Bundles of Joy

By Jeffrey Steele, Contributing Editor

How important are advanced telecom services to today’s apartment residents?

A recent survey by J. Turner Research offers intriguing insight into that question. The survey was distributed to 38,679 residents at 330 rental communities nationwide and drew 8,356 responses—a 22 percent response rate.

Some 96 percent of respondents indicated they had cell phones in their apartments, and 87 percent reported their mobile was their primary phone. More than one-third—35 percent—indicated it was “very likely” unsatisfactory cell phone reception would impact their renewal. Another 35 percent indicated that it was “likely.”

Based on this insight, it’s not surprising to learn many of today’s young renters are turning on their cell phones while touring prospective properties as a litmus test to see how many bars of coverage they receive, and therefore, how good their Internet reception might be over their smartphones.

“If they don’t have the coverage and connectivity to the Internet, the other amenities of the property aren’t going to compensate,” says Mike Bickford, president of Greenville, S.C.-based 3G Solutions.

Clearly, great telecom is a priority for renters, and telecom providers know it. Anne Manfredi, founder and president of Larkspur, Cal.-based RealtyCom Partners—a leading multifamily industry telecommunications consultant, reports the state of telecom product bundling is at an important juncture.

Now that providers are well-established, they’re stretching their legs a bit and “providing more services to push down that pipe,” Manfredi says. “What we’re trying to do is scope out what’s coming down that pipeline and find out how best to bundle them for different properties and different resident demographics.”

Beyond standard voice, high-speed Internet and video, lifestyle amenity management can be a key additional option. Home monitoring and control, security and concierge services all fall under that umbrella. And some of those services are likely to interest property managers as much or more than residents.

For example, Comcast recently launched its Xfinity Home product in California, which includes features like window monitoring, carbon monoxide monitoring and a view of your unit from anywhere you can gain Internet access, says Jeff Farr, residential sales director for Comcast’s California region.

In addition to providing peace of mind for renters, it can also help make residents eligible for discounts on renters insurance, Farr says.

In the context of an apartment building, monitoring is likely to be valued more highly by property management than by renters, Manfredi says.

Why is this? Manfredi recalls a case in which painters turned up thermostats in empty apartments in which they worked. Once they left, heat remained on at full blast for a week in the empty units.

Another new service likely to be as well received by managers as residents is Comcast’s recent addition of Skype, Manfredi says.

Also impacting telecom bundling is the issue of choice. Many properties are including different providers on site, reasoning they don’t want to risk losing prospective residents by failing to offer their preferred providers. In a perfect world, residents would be able to access “cafeteria-style telecom,” and property management would not be much involved in this choice, says Manfredi.

“In new communities, you can put in all kinds of services, but in existing buildings there’s one coax,” she says. “Sometimes, owners in their quest to provide all those services aren’t looking at the challenges of providing them.”

The complexities of telecom make it difficult for property managers to do more than accept providers’ pitches at face value, she adds. “Most of these contracts are for 10 years, so they’re making a decision over a long time frame,” Manfredi says. “People don’t quite have enough information. These products have great spins. They’re in the entertainment business; their pitches are sexy.”

Property management can seek help from consultants. However, many firms passing as consultants actually represent the telecoms, Manfredi adds, noting her company by contrast represents owners, removes the hype and puts all pertinent information on the table for objective consideration.

Bundling cell phone, Wi-Fi

The bundling of cell phone reception and Wi‑Fi in apartment communities is yet another notable trend impacting multifamily.

As more residents work from home and use iPads and other tablet devices in their apartments, cell phone reception and wireless Internet become amenities important enough to make or break a lease deal.

Changes in technology are driving this evolution, says Bickford, whose 3G Solutions is a national rooftop antenna marketing and management company. Old cell phone technology required very high buildings and antennas spaced far apart. By contrast, 4G technology calls for antennas on four- or five-story buildings, and spaced relatively close together.

By placing providers’ antennas on their rooftops, properties assure themselves of greater speed and coverage for staff and residents.

In addition, in return for agreeing to have antennas installed on their roofs, they can reap ancillary monthly income of perhaps $2,000 a month for 30 years.

“There are no expenses associated with it. The antennas stay on the roof for a long, long time, and it can be a significant source of income, as well as added value at the time the property is sold,” Bickford says.

Properties can arrange for a revenue stream or a one-time lump sum payment, which can be used for repair, maintenance or to add other amenities.

One-time payments, provided by California company Landmark Dividend, can be in the very high six-figure range. “More and more property management companies are taking the lump sum,” Bickford says.

What’s next?

Telecoms continue to strive to provide more to multifamily. “Comcast is working on advanced technologies with MIT,” Farr says. “Our new MDU Wi-Fi product is something we’re going to be rolling out in the next few months, and that’s going to be very exciting to property owners. It’s going to be extremely powerful—in terms of attraction of prospects and retention of residents.”

Manfredi adds, “The idea of having your wireless device bundled in is going to be the next game changer. Your wireless device allows you to take that service outside the unit, and that’s a fundamental change.”