Written by Steve Lefkovits
In the future (according to “futurists”), we will be served by myriad robotic helpers orchestrating every aspect of our busy lives while we catch up on GOT and other bingeable shows. Seriously, if you listen to trendsetters like Fast Future’s Rohit Talwar, who developed various industry projections with China-based telecommunications company Huawei, there’s no doubt that 5G is the digital future. From entertainment to driverless cars, education and science, 5G, which is 10 times faster than current 4G LTE, is expected to expand the lifestyle capabilities of every home, workplace and community.
Back to the Future?
The four major telecommunications companies operating in the U.S. – AT&T, Verizon, T-Mobile and Sprint – have plans to roll out 5G in urban areas. Deployments are expected to take place in select cities with commercial building applications up to three years out, with early launches in large areas (like stadiums).
But if you’re getting that “déjà vu all over again” feeling, you’re not wrong. In fact, owners whose memories stretch all the way to 1995 will recall the giddy, wild west atmosphere surrounding “blazing fast 1 MB Internet.” History reminds us that the transition from 3G to 4G presented a lot of costs with limited direct revenue opportunity for a few lucky properties that could host cell sites. Other developers were forced to install DAS (distributed antenna systems) in mid-rise and high-rise buildings.
With each new iteration of digital progress, you may well wonder about the true benefit to your bottom line. Even so, only one device – the iPhone 11 – currently has dual chips that can accommodate 5G. So there’s still time to weigh the pros and cons and make a reasoned decision.
Why It’s So Complicated
One reason that 5G is faster is it requires a much larger investment in signal antennas – some say one every thousand square feet. Which makes law makers leery of the municipal challenges. As Senator Dianne Feinstein (D-CA) observed earlier this year, “The new 5G network will need new antennas to work, adding to the network of antennas our current cell technology already uses. This means we’re well on our way to a dangerous situation in which cities are clogged with 5G antennas on public infrastructure, all with little input from cities themselves.”
But for the multi-family housing operator with roof space to spare, 5G networks sound like a great opportunity for passive income. In fact, one cell tower provider, American Tower, predicts that in urban areas, macro sites (like the rooftops of multi-story buildings), are expected to be “the core of wireless networks.”
The New Speed of Property Management
Industry experts have warned that 10 years of unprecedented growth in the multi-family housing sector does not make the case for complaisance. In fact, rental paradigms are already shifting to accommodate those Millennials who present as digital nomads, using Short Term Rentals (STRs), self-service leasing, and want to interact through apps and smart building tech. Technology has also stepped up with a battery of products to accelerate the lease up process and expedite other aspects of property management, such as payments, security access and other community services.
Tech answers, however, will only run at the speed of bandwidth.
As a multi-family housing operator, “community” should always top-of-mind. Quality high-speed internet is consistently ranked as the most important amenity. 5G is one more way to deliver gigabit internet, and residents with 5G handsets will value being able to get the speeds they were promised. Offering access to their wants, even if you are in the position of capitalizing on it, can earn you good will – and good ratings.
Speeding the minutiae of your leasing and property management work is also a priority, as the multi-family industry joins in the technical fruits of machine learning and automated tasks. With app – and Alexa guided tours now available – and AR/VR tours in the offing. If you envision a future with security bots, holographic leasing and self-automated driving on your property, you should definitely be assessing your individual need for 5G right now before this window of opportunity closes. One can never have too much streaming potential.
Too Early to Tell?
The speed of 5G technology is sure to open up whole new worlds of unprecedented use. How it will fit into the world of multi-family housing is the question. Keep in mind:
- Not every community is getting 5G right away, and fewer than those will appreciate it. San Francisco, New York and tech incubators like Pittsburgh and Austin will be early adopters; property owners in high-tech areas should waste no time.
- Read prior contracts carefully. In some cases, existing towers are likely to be converted to 5G. If the lease refers to the tower itself and not the technology upgrade or the provider, the changeover will not bring an income opportunity.
- If the community is a mixed-use development, there may be an opportunity for the property to form an advantageous partnership with a business entity – particularly if the partner needs a lot of bandwidth.
- The consumer case is not the business case. In a tech-savvy area like San Francisco, residents may buy 5G phones and 5G wireless routers for their units without any help from you. Sure, they’d appreciate your help, but history has shown us that trying to anticipate a particular consumer technology is more often than not a costly error.
- Flex rentals and other STR options depend mightily on IoT solutions to manage rental, services and energy flow. The more you depend on STR for your income, the more bandwidth provision is needed.
Let RealtyCom Help
5G is a technology, not a strategy or a cure-all. 5G infrastructure installations may produce new income, while 5G for residents may incur new capital expenditures. As you contemplate 5G, please keep in mind that RealtyCom has negotiated thousands of marketing and service agreements that have produced hundreds of millions in financial incentives from broadband. Our clients continue to utilize RealtyCom Partners to assist and advise on technology and other telecom related matters.