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Upgrading NYC: Empire State Building

Empire_State_Building“Upgrading NYC” is a new series sponsored by AT&T in which we interview owners of and tenants in Manhattan commercial buildings that have recently upgraded their wireless connectivity. Next up is the Empire State Building, which has partnered with Illinois-based network infrastructure company Extenet.

The Empire State Building is an iconic presence in the Manhattan skyline. Unfortunately for tenants, the tower’s soaring height also means that wireless cellphone reception is disrupted past the 25th floor. That is about to change. Lisle, Ill.-based Extenet is building a new wireless network using a distributed antennae system, or DAS, which is set to open around the late third quarter. Once installed, tenants’ phones will connect to antennas on each floor that will connect to various operators.

Extenet is in the process of installing throughout the building 41 active remotes and 740 antennas connected by 48,000 square feet of coaxial cable, said Steven Kingwell, the vice president of network engineering and implementation at Extenet. That equipment will connect to a head-end facility, which acts as a central switching office, in the building’s concourse level. Modernizing an 83-year-old art deco property gave the project a new layer of complexity.

“The biggest challenge is the age of the building,” said Mr. Kingwell. The company had to find locations with enough space and power to install the remotes and antennas. The floors of the building are also in different states, with some gutted in anticipation of new tenants and others close to their original states, while the remainder have been renovated and modernized for current tenants. The gutted, unoccupied floors are the easiest floors on which to install the system, but in the case of occupied floors, Extenet must schedule around tenants and generally works during off hours, said Mr. Kingwell. Extenet is also installing an HVAC and fire suppressant system. The network is large enough that two additional wireless carriers can join at a later date. Extenet declined to disclose the cost of the system.

For Empire State Realty Trust, the REIT that controls the tower, having a new wireless network is a way to offer a new amenity for tenants. Although Extenet will pay the landlord a percentage of revenue from the system, the real value will be realized in more leasing activity, said Tom Durels, ESRT’s executive vice president and chief of property operations and leasing. The wireless network follows extensive renovations that have transformed the Empire State Building. In 2010, the property’s approximately 6,500 windows were upgraded to be more energy efficient and block heat. Significant renovations are still happening, with the ongoing construction of a new restaurant operated by the Pantina Group, new tenant-only conference centers and a new fitness center.

New investment and a leasing strategy focusing on attracting larger tenants have changed the occupants of the Empire State Building. Major tenants including cosmetics company Coty Inc. and career website LinkedIn have signed leases in recent years. Between floors three and 29, nine large tenants have replaced approximately 200 older, smaller tenants, said Mr. Durels. “They see the value in what we’re doing to enhance their own bottom line,” he said. The Empire State Building was 82.3 percent leased at the end of 2013, with asking rents ranging from the high-$50s to mid-$60s. Extenet is also installing a wireless system at Empire State Realty’s One Grand Central Place, set to open in June, said Mr. Durels. The landlord is also looking at other opportunities to upgrade buildings throughout its portfolio, which in turn is expected to lead to more leasing momentum and interest from tenants.

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