Are You Required To Approve Site Upgrades and Modifications? Have you been approached by a wireless carrier asking for your permission to modify/upgrade their equipment configurations on your rooftop or from a tower company to extend your cell tower lease? Wireless tenants will always make it appear that these are standard requests and will make it very easy for you to sign the bottom of the page, but the implications of your agreeing to these changes can be extremely significant for years to come. Moving too quickly without having an expert explain your options can cost average landlords significant amounts of money. Site modification opportunities do not happen everyday. When they do occur, you want to be sure to fully analyze it and be certain that such modification is outside of the scope of the original lease agreement. If so, then the carriers or tower companies will need to compensate you for such upgrades or modifications. But are you qualified to know which upgrades exceed the scope of the lease? Will you be able to contest the wireless tenant’s claim that “it’s a standard upgrade fully anticipated in the lease”? And how would you value such upgrade in terms of monthly rent increase – $50 more a month? $100/mo? $500/mo? How can you be sure if you do not understand the technology, legal contracts, vertical real estate valuation, antennas, powers and telco, utility easements, backup power generation, etc…
Our team of lease experts used to work for the other side, so we know what is at stake and can help you maximize the opportunity to re-evaluate your contract. Remember, for every $300 you leave on the table, you are actually losing $171,271 over the life of the lease. Don’t do it alone.
“What Are They Doing To My Property?”
Ask yourself this question: “Do I truly understand what they are doing to my property?” If your property has evolved to become a major cellular traffic hub and additional equipment and lease extensions are required to preserve that advantage for your wireless tenant, are you being fairly compensated for it? How will you know what represents fair compensation? What you historically received is a poor indicator of market value unless you know the extent of cellular traffic and data capacity and what other landlords of similar properties/locales/traffic are receiving in rent. If you are not sure, then don’t do this alone. Let us help you clarify what is fair in your specific situation.
We often find that tower companies and wireless carriers insert additional terms limiting landowners’ rights, secretly hiding them in plain sight. For example, a wireless carrier innocently put in a Most Favored Lessee clause. On its face, it is innocent enough until another carrier comes on to your property and negotiates a lower rent because the equipment conditions are different. They may have more advanced equipment that requires fewer field visits, fewer antennas, lighter equipment, or less space. All of a sudden, you are now required to open your books to allow the existing carrier to audit what your new rent agreement is with the new carrier. They will demand that you lower your rent to match the new carrier’s lower rent. What happens when the new carrier leaves after a few years? Are you able to get the old carrier back to a higher price? Not likely. Yet, property owners will almost always miss this. And this is just one of the many terms that are placed in rooftop or cell tower lease agreements. Carriers like AT&T and Verizon, or tower companies like American Tower (ATC) are multi-billion dollar companies with thousands of lawyers at their disposal. They have learned much about cellular site leasing over the past 30 years and have turned their innocent-looking contracts into an art form to unsuspecting landlords. We know, because we used to be one of them. Now we are on the others side, working only for landlords. We know this business well. Let us help you get the most out of property.
By agreeing to a dozen of these new terms that carriers and tower companies have included in the past decade you have unknowingly put yourself at a serious disadvantage, which is why you should not negotiate these technology/property leases by yourself. Even those landlords who are represented by lawyers miss out on certain nuisances because most lawyers do not understand wireless technology and its evolution as we do. We find that working in conjunction with your lawyer, combining our industry expertise with the legal representative that you trust, will give you ultimate protection and advantage in negotiating any lease extensions and modifications with wireless carriers and tower companies.
Generous Offers Of Deceptive Signing Bonus. Here is an innocent letter sent from a wireless tenant to a landowner, offering him $7,500 for apparently no reason. The landowner was very happy to have received this letter offering him free money, but the landowner, a savvy financial professional, knew that the money must have come with a catch, so he contacted us for advice. For the next few weeks, we thoroughly performed our homework in the area and discovered that a new carrier is looking at building a new cell site on our client’s property and needed ground space for equipment and a new tower because the existing one is full.
We instructed our client to reject the $7,500 offer and ignore the tower company’s offer entirely. We then engaged in direct negotiations with the wireless carrier, resulting in substantial monthly lease revenue for our client. Over the course of thirty years, the revenue stream is worth $1,300,000 to our client over the course of the lease. If he chooses to sell his lease immediately, we could have secured Wall Street investor bids to obtain the highest lump sum payment for him. Had he taken the $7,500 offer, he would have lost it all. This is an example of why landlords should never do this alone.
Did you think that it was “accidental” that this giant corporation was about to divert $1,300,000 away from our client into their own corporate accounts? The ugly truth is someone at a headquarter somewhere instructed their teams of hundreds of leasing managers to look for these opportunities and “steal” them from landlords. All this, of course, is legal. Corporations have to do this because they must pay salaries, expensive office spaces, bonuses, stock options, private jets, retirement plans, and shareholder dividends. And their strategy is to take it from landlords whenever possible.
Know Your Limits. We have assisted very sophisticated commercial property owners correct serious mistakes on leases they had signed even decades ago on many of their buildings. While they know real estate, we know wireless technology. If real estate lawyers and experienced commercial property owners are frequently unable to negotiate the best terms for themselves, what is the probability that you will be successful in getting the maximum wireless value out of your property? Let us help you. Mr. Satish Patel controls over a dozen coveted hotels in one of the most expensive cities in the world, and he has this to say about us: Having CellWaves represent us was “far more beneficial than most property owners may appreciate.”
Tower companies and wireless carriers bank on the fact that many property owners do not understand technology. It is true that the average wireless property owner is 60 years old, is a commercial real estate owner/developer (commercial rooftops) or rural property owners with acreage or farm land (cell tower). They almost always do not possess the technical, legal, and real estate expertise to match the team of 30 people required to develop and build a cell site. Each tower company personnel is highly specialized in their field. And they all will support their employers, be it wireless carriers’ or tower companies’ by saying the right things to you get you to accept as financial and non-financial terms that are most favorable to their employers. Here is the game that is played:
- An architect and engineering representative (A&E firm) (who gets 20 sites contractually assigned to them at a time by AT&T – worth $600,000 to him) will promote AT&T’s agenda so they can get more work in the future, may say to the property owner “I may get fired for sharing this with you, but I heard that the property next door is willing to accept $800 a month for us to be on his property.” That is all the bug they need to put in the landlord’s head to affect the outcome of the lease discussion (it isn’t a negotiation because they are controlling all the terms.)
- “Is Bill Johnson your neighbor? Because he just signed a lease with us for $900. We could be here, or we could be there. It really doesn’t matter.” Often, a lease option was signed with a neighbor as a way to establish market value with an unsuspecting property owner even though the tower company or wireless carrier has no intentions of exercising that lease agreement. Are you a “Bill” or are you the “Primary Candidate”? How can you confirm this? How can you make your property the Primary Candidate?
- “Your property is fine, but it will be very expensive for us to run power and telco to this location.” Or “Your soils condition will be expensive to build.” “Access for our equipment will be difficult because there is inadequate turn around space.” This is designed to make you feel bad about your property, and the way you compensate for the wireless carrier is to lower your rent, or reduce your expectations on non-financial terms.
Let us help you sort through this complex technology and process. Contact us anytime.