How a Riser Management Company Might Hurt Commercial Landlords
The frenzy to wire buildings during the Gold Rush of the Dot Com era, resulted in many commercial office buildings having conduit full of cabling and telco rooms full of equipment that couldn't actually be used. The roll call of dead telecom carriers left this graveyard of gear as a symbol of their excess spending. As a result, riser management companies offered a seemingly attractive arrangement for commercial real estate landlords to untangle the mess. But, I think these managed service agreements, are just another example of landlords falling victim to sometimes unseen risks and unanticipated costs.
As a commercial landlord, your top priority is maintaining a safe, productive space for your business tenants. A poorly maintained cabling infrastructure can create the risks of physical hazards, such as fires, and threaten the constant data connectivity your clients need. It makes sense to maintain clean cabling and modern hardware in your building’s telecom risers.
However, giving a riser management company a monopoly on this service can hurt your tenants or even cause high-quality prospective tenants to lease from a competitor.
Before you sign a managed services agreement with a riser management provider, understand how these vendors can impact your tenants. Make sure to consider the short and long-term impacts using this kind of service could have on your reputation and profitability.
Some Reasons Not to Work with a Riser Management Company
As a commercial landlord, your primary goals are to maintain a space which attracts the best possible business tenants and minimize vacancies. “It's all about making tenants happier, making buildings stickier" and lowering turnover, said real estate expert Zach Aaron.
Differentiating your commercial properties with the latest amenities and features, including a high-quality telecommunications infrastructure, could appear to be one way to reach your goals. While a riser management company may seem like an appealing offer, it could have the opposite impact on your profits and reputation.
It May Impact Tenant Satisfaction
Riser management companies promise a comprehensive range of services to update and maintain the entire telecommunications infrastructure of commercial properties, from the building’s point-of-entry to the client’s workspace. These services typically provide:
- A building-wide survey and, potentially, initial updates to the risers
- The design and execution of new tenant installations
- Maintenance and technical support for ongoing client needs
In addition to these cabling services, riser management companies generally work with one preferred vendor to deliver white-labeled internet and phone service to building clients. At face value, it can seem like a great arrangement. Landlords face no out-of-pocket costs, and clients have access to infrastructure support.
Unfortunately, tenants are left paying a considerable premium to work with the building riser management company. The costs of installing phone cabling to an office are typically ten times higher than the alternative of working directly with a connectivity vendor.
Riser management vendors charge new tenants $3,000 to $7,000 for an initial installation. But a typical installation with Atlantech Online, which involves connecting an office to the central telecommunications closet for fiber-optic internet connectivity is only $500.
While riser management is a relatively new industry, businesses are increasingly aware of the risks and costs of moving into a commercial space with a managed partnership. The decision to enter an agreement could cost your leasing team prospective tenants and lower new tenant satisfaction.
Your Risers May Not Be Better Maintained
Should you worry about the risks associated with your current riser infrastructure? Quite possibly.
Before telecommunications industry deregulation in 1996, risers were maintained by traditional phone services companies. Since deregulation, cabling in most commercial spaces is managed by tenants' chosen communications vendors. The quality of service and attention-to-detail of business communications providers can vary significantly. Commercial tenants who select cut-rate vendors could compromise the security, safety, or reliability of your infrastructure.
However, choosing a riser management company can also pose a business risk. As a property manager, you’re putting an immense amount of trust in a service which may not be qualified to maintain your cabling. While these providers promise to provide meticulous service, ongoing support, and expertise, they may not have the experience or staffing necessary to deliver on these guarantees.
You're potentially working with a vendor that compromises your cabling further, may be unresponsive to clients (reflecting on YOUR relationship with the tenant) or doesn't proactively monitor the infrastructure. With an agreement in place, your tenants won't be able to select the provider that meets their needs. If these risks are realized, it could have a sharp impact on tenant happiness, and in turn, your profitability.
Another Way To Solve For Riser Management Excellence
Today’s business tenants are more dependent than ever on high-speed business internet to communicate and collaborate. One recent survey estimates that a single hour of downtime can cost businesses $140,000 at the low end! Providing a high-quality, well-maintained infrastructure is a necessity for commercial property management.
Protecting the integrity of your telecommunications infrastructure in entirety means relying on knowledgeable service providers. The most effective way you can support your clients' need for affordable, high-speed Internet probably isn't with a riser management company.
Instead, serve your clients by developing a list of preferred business communications vendors with a track record of affordability, innovation, and excellent customer service. To get started developing your preferred vendor list, we recommend “Who’s the Best Enterprise Internet Provider? Reviewing the Top 5.”
Atlantech Online has been a leading provider of comprehensive telecommunications and business communications services in the greater Washington DC metro area since 1995. As an early entrant into providing business Internet services, Atlantech has established a reputation for expert service technicians, superior customer support, and exceptional service.
To learn more about Atlantech Online’s commitment to customer satisfaction and innovation, click here to read the “Montgomery College Case Study.”