When we think of hear of 5G wireless technology, our first thought can jump to the improved speed on our phones, the use of autonomous cars or how exciting it will be to have a smarter home. Most haven’t considered how deploying 5G networks will impact the current real estate market and how it will change in the future.
Due to the high-band spectrum in which 5G operates on, it makes it hard for the signal to travel through walls and windows to your various devices. In order to fix this issue, real estate developers would have to install fiber optic cables in the walls of homes and office buildings. Developers aren’t rushing to do this because frankly, it’s too expensive. Currently, most developers aren’t constructing properties with 5G in mind and they have no plans of adding fiber optic cables to their current properties. Developers are choosing the traditional route like routers because fiber optics can be too pricey.
Building any sort of structure can be a costly endeavor in itself, and most developers are always looking to cut costs where they can, so adding 5G capabilities on top of that is just adding more bricks on to an already heavy load.
According to the U.S. Department of Transportation, the average cost of 6-10 miles of cable is $66,940, which is based on 150 fiber optic installations. That cost isn’t inclusive of what is spent on materials and labor to build the structure, in addition to how much cable is required, depending on what size of the building.
Some developers are hesitant to modify existing buildings with fiber optics because even that can have a hefty price tag. To demolish, renovate and upgrade telecommunication capabilities, most developers can expect an increased price tag of about 30% more than a traditional renovation project, in addition to the existing high-costs of building and maintain the structure.
Another factor that can drive the price up is if the building is too far from the closest fiber optic internet line. Developers can also see a jump in costs if digging is required or if the cables have to pass through any physical obstacles like bodies of water, highways and more.
Some buildings will require fiber optic cables to be running through the floors and walls in order for the building to be blanketed in 5G coverage. Again, this is because of the high-band spectrum that 5G operates on, so more equipment is needed to boost that signal since it can’t travel far or is easily interrupted.
Some developers see making a 5G building a financial burden, but others see it as an opportunity to make more money. Fiber optics would cut down on the required maintenance because it would be the latest and greatest in wireless technology. In addition, the cables would be resistant to corrosion because it’s not like traditional copper wiring.
Building owners could charge more money for rent to make up for the costs to outfit the building with fiber optics to make it 5G capable. As businesses grow and see the need for 5G, updated buildings with 5G capabilities can attract residents willing to pay a bit more for that high-speed internet service. Plus, adding the fiber optic cables can also increase the property value if the developer decides to sell the building in the future.
In order for buildings to be desirable by tenants, developers will need to consider the costs of updating their properties to accommodate the latest technologies, and likewise, for those building something new. It can be a costly investment upfront but developing real estate that is 5G capable can be a worthwhile investment in the long run, as 5G is the future of wireless technology and will soon be more in-demand than ever.
Article originally published on Yahoo Finance