Cell Tower Lease - Right of First Refusal (ROFR)
Many new cell tower leases, antenna site leases, or lease extensions contain a provision entitled a "Right of First Refusal" or a "ROFR". The idea behind a ROFR in a cell tower lease is that it protects your cell tower tenant from any lease buyout company who may want to buy your lease. These buyout entities then manage the lease more aggressively than most property owners.
While the underlying concept of a ROFR may be fine, there are many factors a cell tower landlord must consider before agreeing to this provision. Some sample considerations are:
- A ROFR may decrease the value of your lease to potential cell tower lease buyers.
- If you want to sell your cell tower lease when a ROFR is in effect, some lease buyout companies may not be interested in making an offer because they know that the cell tower tenant only needs to match their offer to win. This limits competition.
- Some ROFRs require notice to the tenant of ANY offer to purchase the property. The typical time frame a wireless tenant has to respond is 30 to 60 days. This means you cannot accept an offer from a potential buyer of your entire property until your cell tower tenant has decided to not execute the ROFR. Not all buyers will wait 30 to 60 days for an offer to be accepted.
- Some ROFR's are worded in a way that would require that you provide the tenant an opportunity to buy your lease following your receipt of any offer - even if the offer is unsolicited.
- Many ROFRs do not require that the cell tower company actually match the offer.
- Some ROFR provisions allow your cell tower tenant to dismiss portions of any offer that they believe are included to undermine their ability to match the offer. (i.e. revenue sharing offers on future tenants, termination rights, etc.)
- Some ROFRs may allow the cell tower company to discount any competitor offers – and you can’t stop them!
- Recent ROFRs have added provisions that allow your tenant no only to match the offer, but allow the offer to be discounted based on certain factors - even though the value of the cell tower lease buyout is typically based off the revenue from the cell tower, not any additional space.
GCCSS is a consulting group focused solely on the interests of property owners who manage cell tower leases. While we understand a wireless tenant’s desire to protect their interest in a cell site, we also understand the importance of property owners retaining the right to control their property. We have developed a mechanism that allows the cell tower tenant to be informed of any offers affecting their lease, while still allowing the property owner to control any decisions involved in selling the cell tower lease or the property as a whole. For questions regarding cell towers, rooftop antenna sites, or wireless infrastructure, please contact us.
Tags: cell tower lease, cell tower lease buyout, Right of First Refusal, Cell Tower Lease Extension
The Importance of Proper Rooftop Antenna Installation
In other recent articles (found here and here) we have discussed the importance of rooftop wireless leases, and proactive management by the property owner or property manager to ensure rooftop damage does not occur. Today's article is coming from the other side of this topic - we will review some of the damage that can be caused by improper rooftop installation techniques, and passive management.
Recently a property owner with rooftop wireless leases (or rooftop cell tower leases) approached Gunnerson Consulting for assistance with his wireless tenants. He felt their antennas may be causing damage to his rooftop, but wasn't sure where to start. As the members of Gunnerson Consulting have decades of experience in this arena, we were able to help him uncover the depth of the damage.
Warning: the following images are not for the faint of heart!
The first image comes from the underside of the roof surface below the cellular antennas, and gives a little insight of what is to come:
As we moved our cameras around the supporting rafters, the gravity of the situation begins to unfold:
From the images above, it was clear that we needed to open the rooftop:
While wireless carriers should take every precaution to ensure their rooftop installations do not cause lasting damage to building structures, property owners typically retain the ultimate responsibility for their buildings, and MUST be actively involved with their rooftop installations to ensure they are not faced with this type of situation. Gunnerson Consulting can assist property owners in the review of rooftop installations and in the resolution of issues that arise from rooftop wireless antenna installations. Contact us today for additional information.
Rooftop Antenna Mounting
Rooftop Antenna Mounting
Rooftop antenna sites are a great revenue source as it allows you to generate income from an otherwise un-leasable portion of your property - your roof! If the cellular antennas are installed correctly and proactively managed, the rooftop antenna site can be a good source of income with very little headache.
Our experience has found that most property owners are not familiar with rooftop antenna installation methods, and in many cases property owners leave the methods of installation to the judgment of the wireless tenant. The wireless tenant relies on a network of contractors who are tasked with getting the work done on time, and under budget. Many times the property owner doesn't ever see the rooftop installation, or if they do, knowing what is normal is difficult to ascertain without having experience in other sites.
Rooftop antenna installations come in many different varieties, some better than others. The following are three examples of rooftop antenna installations that we have seen recently.
Rooftop Antenna Site - Gravity Mount
In this particular installation, the engineer called for 700 pounds of weight to be added per side (3 sides, = 2100 lbs) to ensure the antenna structure remained in place.
Benefits of this type of installation are no punctures to the roofing surface.
Downside of this type of installation is that it adds significant loading to the roofing surface. Additionally, as equipment is added to the cell site, "ballast" weight may not be removed to compensate. This continues to increase the loading on the rooftop.
Rooftop Antenna Site - Attached to Roofing Structure
In this method of installation, the antennas are mounted directly to the roofing structure.
Benefits of this type of installation are less weight added to the rooftop.
Downside of this type of installation is that the roofing structure is penetrated.
Rooftop Antenna Site - Attached to Building Structure
In this type of installation the antennas and equipment is mounted to the building structure such as a parapet or elevator penthouse.
Benefits of this type of installation are the roofing surface is not penetrated, and all cabling is out of the way allowing for easier roofing repairs and maintenance.
Downside of this installation is the equipment will be more visible from the street, and it requires a large enough parapet surface for the equipment to be mounted.
Rooftop antenna site upgrades also need to be carefully considered and reviewed. While upgrades may be "minor" to wireless carriers, they can add hundreds of pounds of weight to your rooftop. This additional weight should be considered prior to its addition to determine the impact on your roof. Make sure the structural analysis performed on your site includes calculations determining whether your roof can support the proposed weight.
Whether you have an existing rooftop installation, or are in the process of negotiating one, take the extra time to consider all the installation and upgrade options necessary for your building. Consulting with an industry professional may save you thousands in the long run.
If you have questions regarding an antenna installation on your property, we offer no-obligation initial consultations. Click here to contact us today.
Rooftop Antenna Site Management
Rooftop Antenna Site Management
Rooftop cell sites or rooftop cell tower sites, more commonly called rooftop antenna sites, should be monitored in a completely different manner than traditional cell towers. Cell towers are typically (but not always) mounted on bare ground, while rooftop antenna sites are mounted on your building. The potentials for damage are high if not monitored correctly.
Upgrades to a cell tower are typically not of concern to property owners as they simply add loading to the tower. Rooftop antenna sites must be watched more closely as any additional loading adds additional equipment, weight, and stresses to the rooftop.
The very first step in managing a rooftop antenna site is to make sure you completely understand what your tenant intends to do on the rooftop, and what it entails. Where will the equipment go, what options are available to you, and how will it look. There are many options, but many times the site acquisition person you are working with may not know what can be done, or they may not have the time to walk through the variety of options and requirement that are needed.
The second step is to ensure your rooftop antenna site lease has a mechanism for tracking the amount of equipment on the rooftop. This MUST be done by those familliar with the industry in order to anticipate how the site could expand over time. Our firm regularly consults with attorneys on provisions necessary to wireless leases and the impact of many provisions over time. A little foresight at the beginning of a wireless lease can save tens of thousands of dollars down the road.
The next step is to have open communication with your rooftop wireless tenant; meaning that they communicate with you regarding anticipated upgrades, and that your agreements gives you the ability to coordinate those upgrades. This requires that the proper verbiage has been added to your lease.
Gunnerson Consulting and Communication Site Services (or GCCSS) has experience with all types of cell towers, rooftop antenna sites, water tank antenna installations, as well as a variety of other types of installations. We have seen what can happen with poor oversight, as well as the low maintenance income stream these leases can be if managed properly.
Click here to contact us today for a complimentary review your cell tower or rooftop antenna site lease. Initial consultations are always free.
Cell Tower Lease Renewal and Rent Renegotiations
Cell Tower Lease Renegotiations
We recently heard from a property owner who had been approached by a "wireless consultant" for his cell tower tenant to renew the cell tower lease on his property. The conversation had gone something like this:
Consultant: We'd like to renew our lease on your property.
Landlord: Ok, what did you have in mind?
Consultant: We normally look to reduce the rent on your site, however we are willing to keep things the same if you sign a 30 year extension and don't make any changes to the lease amendment we give you.
Landlord: I believe your rent should go up.
Consultant: That would be unacceptable. If you aren't willing to extend the lease as is, I'll tell your tenant to take the tower down.
When we questioned the consultant, he immediately backed down and restated his position that the tenant makes the decisions regarding decommissioning towers, he only made recommendations. Unfortunately this approach is not an isolated event. We see numerous cases where property owners have accepted rent at below market rates, or have been approached by their cell tower tenants for rent reductions. While some rent reductions are justified, those instances are rare. We have seen wireless consultants approach property owners regarding rent reductions at both the high and low end of market rent. Except for a few rare instances, we have not seen any evidence showing that a property owner taking a rent reduction does anything other than save money for the cell tower tenant.
We can help you make sense of these situations. Call or click here to contact us today.
Rooftop Antenna Site Leases
Rooftop Antenna Leases
Twenty years ago property owners never would have thought building rooftops would be a potential income source. Today there are thousands of cellular or other wireless rooftop leases across the country. For those property owners who have these leases, it can be a boon - or a boondoggle....
Rooftop antenna site leases are great in that a property owner can generate income from a portion of the property that is not otherwise leasable. It can also be problematic as the rooftop protects the rest of the property from the elements, and rooftop antenna site leases tend to increase the wear and tear on the roof.
For example, there are multiple methods of installing rooftop antennas. The methods proposed by the wireless tenants may not take into account future rooftop maintenance or an installation method that would minimize impact to the roof. Property owners typically don't knows what installation options are available, simply because this is not something that property owners have much experience with.
Additionally, most wireless carriers and cell tower companies use contractors to perform all work on their cell tower and rooftop antenna sites. This means that your tenant rarely, if ever, physically visits the rooftop wireless site. The cell tower contractors are directed to perform maintenance work quickly, and within budget. They are not familiar with your rooftop and any special care needed. If a property owner is not watching installation methods, weight loading, and other uses of their roof by their cellular or wireless tenants, no one will be.
Some property owners have told us they were not initially concerned about any issues with their wireless rooftop tenants because any work on the roof was permitted through the city or county, and the tenants always performed structural inspections. Most property owners are not familiar with the process of installing or upgrading a cellular antenna on a rooftop, and trust their wireless tenant to perform the work properly. In our experience, this is not always the case.
Even in light of the above, rooftop wireless leases are still an excellent source of income, if (i) the wireless rooftop lease is written in a way that protects the property, and (ii) the rooftop is managed proactively.
Gunnerson Consulting has extensive experience with rooftop wireless leases. Our experience shows that active management, with attention to details can not only provide fewer problems over the term of the lease, but also a more profitable lease for the property owner.
If you have questions about your rooftop wireless lease, click here to contact us for a free initial review.
Rent Reduction Requests
Rent Reduction Request
Out of the blue, you receive a letter from your cell tower tenant. The letter states they are reviewing the market rent for cell sites in your market, and they may be terminating some above market cell tower leases. They claim your cell tower lease rate may be much higher than cell tower market rent, and you will receive a call from one of their "consultants."
When the consultant calls, he tells you that your cell tower or antenna site is unnecessary, and your tenant may need to shut the cell tower or rooftop antenna down. He continues that you may be able to avoid this if you are reasonable and agree to reduce the rent. In fact, if you are willing to do so, your cell tower tenant will guarantee not to terminate your cell tower lease for a fixed period of time.
Sound reasonable? NO!
Cell Tower Rent
The unfortunate truth is that, for the average property owner with a cell tower lease, there is no way to verify if a wireless tenant is telling the truth. Very rarely will the wireless tenant show an average cell tower rent paid on sites in the area, and if they do it is likely that you will not be given full information.
Gunnerson Consulting (or GCCSS) has seen too many of these transactions result in unnecessary reductions in rent - many bordering on being predatory. We have seen people from all walks of life accept rent reductions requests, or "lease optimization" requests from cell tower or rooftop wireless tenants.
Cell Tower Lease Rates
GCCSS has experience with thousand of cell tower and rooftop leases, and backed by our proprietary databases, we have the ability to compare cell tower lease rates and other important cell tower factors both locally and nationally, and can determine not only if there is any reason to accept the reduction, but also review your cell tower lease for opportunities to increase the rent or improve other terms!
Do NOT sign a rent reduction request or lease optimization request with your cell tower tenant or rooftop tenant without having an industry professional review the terms.
Equally important is who you choose to have review your cell tower or antenna site lease. There are many "lease consultants", however many perform work for both property owners and the wireless carriers. Just as you wouldn't have a used car salesman's mechanic inspect a car before you buy it... If a consultant receives the majority of their income from a wireless carrier, how unbiased can their opinion be?
GCCSS only works for property owners and wireless landlords. Click here to contact us for a free, no obligation review of your situation.