We are excited to announce keynote speaker Robert Grosz, President at World Cinema for the upcoming Smart Spaces: Apartments, Hospitality, and Community Living conference! With over 25 years of experience, Robert is a visionary leader who is committed to driving value for institutional real estate owners and managers through innovative technology solutions that enhance customer experience and build long-lasting partnerships.
Ahead of the executive conference, he shares key insights below:
What is the state of broadband and connectivity today in the apartment and MDU space?
Connectivity is a mission critical tool to solve business problems. It’s not just phone calls, emails, and web surfing, it touches almost every aspect of our lives. As certain segments of the multifamily housing market evolve into an experience rather than just a roof over our heads, we believe that connectivity is a foundational element to curating and managing those human experiences.
So to describe the state of connectivity in the multifamily industry, we need to understand the categories of multifamily housing. We define the housing marketing into three segments: 1) home owners, 2) lifestyle renters, and 3) circumstance renters. Regardless of the segment, the demand for reliable, secure, and fast connectivity is equally important. But how it’s delivered and the consumer’s expectations may be different.
Home owners are typically less transient, more capable and insistent on creating and controlling their broadband network environment. They expect their mobile device to seamlessly work and be securely connected to the networks in their home, their workplace, and their local community. They are accustomed to using enterprise Wi-Fi networks in a professional office environment, but more insistent on using their own network, with their own identity and perception of private network experience in their homes. For these reasons, they are willing to pay over $100 per month for a cellular plan, plus $80 per month or more for a home Internet plan.
Lifestyle renters are focused on convenience, ease of use, ubiquitous community-wide coverage including common area amenity spaces. They have less loyalty to a specific brand in exchange for freedom of choice and ability to migrate to “the ultimate” experience. They have the same demands as home-owners, but they may be a bit more focused on the total package costs and especially sensitive to not committing to any one provider of services. They choose to rent from a specific community because they desire ease of life, not worrying about maintenance and repair of their homes, or the appliances or utilities in their homes (including the network). Bulk Enterprise Wi-Fi networks billed as an amenity works for 80% of these lifestyle renters, but alternatives should be available if you’re driving maximum economic occupancy.
Circumstance renters have as much demand for the utility of quality broadband, but they are the most price sensitive. It must be good, reliable and fast, but the cheaper the better. Enterprise Wi-Fi can provide the least cost, highest quality broadband experience to the circumstance renter.
Regardless of the type of renter, broadband is more important than ever. It has become as important as water, electricity, and climate control. As a community owner or stakeholder, choosing the right broadband strategy is mission critical to maintaining a property’s value.
How is the role of broadband evolving within the MDU market?
Ten years ago, broadband was an important choice that community owners had to “maximize”. They cut marketing deals with local cable cos and telcos which paid revenue share or a spiff for individual residents to sign-up. Each provider would lease equipment (consumer premise equipment) to resident subscribers. The product mirrored a single family home consumer, except the “landlord” would have some influence over the resident’s choice in exchange for a economic spiff.
Today, property owners are taking control of the network and using wi-fi and networks to define their brand or their communities. They understand that being connected is central to their residents lives. It requires that property owner get smart about delivering multi-gigabit circuits to their communities, establishing robust core networks in their communities, and determine how or if they choose to monetize the wireless or wired experience. A revenue share or marketing spiff is not as attractive as it once was, and in some circumstances it no longer fits into a regulatory framework.
A network connection might be powered by fiber optics, but it’s consumed as a Wi-Fi product more and more offered as an amenity to living at the community (much like the Wi-Fi expectation in a quality hotel).
How impactful can tech be in a building environment? What is the role of the platform to deliver future services?
The technology that’s chosen for a property, both in terms of the end-user solutions and the underlying digital infrastructure, absolutely has a major impact. It’s going to make a difference in everything from your resident experience and whether people want to live at your property to how efficiently your operations function. With regard to infrastructure, fiber has a longer service life than other options – typically 20 years or more, instead of other options that need to be replaced every few years to keep up. It can be somewhat more expensive and disruptive to install than, for example, wireless broadband solutions, although the cost is coming down and solutions are becoming easier to install – but if you’re looking for a future-proof infrastructure to support coming technology developments, fiber is the way to go.
How are building managers incorporating these solutions as part of their offerings?
They’re finding ways to bring connectivity directly to residents, and there are various options available depending on the property. For new construction and even in some existing buildings, they might bring fiber directly to individual units and offer WiFi in common areas. In existing properties where fiber isn’t an easy option, they might use technology to upgrade the capacity of their existing coaxial cabling infrastructure, or offer wireless backhaul such as WiFi or the new Citizens Band Radio Service (CBRS) throughout the property, including in individual units. Any of those options will allow owners and managers to improve broadband service for their residents.
Who are the decision makers? – multifamily diff than commercial?
For most properties, owners will make the final decision, but they’ll often gather input from other stakeholders such as managers, who have a good sense of how new technologies can drive improvements in efficiency. The IT staff will understand implementation and how to integrate solutions with existing technology. There may be a board or association of residents to provide input, so that would be different from a typical commercial installation.
What are the top use cases for prop tech in apartments?
The traditional use cases involve basic communications – support for things like phones and security systems, as well as front and back office functions. We’re now seeing residents expecting more in terms of technology to support things like remote work and streaming entertainment. Increasingly we’re seeing technology being used for smart solutions – from the owner and manager perspective, everything from smart thermostats and lighting to workforce automation and maintenance and logistics functions for greater efficiency, and for residents, greater personalization and easy access, potentially even voice-controlled solutions. Having a smart apartment can be a big draw for residents who want their environment to reflect their preferences without a lot of fuss.
What are the leading barriers to adoption of technology among MDUs?
Cost and concerns about ROI are always issues when properties are considering implementing new technologies. The actual installation may in some cases be a barrier – not all properties have the option to install fiber throughout, for example. But there are options available to address these concerns. Wireless broadband can be installed where fiber is physically not an option. Technology is available to upgrade the performance of existing infrastructure. And we’ve seen that installing new technology for connectivity and smart solutions has a really good ROI.
What is the resident wants vs. concerns in this market?
Modern life – work, shopping, healthcare, banking, and more – depends on good broadband access, and recent surveys have shown that large percentages of residents are interested in having broadband bundled in with their rent or condo fees, and they’re increasingly valuing those options post-COVID. The biggest concerns for residents, other than cost, are security and privacy –owners and managers need to be sure that they’re protecting residents’ personal information. Also, because of those same concerns, many residents will want to use their own devices for some smart functions – nearly half of MDU residents report using at least one smart device – so networks need to be designed to accommodate all of those devices while maintaining a high level of performance.
What is the most important value proposition of smart apartments for MDUs property owners and building managers?
There are really two major value propositions here. First, the implementation of smart technologies in MDUs and other residential properties can enable improved efficiencies and lower costs, with expected OPEX savings between 10-20%. But perhaps the bigger proposition is that implementing smart technologies can increase ongoing revenue. Even several years ago, studies were showing that fiber connectivity increases average net income per unit and the market value of rental units and condos, and newer data shows that smart devices can increase rents by between 10-30%. More residents are expecting in-unit connectivity and smart options, so not offering them can decrease your occupancy rate, while adding these technologies is likely to improve your bottom line, not only by making your property more attractive to new residents, but also by enabling you to increase rents.
Which aspect of smart apartment implementation creates the most challenges for MDUs?
The most challenging aspect is often determining the best options for your specific property. There are a lot of factors, including the age and layout of the property, what materials were used in construction, the available budget, what existing solutions need to be integrated, and more. There are so many types of solutions out there, and just guessing at which ones might work for your property isn’t likely to give you the best results. If you’re looking at smart technologies for cost savings and increased revenues, it’s important to work with an expert who can help you figure out exactly what you need for the best ROI and integrate your technologies for the best performance.
