Understanding A Right of First Refusal

 

Increasingly, with many new cell tower leases, and on recent and future amendments to old leases, landowners are being asked to agree to a “Right of First Refusal” or “Rental Stream Offer” provision. These provisions are easily overlooked by landowners who are more focused on their immediate financial concerns; however, agreeing to a right of first refusal devalues your property as a whole, restricts your future bargaining power, and revokes your freedom of choice when it comes to selling your assets.

Lease optimization companies such as Black Dot Wireless, Md7 and the Lyle Company are often the entities contacting landowners. It is crucial to remember that these companies are not working to optimize your lease! They are paid by the tower and telecom companies to optimize the lease for your tenant at YOUR expense.

A “Right of First Refusal” or “Rental Stream Offer” provision works like this: If you desire to sell your property or your right to receive rents to a third party, you must report the offer to your phone tower tenant. Your tenant then will have a set amount of time to match the offer and acquire your property or rental stream itself. Wait, what if you are selling your property to a member of your family at a good deal? Well, unfortunately that great deal just went to a multi-billion dollar company.

The reason why tower companies, like Crown Castle and American Tower, as well as communications companies, like AT&T, Verizon and T-Mobile, want you to sign a right of first refusal or rental stream offer is simple: they do not want to negotiate against other industry experts.

Communications industry experts, like those at Vertical Consultants, can identify the value of the tower site, and use this information to achieve optimal rental income. In fact, the lease experts at Vertical Consultants, on average, more than triple landowner rents. While the cell tower lease experts at Vertical Consultants only seek to optimize your rents, other companies seek to optimize their own personal gain. Those gains should be yours!

Since the early 2000’s, there has been a boom in cell tower lease acquisition companies. These acquisition companies search for undervalued leases, approach landowners and purchase the landowner’s right to receive their rent. It is important to understand that these acquisition companies are acquiring your lease in order to make a profit. The telecom and tower companies view the inclusion of a right to first refusal as the means of combatting these acquisitions and thereby reducing the potential for having to negotiate with savvy negotiation experts.

If a landowner is presented with a right of first refusal clause, or is approached by a lease acquisition company or lease optimization company, the landowner should proceed with the utmost caution, or contact Vertical Consultants immediately. If you have already signed a right of first refusal, all is not lost!

The agreement does not prevent you from working with Vertical Consultants because we do not desire to acquire your property or rents, and we will never ask you to sell them to us. The experts at Vertical Consultants can still negotiate your rents, and, depending on your individual situation, may be able to have that pesky right of first refusal clause removed or altered. Call us today for a free consultation and for more information on the hazards of lease acquisitions, rights of first refusal and rental stream offers.

In 2014, Vertical Consultants averaged an immediate 343% increase in rents being received by its clients, and since 2010, has been able to assist its clients in the recovery of over 300 years worth of combined underpaid, and, in some cases, unpaid rents and other expenses that were rightfully due to these property owners located throughout North America.

To learn more about our services, visit http://www.celltowerleaseexperts.com or contact Vertical Consultants at info(at)vertical-consultants(dot)com or 877.456.7552.

 

Cell Tower Lease “Market Rent” – The Reality Is, It Doesn’t Exist

“Market rent” does not determine the value of your cell tower lease. Many cell tower landlords are being approached to extend their current leases, and they, unfortunately, continue to rely upon “market rents” that have been set by the same companies who are leasing the land. Relying on so-called “market rents” to determine how to negotiate a new or existing cell tower transaction can cost you hundreds of thousands of dollars over the life of a cell tower lease.

Why? First of all, a cell tower lease is not a real estate asset for the purposes of valuation. Wireless cell phone carriers and tower companies value these leases as telecom assets, and so should you. A property owner should turn the mirror toward the cell tower company and see how valuable the tower site is to them, either through the importance of the cell tower site to them in how it serves their current and future customers, or in the case of a cell tower company that has no customers, how much in current or future revenues they can derive from their tenants on the cell tower.

Every cell tower site has a different value. For example, you can have two cell towers within one mile of each other—both paid the same amount of rent, both leased by the same company and have the same basic lease terms—but they can have significantly different values. This is because value can be based on:

  • Revenue being derived from the equipment located on the tower
  • Revenue generated through sublets at the site
  • Importance of the tower site to the overall wireless network
  • Options the tenant has in the immediate area to relocate the site
  • The costs associated with relocation

Furthermore, cell phone carriers and cell tower developers rely upon these market rents because they are the ones who set them and will continue trying to perpetuate them. If you use their market rents as a guideline, you will not be paid correctly. Look at the 2011 revenue figures in the accompanying chart and learn why:

 

The revenue and profit margins produced by these companies are not only staggering and some of the highest of any corporate sector, but are directly tied to the market rents these companies have been able to maintain for years. This is important for new cell tower leases, but even more so for existing ones.

The cell tower companies know the value of the cell tower lease to you, via the amount of rent they are either offering you or already paying you. Isn’t it about time you know the value of the cell tower lease to the cell tower company?

 

Vertical Consultants offers Free Lease Reviews, Contact Us Today

Proposed Cell Tower in Vermont “Critical for Jobs and Safety”

A private landowner in Putney, Vermont has received a cell tower lease proposal from AT&T to construct a 135-foot cell tower on his land in order to improve service in the area. At this point, the Planning Commission must decide whether or not to allow the tower on residential land. “Local input is important and often helps ensure towers are located in the right places. But we have to acknowledge how critical it is for jobs, tourism, safety, and quality of life for Vermont to have a strong broadband and cell infrastructure. We have to all be willing to put up with some inconvenience to make sure we deliver connectivity to all Vermonters,” states a former resident, as reported in Brattleboro Reformer.

billericamulti3[1]The landowner must seek proper representation to assist him throughout the cell tower lease negotiation process if the Planning Commission approves AT&T’s proposal. Many property owners are being paid below-market value for the use of their land. The primary reason for this is the lack of information and representation provided for these entities. Ample information and representation from a true landowner advocate are key factors these industries need in order to optimize the use of their properties by the telecom giants like AT&T.

(http://www.reformer.com/ci_25033906/shumlin-backs-putney-cell-plan?source=rss_viewed)

Residential Cell Tower Ordinance May Be Amended in Winston-Salem

Winston-Salem’s City Council will meet to discuss amending an ordinance to allow cell tower construction in residential areas. You’ll find cell towers and cell phone tower leases are required in all areas, particularly if consumers would like wireless coverage in their homes. This is in an effort to improve wireless and data services to home consumers in the vicinity. “Nationally, about 30 percent of homes use wireless service exclusively. In Forsyth County, about three of every four calls to 9-1-1 come from wireless devices. The wireless companies – our customers – need to meet their customers’ demands for service and in order to do that they need antennas in multiple locations, especially in areas of high demand,” states a representative from a cell tower company, as reported on myfox8.com.

Winston-Salem property owners need to be aware of the terms of the lease agreement if approached for cell tower placement in the future. It is important to have proper counsel who can work to negotiate terms that establish rights that are beneficial to the landowner while limiting the obligations that same party may have under that same agreement, or more to the point get the most and give up the least. A property owner’s first step will need to be to establish “True Value” of its site and go from there.

(http://myfox8.com/2014/01/30/winston-salem-to-consider-cell-towers-in-residential-areas/)

Library in San Diego Potential Site for New Rooftop Cell Tower

AT&T has issued a proposal to a library in San Diego in an effort to place a rooftop cell tower on the public building. This would yield a cell phone tower lease to the municipality.  There is a need for improved wireless coverage for consumers in the area; however, some residents of the Carmel Valley suburb are not happy about this proposition. The company says the tower will help improve in-home wireless service…the tower would be concealed on the rooftop of the library, and it would consist of 12 antennas, 24 remote radio units and other equipment,” states 10 News.

penthouse cell towerIf the proposal is approved, prior to signing a long-term agreement with AT&T, the representatives of the library must seek proper guidance. Many property owners, including municipalities, are being paid below-market value for the use of their property. The primary reason for this is the lack of information and representation provided for these entities.  Ample information and representation from a true landowner advocate are key factors these industries need in order to optimize the use of their properties.

(http://www.10news.com/news/carmel-valley-residents-opposed-to-atts-proposed-plan-to-build-cell-tower-on-public-library-01282014)

Wireless Improvement Plan to Benefit Vail Residents and Tourists

Early last year, Vail began the process of improving its wireless infrastructure in order to solve connectivity issues with its residents. During the 2012 holiday season there was a major cell equipment overload, sparking the need for local enhancement. Many residents and visitors experienced dropped calls and generally poor service. “Throughout the course of 2013, the town hammered out a service agreement with Crown Castle, a cell tower leasing company, for an upgraded antenna system in town. AT&T was the first client on the system, and in November of 2013 announced that it had begun providing 4G LTE cell technology — the latest version of wireless voice and data service,” states Vail Daily.

As the town of Vail has only seven of its planned 23 cell towers constructed, many property owners are still in need to lease their land. Property owners approached by the telecom or tower companies to utilize their land must seek proper counsel prior to signing any agreement. A property owner’s first step will need to be to establish “True Value” of its site and go from there.

forest cell tower(http://www.vaildaily.com/news/9677919-113/service-vail-town-company)

Cell Tower Rises in Ridgewood, New Jersey Without Zoning Approval

Ridgewood, New Jersey has unexpectedly received a 100-foot AT&T cell tower on a gas station’s property, without formal approvals by the local zoning board.  As it is currently affixed to a trailer, it appears temporary, and is also in close proximity to a permanent 120-foot cell tower in the area. “No one asked permission or if any land use requirements needed to be met. Not billericaverizon1[1]sure why someone thought of placing the tower without planning board or zoning board of adjustment approvals,” states the Village Engineer.

As this is not the standard procedure of the cell tower placement process, it is of dire importance that the owner of the gas station property seeks cell tower consultants to discuss potential revenue from the use of his/ her property. Many property owners are being paid below-market value for the use of their property, and, in this case, may be receiving no revenue at all for the land use.

(http://www.northjersey.com/news/241702631_New_cell_tower_pops_up_in_Ridgewood_without_approval.html?c=y&page=1)

Ranch in Jackson Hole May Add Cell Tower to its Tree Landscape

A new cell tower may soon be added to the largest deeded ranch in Jackson Hole, Wyoming, Snake River Ranch. Planned to be disguised as a pine tree, the 80-foot cell tower proposal has been issued to the county planners by AT&T. As a stealth tower, it would blend in with the surrounding trees, while providing improved wireless coverage to area consumers. “The proposed tower meets Teton County’s goal of a vibrant community by enhancing cellphone service to ensure personal and community safety,” states a Planner from Teton County.

pine treeThe owners of Snake River Ranch must seek proper representation to assist them throughout the mobile tower lease negotiation process, if the tower does win approval. Many landowners are being paid below-market value for the use of their property. The primary reason for this is the lack of information and representation provided for these entities. Ample information and representation from cell tower consultans are key factors these industries need in order to optimize the use of their properties by the telecom giants like AT&T.

(http://www.jhnewsandguide.com/news/town_county/foot-at-t-monopine-cell-tower-review-today/article_55881567-4fc6-5eea-b72f-a91d63c16090.html)

Existing Cell Tower Site May Soon Undergo Transition

Verizon is proposing to take over a Nextel cell tower site, located at a shopping plaza in Rancho Santa Fe, California. The telecom giant is looking to improve its 4G LTE wireless network for consumers in the area. If approved, the cell site would become equipped with several Verizon antennas, along with a new building for an emergency generator. “The planning group said it was approved in support of the development of the phone system in the area. Our job is to help integrate it in, so it’s as least offensive as possible. This one was approved because the generator is necessary for emergency,” states a member of the Planning Board.

If the proposal does win final approval, it is highly important that the owners of the shopping plaza attain proper representation before signing an agreement with Verizon. Many cell tower landlords are being paid below-market value for the use of their property. The primary reason for this is the lack of information about potential cell tower rent and representation provided for these entities.

upview cell tower(https://thecoastnews.com/2014/01/verizon-proposes-cell-site-in-rancho-santa-fe/)

Improved Wireless Coverage for Patrons at Soldier Field

Soldier Field stadium, in Chicago, Illinois has received an upgrade in wireless equipment thanks to AT&T and Boingo Wireles. In an effort to improve coverage available to patrons attending events and games, these telecom giants have added antennas throughout the stadium. This type of installation system is unlike a cell tower, however, will greatly boost network performance to attendees within the stadium. “Unlike a cell tower, it uses more than 250 stealth antennas hidden under speakers and behind signs, outside in the stadium’s bowl and inside in places like the United Club. This is about connectivity. People share those experiences while they are at an event,” states a spokesman for Soldier Field states, via nbcchicago.com.

DASAT&T and Boingo Wireless will see a giant increase in profits as a result of adding more equipment. The landlord must attain proper counsel in order to level the playing field between the cell tower leasing company and themselves anytime there is a modification or upgrade to telecom equipment. If not, a property owner could be signing away certain rights, as well as leaving thousands of dollars on the table in the form of potential shared revenues.

 

(http://www.nbcchicago.com/blogs/grizzly-detail/Soldier-Field-Gets-Wireless-Upgrade-228979451.html)

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