5G is the future of cellular service. Like 4G before it, 5G will revolutionize how we use our phones and other mobile devices online. The next generation of web-service will not just impact individual users, however. It will also lead to the rise of smart cities, autonomous cars, immersive education solutions, and much more. With these added capabilities also comes a greater demand for infrastructure support and technological planning.
The world of commercial real estate will see a massive impact upon the arrival of 5G. Whether or not the industry chooses to wholeheartedly embrace 5G is probably not a reasonable question. 5G is on the way, and CRE investors, builders, and planners must all take it upon themselves to prepare for the future of wireless technology.
What is 5G?
5G is a next generation cellular network that provides extremely fast web service for mobile users. The “G” in 5G stands for “generation”, denoting that 5G is the fifth major leap in cellular service technology. Each new generation marks a technological advancement which is incompatible with previous technology. 5G will be fundamentally different than 4G on a technical level.
While 5G is not yet available commercially, major players in the telecom industry including T-Mobile, AT&T and Verizon have rolled out pseudo-beta tests for 5G. The jump to 5G may be a tumultuous one, with new infrastructure and widespread technological upgrades being required before launch.
The practical differences between 5G and 4G capabilities stem from two key improvements:
- Extremely low latency: 5G drops latency (the delay while a network processes information) by 10 times or more compared to 4G wireless service. Latency can be as low as 1 millisecond.
- Vastly improved bandwidth: traffic capacity for 5G will improve by ~100 times compared to 4G. Network efficiency will improve by 100 times, and spectrum efficiency will improve by up to 3 times.
What does all of this mean? Lightning fast speed coupled with the horsepower to download, upload, stream, and everything in between to keep up with modern consumer and business demands.
How CRE is Preparing for 5G
Commercial real estate will have to adopt 5G in one form or another. Whether that means planning construction around 5G hotspots or understanding how smart car technology will impact travel times, this new technology will be a disruptive force in the CRE industry. Here are some of the ways that CRE professionals can prepare for 5G in the coming years.
The Importance of Understanding 5G Fundamentals for CRE
Before we take a look at any of the details of 5G preparation when it comes to commercial real estate, it is important for all industry professionals to have a baseline understanding of what 5G is and how it differs from your existing 4G tech. For example, many CRE investors, owners, and managers, punt all technology related issues to their IT staff. This makes perfect sense for the vast majority of situations. However, with new and disruptive technology, having an understanding of your current properties 5G preparedness and what improvements can and should be made is a great place to start. This begins with understanding how 5G works and how you can optimize your buildings to accommodate the technology.
Data Needs Will Continue to Increase Exponentially
Statistics on data usage on technological devices is staggering. Multiples quintillions of bytes of data are created each day from billions of users around the globe. Each year, the amount of data we collectively produce goes up exponentially as more users create more data with higher detail, density, and regularity. It is estimated that the world produced 18 zettabytes of data as of 2018. That number is expected to grow to 175 zettabytes per year by 2025. The ludicrous amount of data stored within a zettabyte is not the point here — the larger point is that data production and demand is expected to grow by ~1,000 percent in less than a decade. Building owners must take this into account when planning their IT infrastructure, staffing, and so forth.
5G Will Continue the Trend of Tenants Wanting an Improved IT Experience
Current renters, office space lessees, and hotel guests all expect a certain standard of connectivity from their spaces. As commercial real estate investors, owners, and managers, it is our responsibility to keep our eyes on the horizon for incoming technology. When 5G hits its stride a few years from now (estimates vary), individuals will expect their 5G compatible devices to work seamlessly at their workspaces, homes, or hotel rooms. By keeping up with 5G news and working with IT professionals, providing 5G connectivity can be seen as an opportunity for CRE investors rather than a potential weakness.
5G is not a matter of if, but when. Someday soon your phone will be able to stream high quality video with virtually zero load times, latency, or interruption. Smart cars and smart transportation systems will depend on this next generation technology to keep them connected. Commercial real estate investors will need to adjust to this new reality or be left behind by those who do. The real question will become how best to feasibly adopt 5G technology in a way that is cost efficient and maximally beneficial to tenants. As the technology continues to develop, the answer to this question will reveal itself more and more.