Realty Times December 7, 1999

Will High-speed Connections Become the #1 Office Rental Space Perk?
by Lesley Hensell

Once upon a time, when a tenant moved into a new building, a monopolized communications market decided for them what phone and Internet access options they would have.

But now, telecommunications companies like Eureka Broadband Corporation are turning that notion on its head, fighting to take on all communications services in entire office buildings. According to Eureka, buildings that utilize their high-speed Internet access, enhanced data services and Application Service Provider capabilities eventually will have tenants competing for space.

Eureka has received first-round venture capital financing of $22 million from Spectrum Equity Investors and AT&T Ventures.

"Eureka Broadband has differentiated itself in the building-centric telecom market with its innovative approach, bundling content and applications with its broadband Internet services," said Brion Applegate, managing general partner of Spectrum Equity Investors said.

Commercial real estate owners form partnerships with Eureka to install a technologically advanced infrastructure in each building, providing tenants with a true broadband. Technology staff members provide on-site service in each of its wired buildings to develop business solutions and answer technology-related questions.

"It is our mission to become a determining factor in a tenant's choice of office space," said Jeff Ginsberg, chairman and CEO of Eureka Broadband. "Our real estate partners are rewarded with enhanced asset values driven by increased rents, improved tenant retention and the best broadband Internet experience, delivering a win-win situation for both landlords and tenants."

And it is easy to see how a quality building that offers such services could retain tenants longer. If a tenant wants to move to another building, he must go through the hassle of changing not only his landlord and locale, but also his data storage, Internet service and application structure.

"We are uniquely positioned within the ASP marketplace. In concert with the building owner, we give tenants the equipment and ultra-fast connection that enables them to easily access our servers or the Internet to run applications," said Bob Vanech, founder and president of Eureka Broadband. "Our partners' equity commitment demonstrates that our investors share in our vision of next-generation broadband content and applications."

Arden Realty Inc. (NYSE: ARI) is one of the first commercial landlords to pair up with Eureka. Arden has 253 buildings and over 18.5 million square feet of office space in Southern California

And speaking of differentiation, one residential realty firm has unveiling an extremely unusual strategy to bring in new customers.

Based in Alexandria, Va., McEnearney Associates, Inc. has developed a program that appeals to pet owners in their search for a new home. Dubbed the "PAWSitive Experience" program (no, I'm not making this up), the program includes a pet questionnaire with every buyer and seller package. And yes, pets are welcome to go along for the ride on showings.

Again, I am not making this up. The firm claims that dogs, parrots and an occasional cat have joined master and realtor in the search for a new home.

McEnearney says that more than a quarter of the sales it handles involve families with pets. And in a 1999 report prepared by pet retailer PetsMart, 68 percent of those surveyed said they consider pets members of the family and make life choices to accommodate them.

Now, I may sound like I'm poking fun at this program. But I must admit that I recently paid my builder $100 to install a pet door for my dog Drake. And a major consideration in buying was the size of the backyard - after all, Drake has to maintain a svelte look to impress the poodles.

And I may need a realtor with a program like this someday to help me unload a house with a hole framed into a brick wall. At least now I don't have to feel like I'm the only person out there who thinks their dog's opinion of a new house is almost as important as their spouse's opinion.

Goes to show - there's a business strategy out there to target every consumer. You just have to find it, implement it and manage it to profitability.

Also See:

  • Commercial Property Managers Need to Get Smart About Smart Buildings
  • Telecommunications Plus Tenants Equals New Commercial Initiative


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