Wednesday, July 15, 2020
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Home DAS & In Building Wireless Can a Landlord provide great communications and make money from it too?

Can a Landlord provide great communications and make money from it too?

It’s been said for some time now that CRE owners need to add amenities to their property if they want to attract and retain tenants. The only problem is when CRE owners purchase products and services to please their tenants they don’t just add value—they’re also adding costs to their bottom line. The costs of supporting, maintaining and upgrading these amenities can negatively offset any value they bring to the property.

Norwalk, CT-based Aditum Internet Management Service helps CRE owners and property managers turn Internet into a true value add. The company is a hosted Internet management service for any multi-tenant environment where the landlord wants to resell Internet service to their tenants. Aditum’s unique service allows CRE owners to monetize a connection that third party providers typically offered in the past.

“We like to take the term ‘value add’ and mean it literally,” Aditum CEO Brian Higgins told Connected Real Estate Magazine. “We are adding value to the property. Internet is one of those few things that the landlord can offer as an actual value add amenity that is driving revenue into their pockets while also providing a high quality, highly desirable product to their tenants and residents that makes then happier to be in the space. It’s a unique positioning of a product because there aren’t many others that they can look at that can increase their cash flow, increase their property’s profitability and make the resident’s happier.”

How Aditum works

Aditum was initially an Internet Service Provider (ISP) and covered a large part of Indiana with broadband service. That initial ISP company was sold about 12 years ago and Higgins and his team took a lot of the concepts around how things were developed to support their subscribers and transitioned them into what’s known today as Aditum. The company is an ISP-type system that’s been scaled down to fit into buildings and businesses.

The company takes bulk Internet connection to properties, divides it into smaller pieces and manages it for all of the building’s tenants. All the CRE owner, or whoever is in charge, has to do in order to leverage the system is fill out a few online forms with tenants’ contact information, account information and the package they’ve subscribed to.

“The package is just like what you think of when you call up your cable company for Internet service and they sell you different speeds of service,” Higgins said. “They’ll give you two, three, four different speeds to pick from. This is no different.”

Packages are defined per property so that each one can have their own unique offering based on their needs, tenant demands and what the CRE owner wants to offer. Tenants are assigned one of the packages when they move into the building and have that particular amount of capacity to use out of the overall system.

“Just like any other ISP, the system is built upon a concept of oversubscription of your bulk capacity, but if properly managed, every tenant can get all the bandwidth they ever want to use on an ongoing basis,” Higgins said.

How CRE owners and landlords can monetize their Internet

Aditum’s system allows CRE owners to easily resell the Internet service the company bought in bulk—essentially turning property owners into an ISP. CRE owners purchase a small appliance and pay a low monthly service fee and through Aditum they gain a lot of the same capabilities that cable companies have for managing their tenants’ Internet connections.

“The age old economics—buy low sell high—it’s do different here,” Higgins said. “You buy the Internet cheap in bulk, you sell it retail to individuals. When doing so, there’s a profit margin. On average, a mid to large residential building will see anywhere from $10 to $30 of profit per door per month. You’re truly adding value to the property.

“We’ve seen estimated profit margins of buildings where based on the cost of that bulk Internet for the property, and all the other expenses, they typically run a 12-month return on investment. So whatever it costs to get a the system in, about a year later you’ve made the money back and for a common 140 to 160 unit building, you’re looking at around $70,000 a year in profit.”

Forget making tenants wait for the phone company or cable company to show up for an appointment

It would be easy for landlords to just let tenants figure out their Internet situation on their own when they move in. That would be a mistake however, according to Higgins. Tenants don’t want to just sign a lease—they want amenities, services, packages and things provided for them. The last thing tenants want is to move in somewhere and then spend days dealing with the cable, phone, gas and water companies.

“If you want to deal with all of those companies yourself, buy a house,” Higgins said. “If you want to move into a community and have a full residential experience in that property, you want the owner to offer those services. Frankly, any building owner that’s not going and pursuing these different amenities that are available for them to offer because they want to avoid possibly getting a phone call if something’s not working right is being short sighted because everybody’s going to be going that route sooner or later.”

Commercial real estate owners are also wise to include Internet of Things devices in their buildings, as they can enhance their tenants’ overall experience. Having such devices is only half the battle however, as IoT is only as good as what it connected to. Aditum helps CRE owners bring IoT to life by providing Internet services.

“We’re providing the Internet of Things,” Aditum Higgins said. “What the IoT world usually misses is it can put a million and one cool gadgets inside an apartment, but they all need to connect in order for them to do anything and what do they connect to? Every one of those systems needs Internet connectivity somewhere in the mix.”

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