January 23, 2002

'Smart buildings': High-tech future for historic properties

Honor Hawkins  /  Charleston Regional Business Journal

When Alan St. Clair set out to renovate 525 King St., known as the Father and Son Building, he wanted to merge the old with the new.

Built in the 1930s, the commercial property still had heart-of-pine floors and original brick that St. Clair, the owner, wanted to preserve. But to make it a preferred space for potential tenants, St. Clair had to think smart.

State-of-the-art real estate trend "smart building" is making its way to some of the most historic properties in the Lowcountry, offering even the smallest companies the cache of a prime address plus "wired" infrastructure previously reserved for big businesses and big cities with deep pockets.

Charleston Digital Corridor director Ernest Andrade has dubbed the local phenomenon "smarter building." While most new construction, including that in Charleston, is technologically equipped, the Lowcountry makes it unique by constructing this technological backbone within some of Charleston's most historic structures.

Net-based business communications firm Sans Locus moved into its smart office at 418 King St. less than 24 hours after signing the lease. The combination of a pre-wired building with historic character made the site the "best case scenario" for the startup, says co-founder Joe Bryan. "Having the data connection to the Internet already in place potentially saved weeks of time."

Bryan appreciates the modern amenities that helped his firm get to work, but believes clients value the office's more antiquated attributes. "Even when our clients and prospects are located outside of the peninsula, they love coming to our offices for meetings because of the beautiful setting and the appeal of downtown."

Even though remodeling an older structure can be more taxing than building from scratch, pre-provisioning is worth the extra expense, according to Philip Eckman of The Barefoot Group LLC, a technology consulting and project management firm. "Having tenants coordinate their own wiring is like having tenants install their own sewer systems," he says. "It just doesn't make sense." What does make sense is that upfitting a property for any tenant type benefits developers, owners, leasing agents and occupants.

St. Clair hopes that building smartly will help him rent easily. "I wanted the space to be attractive to all types of businesses, and offering a wired but historic building suits everything from a tech firm to a law firm to a design studio," says St. Clair, whose interested occupants represent a variety of businesses.

Chris Price, principal of the PrimeSouth Group LLC, says updating older buildings to compete with newer properties is quickly becoming more of a necessity than an option. His company–-which owns properties throughout the Lowcountry–-including Sans Locus' office, began smart building about four years ago in response to tenant demands and competitive pressures. "We realized that, though this may cost us more initially, smart building in historic properties is one way we can stay ahead of the competition," he says. "Smart building is a smart investment."

Does this investment translate to higher rents? Not necessarily. While the arrangements are often negotiable, tenants typically pay a fixed monthly rate for phone, data and Internet services for less than what they would pay a provider directly, without the hassle and expense of the initial set-up, which can cost thousands. "Tenants in smart buildings are able to get better quality technology at equivalent or less expense," adds Price. Sans Locus' Bryan says that moving into a smart building probably saved the company "several hundred–-if not thousands–-of dollars in setup and service fees."

The Charleston Digital Corridor's Andrade says that applying the principles of smart building to older properties embodies his organization's marketing mantra, "18th century architecture and 21st century technology." Delivering on this theme, says Andrade, is critical to attracting the type of knowledge-based enterprises Charleston needs to boost its economy. "The bottom line is that if we want to compete with the Northeast and West Coast, we have to offer these types of buildings."

Bryan agrees that capitalizing on Charleston's historic appeal by equipping it with digital infrastructure is essential to economic progress, and that the responsibility lies with owners and developers. "There will come a day–-and the sooner the better in my opinion–-that offering commercial office space without a digital infrastructure will be just as ludicrous as offering space without heating and air conditioning."