Arie Barendrecht on Mission to ‘Future-Proof’ NYC’s Crumbling Real Estate Stock
Liam La Guerre Sept. 30, 2015, 9:45 a.m.
One of Arie Barendrecht’s favorite stories comes from a friend who works at a coworking space, and it can explain in fairly short order why his company, WiredScore, is important.
It was three years ago, and the lights cut off at the coworking space’s Manhattan office, which had a backup generator for Wi-Fi but not the bulbs.
“Nobody moved,” Mr. Barendrecht recalled in an interview with Commercial Observer. “Everyone had Internet, so they continued typing away and getting their work done and then when the backup generator went down it’s like pandemonium. They basically preferred to work in the dark as long as they had Internet connectivity.”
WiredScore is a relatively simple concept: it ranks the Internet connectivity of commercial buildings. This is something that has become an outright necessity in a city where a lot of the building stock is old, but the city’s economy is digital. (At least a lot of it.)
Mr. Barendrecht, 35, founded WiredScore three years ago with Jared Kushner, whom he knew through mutual friends, with a grant from the New York City Economic Development Corporation with the goal of making it easier for tenants to know which buildings have good connectivity and also make landlords upgrade their buildings. (Disclosure: Mr. Kushner is also the publisher of CO.)
Mr. Barendrecht, a University of California, Berkeley and Wharton School graduate, worked as a consultant for tech, media and financial companies prior to WiredScore. Today, more than 425 commercial buildings have a WiredScore connectivity certification, totaling nearly 200 million square feet of property around the country. Of the 425 buildings, 240 of them are in New York City from Midtown masterpieces like 500 Fifth Avenue, to a whole slew of buildings in Brooklyn’s Industry City. The company has about a dozen full-time staff members—but ironically is based in a Soho building that isn’t WiredScore certified, since it is a residential apartment building and currently WiredScore only ranks commercial properties. However, Mr. Barendrecht revealed to CO that the company will certify residential buildings soon in a vertical expansion, so he’ll know his score soon enough.
For now the team is focusing on geographic growth. They have opened a regional office in Boston, and plan to open one in Washington, D.C., and in a few weeks will launch WiredScore abroad.
Tell us about your background.
My former life had been in consulting—almost my entire life pre-WiredScore. And as a consultant, the easiest way to describe that job is you’re solving problems in industries that need them, when the problems aren’t working themselves out on their own. My last job was at Boston Consulting Group. I consulted in media, tech and financial services.
Why did you start WiredScore?
Three years ago, my co-founder [Mr. Kushner] and I realized that the Internet is becoming the most important thing for companies looking for office space. So it used to be how nice the lobby is or what the views are like, but all of that stuff doesn’t matter anymore because our Internet connections are so fundamental to how we do our business every day. Like a law firm is uploading files online, [doing] more video conferencing with their colleagues in Boston and San Francisco every day and without a good Internet connection it doesn’t matter how nice the windows are. We realized that this was becoming extremely important, but there is no information on whether the Internet [connection] is good. So it kind of dawned on us that we needed to figure out a way to help businesses get better connected.
Did the long success of the U.S. Green Building Council’s LEED [a ranking platform for the environmental sustainability of buildings] have any impact on WiredScore?
Absolutely. So LEED has been around for over 15 years, and having an independent thought leader that can drive the conversation forward about what landlords should be doing is immensely valuable. I think the real estate community could really leverage the expertise of independent agencies like WiredScore, and like USGBC dictate what they should be doing to future-proof their buildings and to know what tenants are looking for. One of the things [landlords] would admit is that they are not experts in technology. Some are more readily able to admit that than others. But it has just never been a forte of the real estate community to be technology experts. So I think one of the reasons why we were endorsed by [the Real Estate Board of New York] and Urban Land Institute and [Building Owners and Managers Association] is because we could bring thought leadership to an area that’s really important to tenants. And I think USGBC did the same thing with sustainability.
Have you guys partnered with them at all, or looked to?
No, we haven’t. We obviously look to what they are doing as an interesting model. There are parts of LEED that are very different than what WiredScore does. And so for that reason we don’t have a formal partnership.
Tell us about the process of evaluating a building.
The first thing we do is we help a landlord benchmark their building against our standard, by them just taking a free confidential survey. That tells the landlord more or less how [they] are going to score. The second thing that we do when a landlord wants to pursue wired certification is we send engineers to the building to physically audit the building. They’ll spend about a half-day walking in the basement, inspecting where the cables are coming in and the path they are tracing through the building to understand and really get a feeling of what the digital infrastructure is like. The third thing we do is we report that to the landlord and they can decide whether they want to publish their certification or make upgrades to their buildings to get to a place where they would qualify for our standard.
What are some things that owners can do to get their buildings certified or achieve a higher ranking?
One is make sure there is a choice of providers in the building—so multiple fiber providers in the building. Two, is having redundant and resilient infrastructure. So basically meaning that the cables coming in are well-protected and they are not at risk for getting damaged or being pulled so everyone loses their Internet, which happens all the time. And three is having an ability for new carriers to come in and install cables in the future. So if your business wanted a different Internet service provider, you would want to know that it’s really easy to install [a new cable] into your space. We focus on connectivity-related stuff today. In the future, we might incorporate things like backup power generators, but today it’s really connectivity focused.
Is it always easier for a modern building to be certified than an older building?
I think the way that we look at it is [with] buildings that are in development—obviously before they are built or when they are still designing their telecom infrastructure—there are a lot of easy things that they could do to be a best-in-class technology building. When you look around at existing buildings, if you compare a Class A building in Midtown to a Class B building in [Soho], they both face unique challenges. So I would say that it’s not necessarily easier for the modern Midtown building to be certified versus a building down here. For example, big Midtown buildings that have lots of tenants, say 100 tenants in the building, they’ve had all these tenants pulling wires all over the place and cables in all different directions. Whereas a building down here in Soho that maybe has five or 10 tenants, they might face infrastructure challenges because the building [is] so old, but they don’t have the cables of 100 tenants blocking pathways and impacting the ability for people to get in.
How did 7 Bryant Park become the first building to become pre-certified WiredScore Platinum (the highest ranking)?
So I can tell you what it looks like when there is a platinum pre-certified building. So you could expect redundant connectivity. That means fiber cables coming in from both sides of the building. You could expect at least five different fiber providers that have agreed to provide access to the building. So what Hines [developer of 7 Bryant Park] did is they had letters of intent in place with the carriers in the area to say, “We are willing and able to connect to your building when needed.” In the telecom plans in 7 Bryant Park, they were planning on storing and maintaining telecom equipment in protected secure areas. If you are moving into 7 Bryant Park, you want to know that the cable that’s connected to your business is fully protected from the point it comes into the street to the point it ends up in your closet. And many buildings don’t have that.
Have you considered certifying other asset classes besides commercial properties?
We are working on residential certification as one of our growth areas for the next year. It’s the same issue; it’s hard to get information on connectivity. And similarly, like [with] our businesses, it’s so important that we can connect at home. We work from home. We all own one or two devices; it’s almost equally as important as your businesses. The only difference is that when your home Internet goes out for five minutes you can do the dishes or cook or go for a walk. When a business’ Internet goes down for five minutes, it’s debilitating. Like there are meetings canceled, there are calls dropped, there are people staring at the wall not knowing what to do.
Is it expensive to upgrade connectivity in buildings?
Interestingly, we haven’t had many of our 425 buildings spend any money to upgrade their buildings. That doesn’t mean it doesn’t take work. It does take outreach to the telecom community to work with Internet service providers. It sometimes means talking to the tenants in the building and asking what kind of services they are looking for. Getting some landlords to do that work could be a lift. But it’s not out-of-pocket cost. There are instances, particularly in the outer boroughs where getting fiber to a building would require some costs from the landlord. And that is mostly because the fiber cables aren’t that close to the building. So that’s happening today in Long Island City. That’s happening today in Brooklyn. In Manhattan, it’s pretty rare for a landlord to need to subsidize that cost.
Will WiredScore be available to landlords in other countries, as well?
We are excited to be launching in London next month. We are now the [unofficial] international standard for connectivity. Something interesting about London is that— similar to New York City—we are partnering with the mayor’s office in London. So we were competitively selected through a bid process by the city government in London to be the owners and operators of this program.
What’s the next step after London?
I think it’s two things. I think it’s geographic expansion. We have recently been investing in business development and new team members in other cities. Boston was the most recent and D.C. will be the next. And then vertical expansion. So for example, multifamily or apartment buildings are a perfect fit for our service.
Have you had any pushback from landlords about getting their buildings certified?
The biggest area of pushback is when a building is fully leased. They might say, “My building is fully leased so I don’t need to do anything to improve the tenant experience.” Not all landlords have that mentality, but that is probably the largest area of resistance. You can’t convince a landlord to improve their connectivity or fix the elevators if they are collecting checks every month from their tenants and that’s the type of landlord that they are. But there are a lot of landlords who are fully leased that embrace things like LEED and WiredScore, because they realize that not only do their tenants change, so there are going to be new tenants looking for space, but keeping your tenants happy and signaling to them that this building is cutting edge is important.