious, and you want to use it wisely. Use it to forge ahead. Technology has made business a whole new ballgame, and investing in technology – whether as a property owner or tenant – makes you a player.
Failing to accept technology takes you out of the game. Outdated office space leads to increased employee turnover, possible loss of clients and a general negative image of being "old fashioned" in the new age.
Fortunately, we are seeing more owners and tenants stepping up to the plate and batting in the technology ballgame. New buildings are designed to handle the demands of today and old ones are adding the necessary equipment and electronic capabilities in every major market.
If you own your own building, it’s time to take another look at your plan for its use and design, or redesign. It can be expensive and you will make mistakes. It is part of the inherent risk of the technological change in the use of buildings.
However, there is also a risk in doing nothing. Think back on the profound changes of previous eras. For example, consider the nation’s widespread change from an agricultural to an industrial economy, when railroads represented the latest technology. Some businesses evolved, others put their heads in the sand. Some lost. Some won. Much later, in the 1970s, longshoremen put their heads in the sand and assumed that the introduction of new containers and processes wouldn’t affect their jobs. But when that technology reduced the number of men needed to unload a ship dropped from 38 to just four, most longshoremen had to change careers. A final example can be found in the manufacturing industry – new "just-in-time" processes brought an end to the old just-in-case way of overstocking and keeping expensive inventory on hand.
Can you imagine the world today without technology, not to mention the teaming, participation and collaboration it requires? People will change; business will change. You must decide if you want to be a part of the change, or apart from it.
David L. Kliber is president and chief operating officer of Polacheck Property Management Corp. in Milwaukee, part of the Polacheck group of companies.
