"We try to let them know it's going to take longer than the vendors say it's going to take," says William A. Rogers, senior vice president of C.B. Richard Ellis here. "When they call Ameritech, for instance, they can't even get an appointment for two to four weeks, and sometimes it's six to eight weeks. Then there are the horror stories of eight weeks or more."

Michael Granieri, a spokesperson for Everest Broadband Networks, tells Northeast bureau chief Amy Vaughn that one of the biggest problems was the initial "land grab." Companies sought to sign on as many buildings as possible without necessarily being able to service them all.

Joe Gillette, CEO of EurekaGGN, agrees. "In the past, there was a big push from Wall Street to get building-access agreements, so owners were being offered equity participation and the buildings were wired free of cost with 5% to 7% of the revenue going to the owners."

Granieri adds: "The companies didn't always do a thorough analysis of the cost versus revenue." They were also "much too aggressive in rolling out geographically," spreading themselves too thin.

"Building owners can't be sure that the provider they contract will be there for them in the future," laments Michael J. Wolfe, president of Midboro Management Inc. in Manhattan. "Like the dot-coms, broadband service providers are constantly rising and falling. Even relatively established service providers are not bulletproof."

If, as Granieri says, building owners weren't doing the proper due diligence at first, that is changing now, and besides preparing tenants to play the waiting game, more building owners are also playing defense by performing rigid due diligence before granting access to their buildings. Crescent Real Estate Equities evaluates its tenants' needs and suppliers' services before signing contracts, which has generally worked well. As a result, "we really haven't had a bad experience other than one company that defaulted," vice president of new business and technology services Howard Lovett tells GlobeSt.Southwest bureau chief Connie Gore.

Some 51 of Crescent's 54 class A buildings in the Dallas, Houston and Austin markets are lit by Broadband Office. Other competitors simply have failed to match that company's service, Lovett adds.

Meanwhile, Harwood International has its own high-tech consultant under contract in the person of Roland Garcia. He tells new tenants, "if you will listen to me, you will not make 95% of the mistakes you will have made without talking to me." They'll also save money. A Harwood insider tells Gore that tenants who listen to Garcia save as much as 50% on communications hookups.

Although Garcia pushes broadband vendors to use Southwestern Bell lines, George D. Livingston, founder/president of Orlando-based Realvest Partners Inc., sees local carriers not as part of the solution, but rather as part of the problem. "The culprits are the local carriers, such as BellSouth," he tells GlobeSt.com Southeast bureau chief Alex Finkelstein. "They do not add broadband in a timely manner. Keep in mind, though, that less than 10% of existing buildings here are served by broadband."

One would expect that, given all the industry consolidations that have taken place in the past few months, service would take yet another hit. But William Rogers hasn't noticed a change in the service quotient in the Chicago market since the broadband consolidation began, but Roland Garcia sees continued contraction. "I think all smaller ISPs with more investment in people than they have in infrastructure will fall off the face of the earth," he predicts.

That makes vendor choice even more critical, Michael Wolfe suggests to Vaughn. "Going with a provider of lesser caliber than the top of the heap is inviting trouble," the New York City property manager says. "As property managers, we have to advise our building tenants about the pitfalls of contracting with providers offering seemingly attractive deals and instill in our boards the idea that the quality of a provider is infinitely more important than saving a few dollars on service."

Instant Insights /

BIG PICTURE: Broadband Service Lapses Burden Bldg. Owners

Related Stories

Recommended For You