Lederer: New Building Telecom Services Benefit Tenants

Is Your Landlord Smarter Than Amazon.com? ... Gerry Lederer, BOMA's VP of Government and Industry Affairs, criticized my April 12 Dispatch, "My Portal's Better than Yours," which questioned the ability of landlords to generate significant e-commerce revenues when pure-play firms like Amazon.com aren't making money on the net. ... According to Gerry, "Every study says that you [landlords] need access to a robust offering of telecommunication ... service providers in order to protect your revenue stream of traditional rents. If a partner will take the risk of ... deploying a building-centric infrastructure and ensure that your customer base has access to services with the only cost to you being the donation of the telecomm space and your good will with the tenants, that alone sounds like a great deal."

Hey, Gerry, I totally agree. But some telecom providers and Internet aggregators seem to be promising a whole lot more. Here's one sentence from an e-mail last week announcing a new web service (I'm not making this up!): "The company is turning commercial real estate owners into trusted retailers that may ultimately earn as much from their tenants from providing services as they do from collecting rent." ... Whoa.

Yes, owners do have advantages. Here's a thoughtful response from Maurice Gatien of eSPACE CONNEXIONS. "The biggest cost for Internet companies (including Amazon) is marketing. Property owners have valuable beachfront access to occupants of their buildings and this can substantially reduce their costs of marketing their web-sites. Through signage in the lobby and parking garage, through the building newsletter, etc. it is possible to create low-cost awareness without the need to incur Super Bowl ad costs that many dot.com companies must pay to raise their brand awareness. ... Amazon pays a 10% to 15% referral fee to a web-site that sends them business. A building's web-site can thereby "net" more revenue than Amazon on the transaction, by simply creating an icon that sends the occupant to Amazon. Does this make Amazon smarter?" ... (Continued in Friday's Dispatch.)

--Peter