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Location still rules for real estate, but today's owners and developers want bandwidth in their buildings. They are trying to satisfy soaring tenant demand for increasingly sophisticated electronics and telecom installations. By Jennifer Caplan
The exploding demand for bandwidth, a driving force of the New Economy,is transforming the sector of the Old Economy that is most literally "bricks-and-mortar": real estate. High-speed Internet ac- A cess now ranks as a top priority for new office space. For cybersavvy landlords and developers, the old adage "location, location, location" has been replaced by "bandwidth, location, bandwidth."
Broadband, which allows transmission speeds in excess of 500 kilobytes per second, is delivered through cable, enhanced telephone wires, and wireless technology and allows its users to communicate over high-speed, high-quality digital channels. It also provides access to a variety of media, including voice, fax, video, high-definition TV, and wide-area computer networking.According to Morgan Stanley Dean Witter, there are currently 5.3 million users of high-speed connectivity technologies in the United States, and that number is expected to grow to 44.3 million by 2005. The much slower dial-up services, with 38.8 million users, will decline to 36.4 million by 2005. Office space makes up the greatest part of the demand for high-speed connectivity. Estimates that only 10,000 of the 750,000 multiple-tenant office buildings in the United States are wired for broadband point out the distance remaining to meet that demand.
Only a few years ago the real estate industry feared that "virtual offices" would replace bricks-and-mortar office space as employees telecommuted via e-mail and the Internet. Instead, technology has ignited the office market. Silicon Valley, the country's tech center, is one of the tightest, most expensive markets in the country, and similar markets are springing up.To capture these markets, commercial realtors are of fering customers sophisticated work environments, not just the workspace, and that means telecommunications access that is as easy as plugging into a wall.
Wired office buildings provide advantages to both tenants and landlords. For the tenant, leasing a tech-ready space is faster, more efficient and more cost-effective than doing it themselves. From the landlord's perspective, there's a competitive advantage-especially while...