How to Increase NOI by Meeting Your Residents’ Broadband Needs
By Kurt Fisette, Starry
The internet plays a critical role in our lives. It has evolved from a luxury to a necessity, revolutionizing the way we work, play and communicate. With so many things we value being connected to the internet, it’s no surprise that it has had an enormous impact on the world of commercial real estate. High-speed internet is the second most important amenity to renters when choosing a new apartment (with air conditioning being the first). According to a recent National Multifamily Housing Council report, 93% of renters want high-speed internet access and 63% say they’d refuse to rent an apartment without it.
The demand for broadband internet will only continue to grow as residents’ personal and professional preferences shift:
• More and more people are becoming cord-cutters, abandoning their pricey cable and satellite bundles and switching to streaming TV apps like Netflix and Hulu, where one can watch with just an internet connection. In 2018, there will be an estimated 33 million cord-cutters in the US, a 32.8% increase from last year. In order to support optimal viewing experiences with no lag, high-speed internet will be crucial.
• An increasing number of professionals are electing for more flexible arrangements and are working remotely from home. Today, 63% of companies have remote employees and over 3.9 million Americans work from home at least half of time. In cities thriving with entrepreneurs, small businesses, and creatives like Los Angeles, work-from-home professionals need reliable broadband internet, with faster upload speeds to efficiently run their businesses, work from the cloud, and take part in video conference calls.
However, it could be challenging for apartment owners to meet their residents’ needs. Bringing fiber-speed internet to your building can be a time-consuming ordeal that involves tearing out walls and running cable. To make matters worse, if your building is too far from the existing fiber network, the costs to extend its reach could be in the hundreds of thousands of dollars, expenses that you might have to cover.
And once the internet is actually installed, the service provided to residents could fall short of expectations. In the 2018 American Customer Satisfaction Index telecommunications report, internet service providers showed some of the lowest satisfaction scores, seeing its industry score drop 3.1% from the previous year. Sometimes speeds are inconsistent, or the service cuts out. In LA specifically, many older buildings were built using construction methods that severely impact in-unit WiFi coverage. Other times, customer service isn’t helpful in troubleshooting or providing clarification on pricing. More often than not, residents are shocked by rate hikes on their contracts after the initial year. Residents typically only have access to one or two providers, leaving them with little alternatives or choices. This makes them vulnerable.
With dependable broadband internet being a highly desired amenity in apartment buildings, insufficient service could lead to business risks that impact net operating income for apartment owners:
• Inconsistent service in the building can create more service or maintenance requests for the building’s on-site manager
• Unreliable service and slow speeds negatively impact a resident’s in-unit experience which can increase turnover. It’s estimated that it cost $2,811 or more every time a resident leaves a building.
• Not having multiple fast and reliable internet options could influence leasing. In an amenity-rich and competitive market like LA, future residents may choose more “desirable” buildings that meet their internet needs.
In the current landscape, apartment owners may seem stuck when trying to bring more high-speed internet to their buildings. However, we at Starry are looking to reinvent the internet with by delivering high-quality, affordable internet access through our innovative 5G fixed wireless technology. We work closely with our real estate partners to connect their buildings with gigabit-ready internet that residents love. Our lightweight rooftop receiver can be easily installed, and our flexible solutions allow us to use a building’s existing wiring, so there are no infrastructure requirements for you and no disruption for your residents. And it all comes at no cost to you, the apartment owner.
Residents then can enjoy a simple, no long-term contract, no data caps, no-hidden fees plan of just $50 a month for 200 Mbps download/upload speeds, which includes installation, 24/7 customer care, and Starry Station modem. Our “white glove” installation process is seamless and uniquely designed to empower the customer through features like ‘pick your install time.’ At its core, Starry is a different type of internet service provider, one that emphasizes network technology innovation and superior customer care.
Providing exceptional, gigabit-capable internet, like Starry, has been proven to increase a building’s rental value by 8%, which could ultimately lead to an 11% net income gain. For owners, the change is even more clear: gigabit-ready internet could instantly add 3% to an apartment’s value, the equivalent of installing a new fireplace or a half-bath. Millennials are now the largest generation in America and they’re willing to pay more for apartments that are amenity-rich, especially with connected devices.
High-speed internet is becoming less of a “nice to have” and more of a required feature that holds real weight, and dollars when attracting tenants. With Starry, adding high-speed internet to your building can easily help increase net operating income a number of ways:
• Starry is a zero-CAPEX installation to the building
• Starry’s white glove service, excellent in-unit WiFi coverage, and access to our award-winning touchscreen router is a market differentiator that can help fill vacancies by attracting Millennials, cord-cutters, and work from home professionals
• Starry can help increase resident satisfaction & retention rates. Our current users love us, as our average satisfaction scores are 4.96 out of 5
We are happy to be in Los Angeles and are excited to talk to apartment owners who are looking to bring a new choice for the internet to their residents. Please email us at firstname.lastname@example.org, visit http://starry.com/amm, or call us at (323) 364-5489
Starry’s mission is to connect people to high-quality, affordable internet access by building better, more intelligent wireless access networks using its innovative 5G fixed wireless technology. Starry offers its customers a simple, no long-term contract, no-data cap plan of just $50 per month for 200 mbps download/upload speeds, 24/7 customer care, and all the equipment. Starry is a different type of internet service provider – one that emphasizes network technology innovation and superior customer care.