A proactive real estate development company recently launched a major greenfield development project. The company aimed to add fiber optic internet to buildings in the complex during construction which would provide the property the ability to handle thousands of resident and on-site management devices for decades without the need to upgrade the network, or on-site equipment, in the near future.
This was a novel approach in an industry content with only providing wireless access points in the units which need to be replaced every few years, causing tenant disruption, and additional management burden. Flume’s fiber deployment not only created a hands-off future-proofing approach, but an opportunity for the developers to generate additional net operating income without spending any additional capital, and further increase the property’s value by 3.1%.
This case study explores the real estate development company’s partnership with Flume Internet, focusing on how they successfully implemented advanced internet technology in these new developments.
It highlights the careful planning and execution and the clear benefits for residents and the property company. The project provides insights into the benefits and process of integrating fiber optic internet early in greenfield residential developments to increase future revenue.
In the U.S., the reach of fiber optic internet to households has steadily increased, yet a significant portion still lacks access. By mid-2023, about 55.6% of U.S. households had access, a notable increase from 45.9% in late 2021. However, fiber optic networks are available in only 43% of the country. In this context, Flume's role becomes crucial as they work to bridge this accessibility gap.
The importance of fiber optic internet lies in its technological superiority. It uses light transmitted through hair-thin strands of glass, enclosed in waterproof, protective cables, providing breakneck speeds, low latency, and won’t use any electricity from your property. This means quick response times, and symmetrical upload and download speeds for internet commands. Such capabilities are essential in today's internet-dependent world, especially for work-from-home setups and video conferencing. Moreover, fiber optics are more environmentally friendly, using less electricity and potentially reducing carbon emissions by up to 37% compared to older technologies.
Moreover, as of the end of 2023, up to 54% of Americans have cut the cord in favor of streaming options that offer a greater variety, at a lower price. Flume expects that this trend will continue until cable has been entirely phased out in the next few years.
The pandemic-induced shift to remote work and online activities highlighted the need for reliable, high-bandwidth home internet. Before the pandemic, only about 7% of U.S. professionals worked from home, a number that more than doubled during the pandemic. This shift increased the demand for fiber optic cables as stable, high-speed internet became necessary for work and leisure.
Flume is actively addressing these needs by expanding fiber optic internet access. Their efforts are about meeting current demands and preparing for future connectivity requirements, making their role in the continental U.S. internet landscape pivotal.
The property is a landmark development in integrating fiber optic internet and managed services into greenfield developments. This initiative represents a blend of foresight, technology, and efficiency. Although easier to implement than a brownfield development, this approach is new to the industry, especially from a single vendor.
The project involved a strategic partnership between the development company Flume Internet, and other relevant third-party vendors working on the project. Key highlights included:
Flume's role in the greenfield development was crucial. The property’s primary challenge involved extremely poor cellular coverage across the property. Cellular signal coverage has faced rising issues since 2021. As a result, Flume offered its Total WiFi option to cover the property entirely with building-wide WiFi.. This allowed for WiFi calling and blanket coverage without any gaps in service.
They managed various aspects, such as VOIP services and IP address allocation for building systems, and ensured high-speed, reliable internet connectivity prior to tenant move-in.
This greenfield project significantly increased the value of each unit, adding $21/unit in profit to the building owner, and increased the Annual Net Operating Income (NOI) by $233k. Additionally, it boosted the portfolio value by over $4.6 million without any capital expenditure. The tenant satisfaction rate soared by 35%, attributed to superior internet services, multi-gigabit broadband service to the unit, and efficient onboarding processes.
Financially, both the development company and Flume saw substantial revenue growth. The billing system was streamlined, further enhancing transparency.
Customer support included over 100 hours of dedicated Flume support for leasing offices, further simplifying the tenant onboarding process and simplifying the burden for management. Tenants were able to get connected to fiber internet immediately upon moving into their apartments. The property company was as a result able to save on manpower hours and cost as a result of never needing to provide tenants connectivity support.
Deploying fiber optic internet in this greenfield development project is a testament to meticulous planning and execution. Key achievements included:
The project's timeline highlighted Flume's efficiency, with the fiber installation completed 180 days ahead of schedule and all materials shipped 90 days early. This prompt execution signaled strong project management skills and minimized potential disruptions to the construction process.
Another significant aspect of this project was its integration of various services. VOIP services were seamlessly incorporated into essential systems like key card gate access. Flume also managed a /28 block of IP addresses, crucial for operating various building systems such as security cameras, access control, mailroom management, elevator systems, and lobby temperature control.
Flume’s expertise in setup allowed for seamless integration and operation of these diverse systems, ensuring a harmonious and efficient network throughout the buildings.
The projects have yielded significant economic benefits:
From a network performance perspective, the projects showcased remarkable results:
Tenant satisfaction in the properties soared by 35% due to the efficient onboarding process and multi-gigabit broadband to the unit. Flume provided over 100 hours of dedicated support to property leasing offices, streamlining the transition for new tenants.
The pre-installed internet setup in each unit allowed tenants immediate access to high-speed internet. The benefits extended beyond individual units, with seamless connectivity in common areas enhancing residents' everyday experience.
A major challenge was a last-minute request for VOIP services. Flume tackled this swiftly, completing the necessary implementation within two weeks. This quick response showcased flexibility, strong operational project management, and commitment to client needs.
Additionally, integrating various technological services alongside ongoing construction posed a challenge. It was successfully overcome by coordinating closely with construction teams and employing managed switch services. This approach ensured a smooth integration of the fiber network with the building’s other systems, maintaining the project timeline.
This widely successful greenfield development project exemplifies the successful integration of fiber optic technology in the residential space. The impact goes beyond the property and Flume, setting a precedent in the real estate and telecommunications sectors.
The projects demonstrated the advanced internet infrastructure's economic viability and tenant satisfaction benefits. Furthermore, it showcased unparalleled project management from the ISP, Flume Internet, in an industry known for delays,poor timeline management, and customer support.
This success has led to more widespread adoption of fiber optic technology in new developments, reshaping the standard for residential connectivity and opening new avenues for growth in the real estate and ISP markets.
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