Site Upgrades & Modifications

Carriers are constantly upgrading their cell sites to accommodate increased nationwide consumer demand and to account for technological advances. Despite these additions to the lease, Carriers typically offer to pay little to no rent increase while also including additional language that only benefits them! Many times, we find that equipment upgrades are being completed under the guise of routine maintenance. Carriers often use third-party contractors to complete Site Upgrades and these contractors are under tight deadlines, so they often overlook contractual requirements to meet demand. Many times, Site Upgrades require that carriers seek owner’s written approval, consent or a modification of the agreement terms that could mean additional rent or payments due to you.

Fortunately, upgrades usually require owner’s approval – This means there may be a unique window of opportunity to “remedy and amend” the original lease and improve the overall financial value.

We will determine if the proposed upgrades and/or modifications to the carrier’s equipment is within the legal lease entitlements. If not, then an amendment and rent increase may be warranted.

Site Audits & Inspections

of the contractual rights, obligations and limitations under your wireless lease and analyze the equipment on the roof/tower to ensure it complies with such agreement. In limited cases wherea physical site inspection is required, we will coordinate a site visit to photograph, measure and document the equipment within the site. We will inform you of your rights under your lease and if it is determined that the carrier is operating outside their legal lease entitlements, we’ll engage the carrier, coordinate negotiations and handle your behalf.

New Site Lease Proposals

Think, is there anyone today that does not carry their cell phone on them most times and rely on it for navigation, web searches, email and even phone calls? Therefore, wireless carriers must continue constructing new sites that will fill coverage gaps and/or relocate existing sites that no longer meet technical requirements. So how do property owners capitalize on this opportunity to capture new cell site revenues and/or not lose existing rent to an owner across the street?

Carriers have several criteria with respect to new or relocated sites, with “speed to market” and financial considerations often being the driving forces in their decision:

Does the proposed site meet RF engineering (radio frequency) requirements within their ever-changing network?

This is typically the primary factor with the rent and terms being secondary.

Will the landlord be receptive to the new revenue opportunity and have reasonable expectations about rent and other lease terms?

For example, if an owner has unrealistic rent demands then the carriers may simply move “across the street” to another viable candidate. But if an owner is too accommodating they may leave significant revenue on the table. WREP can help you strike that strategic balance.

Will the landlord make their decision quickly and not hold up the process?

Your objective should be to get WREP involved when you are first approached so we maintain your leverage and we can engage with the carrier and their representatives to give you the best opportunity to capture and maximize this new revenue.

Rent Reductions

Wireless carriers such as AT&T, Verizon, and Sprint/T-Mobile along with tower companies like American Tower and Crown Castle, often hire third party rent reduction firms (that represent that they act on behalf of the carriers) to pressure wireless property owners to reduce their rent and escalator or face possible site termination. The goal of these companies is to decrease the overall lease cost for that site by getting property owners believing that their site rent may be imminently decommissioned. These rent reduction firms are often compensated by the carriers depending on the savings they can provide them, even when the carrier has no real intention of terminating their agreement. Nonetheless, unwitting Property owners, fearful they may lose the site rent entirely if they do not agree, often consent and end up with substantially reduced rents.

That said, it is important to understand that although a typical wireless lease has a 25-to-30-year term, virtually all wireless leases can be terminated by the carrier with as little as 30 to 90 days’ notice. In other words, cell site rents are rarely ever guaranteed and sites do get terminated due to a variety of reasons such as:

Emerging technologies like small cells that make certain macro sites obsolete.

Excessively high market rent for a given site compared to others nearby.

Carriers merging networks leads to duplication of coverage; redundant sites can be targeted for decommissioning.

It’s always important to assess these risks so that a valid strategy can be implemented.

Given the 30-to-90-day lease termination clauses and the other potential risks for decommission, it’s always important to assess these risks so that a valid strategy can be implemented. When faced with a rent reduction proposal, it is important to have WREP address the issue and determine the carrier’s motivation. Although carrier’s may have termination rights, they do not always wish to activate them given the costs of relocating and the reduction in network coverage from losing key sites.

Therefore, WREP encourages landlords facing a rent reduction not to immediately succumb to pressure tactics until our firm can evaluate the risks using our expertise and decades of industry knowledge. We will leverage our relationships and industry experience to assess the likelihood of a site decommission for our client and work together to implement a strategy.

Another strategy employed by carriers and their rent reduction counterparts is to use this nerve-wracking time for the owner to add seemingly benign amendments in certain agreement amendments that may limit an owner’s contractual rights or ability to increase revenue in the future. Some of the most common amendments sought are the inclusion of a Right of First Refusal for the carrier or allowing for subleasing of space without consent or compensation. Let WREP help you navigate these contractual negotiations, so you optimize your wireless carrier revenue.

Lease Prepayments

Tower companies such as SBA, Crown Castle, and American Tower, along with various private equity firms, are developing a nationwide portfolio of cell sites by purchasing wireless lease rents from building owners. Although these “lease prepayments” (or buyouts) can be very lucrative – most owners simply do not possess the necessary knowledge of the industry to determine their site’s fair market value and negotiate an optimum deal. This would be compared to selling a traditional piece of real estate for sale by owner, on a property type and location you were not familiar with or purchasing a used car without the assistance of trained mechanic.
Note: Having a Right of First Refusal added to your lease may greatly reduce its future value and/or restrict your options when it comes to a lease prepayment.

Wireless data and information, compared to that found in traditional real estate, is not readily available to owners and this fact is not lost on the opposing transactional parties. These entities always seek to take financial advantage of this “knowledge gap” to drive deals in their favor through lower overall pricing and better business terms. Consequently, owners often unintentionally leave money on the table and agree to terms that are less than favorable.

Key Points about Prepayments:

Every site is different

Due to the type of carriers, rents and escalators, lease clauses, market conditions, location, etc. one cannot simply compare what a nearby site owner received and expect the same. “Comps” do not work the same as they do in standard real estate transactions due to many other technological and geographic characteristics that are unique to wireless sites. There is no such thing as a “comparable” sale in wireless.

This is a commission driven industry

For example, a buyer or investor (wireless carrier or third-party) that offers $300,000 will not tell an owner that they could pay $350,000 or more. Their interests are diametrically opposed to yours, i.e., they want you to sell for as little as possible and will not reveal their “financial ceiling”.

Every investor has limits on what they can pay for a given site

Every investor operates in a unique financial “box” defined by their company and their investment criteria. For instance, one investor may be capped by their investment criteria at $300,000 while another can pay $350,000 or more. We will help you maximize your value by working with industry leaders to obtain the best price.

This financial “box” changes constantly as their portfolio needs change

An investor may pay one price one month for your site, but then pay more or less several months later as they need more of your “type” of site for their portfolio or as industry changes (i.e., mergers, etc.) occur. Our industry involvement keeps us abreast and up to date on these changes so we can help determine the best players to engage and best timing for your site value to be maximized.

Think WREP for all your wireless carrier needs. We’re on your side.

Owner Advocates – focused on increasing value and enhancing revenue from your existing wireless lease agreements.