What 5G Wireless Technology Will Mean for Real Estate

The next generation wireless telecommunication or 5G has far reaching implications for various industries, including the real estate. The technology allows speedy data transfers and multiple-device usage. According to IHS, 5G will enable a global economic output equivalent to $12 trillion by 2035. The value chain attributed to the technology will generate an output of $3.5 trillion and support over 21 million jobs globally over the same period. The value chain is also expected to invest some $200 billion annually as part of continued efforts to enhance network and business application infrastructure. Communication analysts see 5G as the fulcrum that will transfer mobile technology into a General Purpose Technology (GPT). This will then transform the way economies and industries are defined. In the coming years, 5G will be used in the following key areas:
• Enhanced Mobile Broadband (EMBB)
• Mission Critical Services (MCS)
• Massive Internet of Things (MIoT).

In terms of overall build-up, EMBB is expected to drive adoption and create value in a truly 5G economy by expanding cellular coverage into several structural spectrums, including shopping malls, office buildings and industrial parks. The other facet is growing data capacity to allow the connection and use of multiple, localized devices. In the case of Massive Internet of Things, long-term investments in Machine-to-Machine and IoT will see 5G enhance economies of scale, which is expected to drive multi-industry adoption and utilization. Mobile technology is fast dominating the Mission Critical Services and many see this as the new growth area for 5G technology. The 5G is expected to support high security, reliable and Ultra-low latency applications to ensure the smooth autonomous vehicle and remote operability of equipments with little or no chances of failure.

What 5G Wireless Technology Portends for Real Estate
The transition to 4G from 3G mobile network made it easy for Smartphone users to communicate and explore a wide ranging mobile capabilities such as streaming video and taking snapshots. The much anticipated 5G rollout is expected to do much more by defining the way people work, live and communicate. Indeed, 5G connectivity is transforming itself from a desirable amenity to a real market necessity that cuts across different generations of users. According to real estate association Magazine NAIOP, 5G connectivity will greatly impact how Millenials make real estate decisions from buying and selling to renting properties. The benefits of 5G will also be felt by commercial real estate owners, more so property managers who can use the technology to expand their reach and capacity of transmitting commercials and general information.

The 5G connectivity also promises new growth opportunities to real estate managers and building owners because it represents a new asset class. However, creating an efficient 5G wireless infrastructure is expensive and requires a lot of planning. The impact is greatly felt when equipping local area micro-sites, since the undertaking demands working around zoning law restrictions and fighting opposition from locals. Building owners willing to house the new infrastructure should also be ready to house additional equipments over their rooftops. For a long time, real estate managers and building operators have overlooked the importance of market information and have left the control of this vital resource to network carriers. The leverage by carriers began about 10 years ago when most of the original ground telecommunication leases were drawn to last between 20 to 30 years.

Today, specialty REITs can buy and take ownership of single tenant, proprietary cell towers. Through a clearly set out auditing practices, building owners can benefit from the review of communication infrastructure leases, overlooked contract breaches, and missed rental escalations. Dark fiber operators and local communities can also benefit from 5G wireless connectivity by generating rents and capital events from non-core assets that were hitherto undermanaged. The revenues will emanate from sales of wireless specific easements and new leases signed with advanced network carriers. Real estate companies and building owners can use the 5G gigabyte connectivity to enhance their marketing campaigns without spending too much money since the technology requires less energy and is faster.

Luis Enrique Coll is a seasoned real estate investor, housing consultant and a huge proponent of technology. His company, Alco International Group is on a larger mission to develop spaces that will add value and generate enthusiasm. The multifaceted, family owned real estate company has undertaken several projects in Florida, among them the construction of luxurious Adagio Fort Lauderdale. Outside the US, Alco International Group’s has spread its presence to Venezuela and Panama. The company recently completed a massive housing project in Venezuela targeting low income dwellers. Under Luis Enrique Coll leadership, Alco has expanded its property offerings from traditional residential apartments to include Class A offices and mixed-use properties such as hotel establishments and retail spaces.