26 August 2015

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Why Fiber Has More Impact on Real Estate Value than Physical Location

Fiber Connectivity by Tom Collins

Unless you’re running the kind of walk-in business that thrives on spontaneous, impulse-driven sales, the location of your property is less of a factor in determining real estate value than it once was. In an age when everyone walks around with the entire Internet in our pockets, “location, location, location” is quickly being trumped by connection quality when it comes to influencing tenant demand and therefore valuation.

For today’s forward-looking business facility landlords, cloud access is emerging as the key game changer. In fact, fiber connectivity has been found to increase the value of physical real estate by a few percentage points.

How Fiber Connectivity Increases the Value of Physical Property

A 2015 white paper by the Fiber to the Home Council Americas goes even further, citing data from the University of Colorado at Boulder. Apparently, not only does a fiber connection add an average of 3.1 percent to a property’s value, but valuations are increased by an additional 1.8 percent when comparing areas with connectivity speeds of 100Mb/s with those that support 1Gb/s or more.

In the age of the cloud-based business, older models of real estate appraisal just don’t apply anymore. What are the logical implications that made “location, location, location” so critical for the past several generations?

For starters, let’s consider how close the physical building is to public transportation, smooth driving, and easy parking. Traditionally, an office that is situated relatively far from major infrastructure and thoroughfares is going to be less attractive to tenants. By extension, if your building, dependent as it surely is on telecommunications at one level or another, has inadequate access to online services, then this too is a type of prerequisite accessibility.

As Harvard Business School Professor Robert Kaplan puts it, access to the Internet over fiber is quickly becoming more important than roads when it comes to property value and infrastructure.

This is hardly just an analogy. The data shows a high correlation between physical real estate and digital real estate. Of course, areas that are technological hubs are more likely to have access to gigabit Internet service. Surely other factors are at play here as well – locales with best-in-class Internet speeds are more likely to be successful economically for any number of reasons. It’s the old chicken and egg conundrum, but the holistic effect is indisputable.

Demand for Fiber Across the Board

As today’s business tech specifications become the standard across the country, local governments and community organizations are taking the initiative to work with private enterprises to implement their own fiber solutions and spur investment demand. In areas where not every building has the same speeds as the next, owners can differentiate themselves from the competition by offering direct fiber access.

The logistics involved with getting connected via fiber-optic telecommunications cable are surprisingly simple. The fiber cables themselves are brought into the building and are used to extend the conduits for connectivity that already exist in your building’s area. Alternatively, a new conduit is installed in the telecommunications room where the appropriate circuit lives – and from there, fiber or copper is used to bring the connectivity directly to individual employees’ or tenants’ office suites.

Moreover, when you use a fiber-specializing service provider, you can introduce fiber to your building without worry. Experienced experts have the skills to handle even the trickiest of feasibility assessments and implementation specifics. In some situations, extensive lengths of cable must be installed, connecting a building to the nearest viable conduit, but in other cases, property owners are surprised by how simple, cheap and straightforward it is to upgrade to fiber.

Installing Fiber Doesn't Have to Be Difficult

One common misconception we encounter is that bringing fiber connectivity to a building is intensive, expensive, and time-consuming. In some cases, this may be true, but most of the time our customers are surprised at how easy the installation was on them and their employees.

With other companies, it may be different, but with Atlantech, we do our best to shoulder the majority of the workload for installing fiber. We take care of everything, so our clients don't have to. There may be rare cases where this is an exception, but for the most part, once an install plan is approved, not much more is required from the customer.

You or your property manager can rest easy and go about your usual business while your structure’s digital real estate increases in value. That jump in connectivity, and therefore property valuation, should take anywhere from a single day to a few weeks, which is, in the context of your investment life cycle, truly the blink of an eye.

If you would like to talk to us today about what it would take to get fiber installed into your building, contact us. We'll show you why our customer support is valued so highly among all our customers.





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About the author:

Tom Collins (Twitter, LinkedIn) - is the Director of Enterprise Sales & Marketing for Atlantech Online. He has over 20 years of professional experience in the Internet Service Provider industry and is known for translating technology into positive results for business. A native of Washington, DC, a graduate from University of Maryland (degrees in Government & Politics and Secondary Education), Tom is also a five-time Ironman finisher.

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