BULK SATELLITE & INTERNET SERVICES IMPLEMMENTED AT TIMBERLINKS APARTMENT COMMUNITY
"Given the algebra of multifamily valUations, where a property’s disposition value is linked to – and multiplied by –
the revenue it generates each month, Lynd estimates that the company added $1 million to Timberlink’s value in just over 90 days by buying TV services
in bulk and then reselling them to residents. Add to that the fact that The Lynd Company has been able to push rents by about 10 percent since taking over Timberlinks’ management, and they’ve got a recipe for profitability."
Timberlinks Property Information
Timberlinks, in Denton, Texas, is a 480-unit apartment community managed by The Lynd Company of San Antonio. Just minutes from both the University of North Texas and Texas Women’s University, the community primarily serves students, and its residents have “Gen Y” technology needs and expectations.
When The Lynd Company purchased the community in 2007, residents were receiving cable, Internet and phone services over a coaxial network. Yet The Lynd Company, which manages more than 34,000 apartment units in 15 states, knew it would have to offer its residents more if it wanted to remain competitive in the local market and to make the community, which was originally built in 2004, more future-proof. “We always walk the properties we’re buying and, as we did, we talked to the students living there,” says David Lynd, chief operating officer. “They asked us if we were going to update the cable and Internet…. We got the sense that this was a tech-starved community.”
“There were a lot of firsts for us on this project,” says George DeMartz, Connexion’s director of project management, who notes that Connexion’s business model to date has hinged on installing fiber-to-the-home networks at greenfield properties, because putting high-speed wiring and technology into buildings is done most easily – and cost effectively – in new construction. Yet, because Connexion was able to keep costs down by using the existing coax wiring, and gain 480 customers in one fell swoop, the project has been a watershed for the provider as well. “This was our first deployment of a retrofit on a mass scale, with 480 customers. It was our first 90-day deployment from contract signing to full-blown customer implementation. And we had our first deployment of an active cabinet headend system.”
While the technology firsts for Connexion have given the vendor lots to talk about, as well as new opportunities in the retrofit market, Lynd says the biggest takeaway for him has been the value the network has added to his property. The Lynd Company buys bulk services from Primecast, one of Connexion’s designated service providers (which in turn contracts with DIRECTV for video content), then markets those services directly to residents. The bulk service is a must-take “basic” TV service, which, with more than 200 channels and true IP capability, doesn’t seem basic at all. Residents pay a flat fee of $45 for the service with their rent each month, an amount that’s competitive with similar offerings in the area. HD channels, Internet and phone service are available at an additional, tiered pricing structure from Primecast, which also provides installation, administrative and support services to residents.
Given the algebra of multifamily valuations, where a property’s disposition value is linked to – and multiplied by – the revenue it generates each month, Lynd estimates that the company added $1 million to Timberlink’s value in just over 90 days by buying TV services in bulk and then reselling them to residents. Add to that the fact that The Lynd Company has been able to push rents by about 10 percent since taking over Timberlinks’ management, and they’ve got a recipe for profitability.
"We looked at this as an opportunity to charge the resident for their cable, and give them a better mousetrap for a cheaper price,” Lynd says. “Any time you’re in a position in life where you’re selling something that’s better, for cheaper, you are going to kill it.”
Lynd says residents have responded positively since the service rolled out in October, though he plays down the significance of the response. “Connexion has given us a great product, but I think looking at the residents’ reactions alone is a little bit unfair, because they were essentially going from dial-up to broadband,” Lynd says. “If you starve a guy long enough, anything tastes good.”
In this case, fiber seems to taste pretty sweet.
--Broadband Properties Mag.