Engineering A Technologically
Superior Building

Technology can dramatically increase business and market share if you understand how to use it effectively.

Technology can dramatically increase business and market share if you understand how to use it effectively. By "technology", we mean more than merely running a fiber optic loop throughout the structure. Anyone, in fact, can do that.

But, then what? What is the strategic plan that will encourage tenants to pay higher rent, sign for longer terms, or even remain in your buildings in the future.

Strategic infrastructure, over the past two decades has been most concerned with physical transport of employees, goods and services. Buildings that have thrived have been those with sufficient parking, adequate security, access to public transportation and roads, well designed elevators and lobbies. More recently, there was added emphasis towards the cost-effective delivery of electrical services and control of other environmental aspects.

Now, at the dawn of the twenty-first century, the paradigm has shifted from physical transport to intellectual transport. Tenants are becoming more empowered with the power of modern electronic technology and how to deploy it. They will become more educated, more sophisticated and more demanding, and that curve will increase dramatically in the next few years.

For you, the factors relating to the creation of a technologically superior building include:

1. Meeting both current and future needs of tenants.
2. Providing a rapid ROI.
3. Creating significant real property value for the owners.
4. Forging a strategic partnership to:

• Protect against obsolescence.
• Provide an adequate means for disaster recovery.
• Ongoing technical expertise and staffing.

To summarize these written, we see the growth of the intellectual transport market via electronic means consistent with and parallel to the availability of new electronic services. Think of how overnight express went from being unattainable to being mission critical just by becoming more readily available to the business world.

We know that fax literally replaced telex and the internet has replaced a substantial amount of mail. But there are other examples of products and services becoming ubiquitous just by being offered, such as Post-It Notes, for instance. Now it is communications that will change.

Due to recent changes in federal and state communications transport deregulation, traditional Incumbent Local Exchange Carriers (ILECs) no longer will be providing local service. Instead, they will be obliged to sell through a new class of carrier called Competitive Local Exchange Carriers (CLECs). This is similar to what is occurring in the deregulation of electric utilities, only it’s happening faster and it is allowing some building owners to assume that distribution role themselves.

Moreover, there is the very rapid advancement in the ability to provide full quality telephone service over the internet in addition to the traditional voice network, resulting in the ability to provide international calls with savings that approach 90%. Calls over internet (IP) facilities, also, are six times more efficient. This means, for instance, that an internet T-1 circuit can carry 144 high quality calls on the same T-1 circuit, at the same time, whereas a traditional voice-grade T-1 circuit can carry only 24 such conversations.

Understanding how to benefit from regulatory changes and how to merge them with rapid technology advances, makes for greater purchasing efficiency, greater cost effectiveness and significantly greater marketing competitiveness.

But, this is a double-edged sword. For those who are quick to seize opportunity, this is the chance to expand their rental revenue base. On the other hand, failure to act could put your building at a significant disadvantage when others take the lead.

As we see it, some of the tenant requirements that can now be provided, at a profit, by Class A building owners include:

1. Unlimited, reliable broadband access and availability to current and future technology.
2. Lower competitive communications costs.
3. International phone calls almost for the price of domestic calls using internet connectivity.
4. International fax, also at domestic rates.
5. Email messages converted to voice for remote access from cell phones and pay phones.
6. Voice messages that are converted to text and forwarded to e-mail.
7. All messages available to all valid recipients, anytime, anywhere, via Internet.
8. Off-site data backup and disaster recovery plans.
9. Full motion video at desktop, tenant conference rooms and building theaters.
10. Virtual office abilities to link with employees at home or on the road.
11. Scalable unlimited interoperability with customers, employees, suppliers and sales prospects.
12. Live, virtual interoperable integration of telephones with tenants websites.

There are many issues that could bog down this preliminary discussion, including use of various broadband circuits (T-1, DS-3, etc,), comparisons of back-bone carriers, billing issues, remote access service additives, service ability, and the like. These are issues that will be resolved as we move forward together.

We have on staff, and available for this relationship, licensed electrical engineers, civil engineers, Cisco certified specialists, Microsoft certified systems engineers (MCSE).

We have been in telecommunications and data services business for more than a quarter century. We have the stability, the quality assurance and the creativity to be your best strategic partner.

We have designed individual buildings and large enterprises that have replaced local telephone carriers, such as a 12 story office building on West 21st Street in NYC, the new Orleans Convention Center, the Pan Am Reservation Center (the large one back in 1984), and the world’s largest music CD distribution center (shipping over $1 million per day from Irvine CA).

There are a host of issues and factors that weigh into the construction and management of a modern Class A office environment. Primarily, we consider needs of the tenant, the value to the tenant of your meeting those needs, and the profitability to you, the building owner, in meeting those needs.

Telephone and data transport requirements will multiply by a factor of 50 within the next two to three years. This is not idle speculation, but reasoned conclusions borne out by research from such firms as Gartner Group and Meta Group. Note, for instance, that the internet had less than 5% business use five years ago. Today more than 95% of business has some involvement and total use of the internet is doubling every 100 days.

We believe that, by thoughtful preparation, we can provide the capacity to meet these projected needs and establish a building standard that others will aspire to. That’s nice, as far as it goes, but the real key is the ability to add value to the real estate that generates revenue, not just to cover costs, but to earn additional profits while improving marketability of the property.

We believe, at this preliminary stage, that, together, we can add $10 to $15 per square foot in net building value, much like parking availability and other real property amenities add value.

We estimate the initial cost of such added value will cost only about $1 per square foot to the project and will result in revenue generation of between $4 and $9 per square foot, per year. From increased tenant billings This means that the ROI occurs in a matter of months, while the value created lasts for decades. As part of our project engineering, we will perform an implementation survey to confirm and refine these estimates.

A preliminary estimate of costs (based on our not seeing any drawings, thus far), are:

1. $50 to $100k to fiber optic cable the building for current and estimated future requirements.
2. $50 to $100k to install central office grade hubs and routers throughout.
3. $100 to $150k to install telephone and internet server hardware capable of serving approximately 2,000 office workers.
4. $50k to install a real-time service failure transfer and disaster recovery system.
5. $50k to install a telephone/internet service provider grade billing and management system.

Resulting recurring, billable revenues will convert these amenity costs to a profit center investment. Consider that the average office employee requires a telephone, a portion of telephone switching infrastructure, a data network connection, and significant other communications transport overhead. Assuming an average of 50 square feet per employee, A typical tenant’s budgeted costs often exceed:

1. The initial one-time cost of $4 to $8 per square foot for telephone system and data infrastructure (exclusive of computer hardware and software).
2. Recurring cost of between $3 per square foot and $6 per square foot, per year, providing telephone lines, local and long distance phone calls, e-mail and internet access.
3. Estimated future recurring costs of $1 to $3 per square foot for ancillary services that include greater internet access requirements, video conferencing, streaming audio and video to desktops, etc.

Thus, current requirements cost tenants between $4 and $9 per square foot, per year, without adding all the new requirements that they will need in the coming few years. We believe that, unless the building owner comes to the tenant’s aid, these costs to the tenant will triple.

By our providing these services, however, the tenant will be able to grow into new technology at reasonable rates and the building will be able to recover this business which is now passed, uncontested to others.

The business model we see here contributes less overhead to external marketing and relies more on being able to provide significant cost advantages within a very tight geographical ring. Consider the possibility of providing every communications service at 1/2 the cost to the tenant, while generating an operating profit of 20% to the profit center.

We will perform an implementation survey in order to engineer the complete design and installation of a state-of-the-art "smart building" that will provide all of the major technical features that would be useful and desirable to your Class A tenants and would be useful and cost effective for you.

This would include:

1. A complete analysis and recommendation of state-of-the-art telecommunications and data transport to take advantage of recent regulatory changes and technical advances.
2. A recommendation for implementing your state-of-the-art strategy within the bounds of good business judgment.
3. A discussion and listing of the infrastructure required to completely outfit a technologically superior building, including design, equipment, logistics and staffing.
4. A plan to implement a state-of-the-art strategy regarding the design and implementation of smart electrical wiring and consumption.
5. A plan for crisis intervention and disaster recovery.
6. A program for billing, collections and record keeping.
7. A plan for staffing and training.

These guides are available at no cost. Call 203-323-6070, or e-mail to: team@phoneguru.com.