How New Cellular Technology Will Impact Commercial Real Estate

by | Sep 8, 2021

You have probably heard references to 5G.  5G stands for the fifth generation of cellular technology.  When fully rolled out, 5G will be as much as 100 times faster than today’s 4G.  5G’s massive capacity will allow networks to accommodate more users at much higher speeds.  This will enable a so-called Internet of things where computers, smartphones, televisions, appliances, cars, etc. are connected to the Internet and thus to each other.  This massive capacity to transmit large amounts of data at lightning-fast speeds paves the way for new applications in autonomous vehicles, robotics, telemedicine, entertainment, and virtual reality, among others.

How New Cellular Technology Will Impact Commercial Real Estate:How New Cellular Technology Will Impact Commercial Real Estate

How Does 5G Differ from 4G?

5G technology uses a higher frequency band of the wireless spectrum.  This allows data to be transferred much more rapidly than the lower-frequency band dedicated to 4G.  The downside of 5G is that this higher-frequency band doesn’t travel as far.  The shorter wavelengths require smaller antennas attached to smaller cell towers spaced more closely together.  Although the existing network of large cell towers will still be used, 5G will require significantly more small cell towers attached to rooftops, light poles, and even inside buildings.  The United States will see hundreds of thousands of these small towers installed across the country over the next decade.

What does 5G Mean for Commercial Real Estate?

Benefits to Property Owners.

The rollout of 5G will create additional revenue streams for commercial property owners.  Given that 5G requires more antennas and boosters, property owners will be able to enter long-term leases for rooftop space with telecom providers.  These leases typically run from 10 to 30 years.

Property owners will benefit from instant monitoring of mechanical and electrical systems in their buildings which will enable quicker responses when problems occur.  In addition, because lights, HVAC thermostats and all other systems will be connected to the Internet and will be monitored and fine-tuned 24 hours a day, owners should realize substantial savings on operating expenses which could be passed on to tenants.

Related:  Tech Companies Relocations to Tampa Soar in 2021

Benefits to Tenants.

Tenants will enjoy a better user experience in buildings with 5G.  Online audio calls, video conferencing, cloud-based collaboration, and other activities that use a lot of data will become much faster.  This will make remote employees feel more connected to their offices.

Benefits to Investors and Developers.

More data centers will be needed because 5G and other new technologies require an enormous amount of computing power that takes up a lot of space on servers.  While much of the computing will be in the cloud, large data centers will still be needed to house those servers.  This will provide opportunities for data center developers and investors.

Timeline and Performance.

The US is currently in year 4 of what is expected to be a 10-year rollout of new infrastructure necessary to realize the full potential of 5G.  Studies by Deloitte have estimated that the initial 5G capacity in urban environments will be about double that of 4G LTE.  Whether an area ever achieves 100 times the speed of 4G will depend on a variety of location-specific variables including the number of cell towers and the density of users.

At Mobiliti CRE we focus 100% on representing tenants with site selection, office relocations, expansions, contractions, and subleases throughout Tampa Bay and the entire West Coast of Florida.  We also assist businesses that are looking to purchase office, medical office, industrial, and retail space.  Reach out to us for assistance with all of your commercial real estate needs at (813)-300-2227 or email us at pam@mobiliticre.com

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