Office developers, phone firms hook up to offer broad services
Washington — A quiet revolution -- now in its third year -- is sweeping through new office buildings. Developers are forming partnerships with telecommunications vendors in a marriage brokered by technology, the ``office of the future'' ideal, and computer networking.
The concept is called ``shared tenant services'' (STS). It takes the ``intelligent'' building -- wherein host computers oversee lighting and heating -- several leaps forward. Phone systems, computer linkups, electronic mail, and other features are part of STS buildings.
``Telecommunications-enhanced real estate will be akin to heat and water,'' declares Migs Damiano, a specialist at Planning Research Corporation in McLean, Va. He and others say office-building tenants can save between 20 and 30 percent on information processing and communications costs using STS.
Already, office builders in cities like Washington and Dallas have become enamored of STS. As the concept matures, other cities are likely to follow suit, analysts say. Many developers use STS as a lure to prospective tenants, especially in ``soft'' real estate markets.
While only 50 commercial buildings were using the concept in 1983, that number quadrupled a year later, and 82 projects were initiated in 1985.
STS boosters concede bugs exist. Lack of product compatibility within a system, erroneous billing to various tenants on a shared pool, and questions over ownership of various components are all possible problems. Joseph H. Newman, executive vice-president of Tishman Realty, thinks that ``lack of uniformity'' in building regulations hurts STS.
But at Telestrategies, a McLean organization that monitors STS, Jerome Lucas asserts that managers, data processors, and other parties are coming to understand ways of matching needs.
Dozens of major structures (250,000 square feet or more) are likely to be built by 1990 using shared-services. Olympia & York, the Toronto-based firm that is North America's largest developer, has plans to sign up millions of square feet of STS space by 1988.
Many projects are high, high-tech. MCC Powers in Northbrook, Ill., offers integrated systems triggered by information from an employee access card. Climate control, lighting, and other aspects of office equipment and functions are handled. Atlanta's Concourse Center adopted this form of STS.
Mountain Bell is building a $200 million, 160-acre planned business park in Tempe, Ariz., which will feature the multi-tenant aspect, says Stephen Larsen, president of the Fountainhead Corporate Park.
STS includes electronic mail in Orlando, Fla. A $400 million mixed-use complex, DuPont Centre, in this Florida city has features such as the ability to transcribe notes and laser-print them.
A system at Republic Plaza in Denver -- a 1.2 million-square-foot downtown office tower -- features a computer-based digital communications system through First-Tel Information Systems and Oxford-Ansco Properties. Tenants can access complete voice and data transmission capabilities in conjunction with individual leasing packages. Tenants will be able to select from a complete menu of features, choosing as many or as few as they want, including use of local area networks.
The multi-tenant concept will probably receive a boost from further growth of fiber optics, too.
Proponents of STS say worker productivity is improved greatly, economies of scale are quickly realized, and small businesses can plug into the same high-tech gear previously available only for their larger rivals.
Moreover, STS is able to untangle many of the complications brought about by AT&T's breakup. STS systems often calculate the best of several long-distance rates automatically for office tenants and route calls accordingly.
Multi-tenant services are not feasible for all buildings, but even modest-size (80,000 square foot) facilities are going into STS. Developers often share costs for installing STS ($1 million or $2 million in most cases for a 250,000-square-foot office buildilng) with telecommunications firms.
There is one issue that vendors are reluctant to discuss: privacy. Managers can keep tabs on workers' phone calls, personal long-distance calls, and use of other equipment such as photocopiers. But Dr. Alan Pearce, former chief economist at the Federal Communications Commission, thinks this worry is exaggerated. ``Service, convenience, and productivity are appreciated by workers,'' he says.
STS has ``tremendous possibilities, but hangovers from the [AT&T] antitrust suit still remain,'' Dr. Pearce notes. At regulatory agencies, there are worries about the effect on revenues these networks will have as they bypass common carriers.
And when ``equal access'' provisions of the famous antitrust decree end in September 1986, it may usher in other changes affecting STS -- which is still largely a phone system.