For decades, the classic questions posed by commercial real estate property owners and property managers include: “How do we get someone to buy into our building?” “How do we get a company to lease space in our building?” Unfortunately, many have not evolved past the idea of selling space.

In their minds, space is the final frontier in terms of selling strategies. Traditional amenities like air conditioning, parking and elevators are a given. There are other intelligent amenities like dual feeds to two central offices for network connectivity and dual power feeds on separate grids to power stations. These are now must-have amenities.

Trying to lease space without some of these new building amenities is like trying to sell a car without power steering or a radio. Options that were rare or even non-existent are now considered to be standard features by those who are looking for premium space.

Space: The Final Frontier?

Just like investing strategies have changed over the years, real estate strategies must change as well. A 1980s strategy isn’t going to work in today’s competitive market.

There is a strong tendency to sell to the lowest-common denominator when pressured by competition as well as potential tenants who don’t want to pay a penny more for anything. The lowest-common denominator is space. Here’s the classic strategy:

If the other building is at $15 a foot, we’ll go to $13.50 a square foot. If they are at $12 a foot, we’ll go to $10.50 a square foot.

If they are a blue-chip tenant with other space needs at different locations, ask if they will accept $9.45 for this space. We will make it up on the second lease.

The days of having that as a leasing strategy should have gone out back in the 1980s.

I commented about this back on a real estate development project in Silicon Valley in 1986. I wrote several articles about the changes in real estate linked with technology. It’s a more complex sell. The traditional “experts” have to understand the impact of technology requirements on their products.

If you are in real estate today, you have to understand the needs for connectivity and reliable power. These have gone from a function that gets reviewed after the lease is signed to something that is a huge concern in advance and should be in the planning stages of a property.

Why? Because broadband connectivity has gone from being non-existent on the list for a corporate site-selection committee 10 years ago to one of the top three criteria they use in selecting buildings or campuses to locate or relocate corporate facilities.

These were some of the issues I found as I was writing a white paper on intelligent business campuses, which I will be presenting in Springfield, Ill. and Milwaukee later in 2007. It focuses on what’s happening globally as developers create new platforms for businesses to succeed in global markets.

Single intelligent buildings are being clustered in intelligent industrial parks and what I refer to as “intelligent business campuses”. These are the new economic development platforms for regional sustainability. I see them already implemented in Korea, China and Taiwan.

There are a lot of big egos in real estate, but if they don’t follow this definite shift in the markets, they might as well concentrate on warehouses where the ultimate measure is still space.

Space is Space?

“How smart a building do you need?” has to be as easy a question to ask as: “How much space do you want to lease?” That was at the end of my article that appeared in Real Estate Review back in fall of 1985.

The complex follow-up questions about technology and intelligent amenities needed by the potential tenant have to be as easily conveyed as the traditional follow-up questions that have been around for 50 years. Master planning today is not only a new ball game. It’s a new sport.

Power and connectivity planning has to be brought into the master planning phase. It’s not a task further down the line after the tenant has signed up. Understanding and applying this will separate the trumps from the chumps.

Carlinism: Real estate firms are in for a big surprise. The buildings that lack solid technology amenities will lose first-class tenants and slip into second-class properties. It’s happening already.