All Forum Posts by: Oliver Pilco

@Tamas Z. There is some great information here. Hopefully I can add some additional insight.

1) Rent reduction is a typical lead off these days. It is best to run a market rent and competitive site analysis for other available rooftops and towers before entering negotiations. In some cases older leases can be in line for a reduction due to high rents as result of high original lease rates and high rate escalators. Generally, the tenant is looking to stabilize long term costs so keep that in mind as you negotiate and push back.

2) Currently there is a strong push for tenants to modify leases to allow them to upgrade sites on an ongoing basis without requiring to pay additional rent or fees. This makes it important to confirm not only the equipment, but also the radio frequencies being used. These can be used to define what is currently occupied and what upgrades can be made  in the future to maximize revenues.

3) Lease buyout is as great option, but be weary of the pitch and process. Longer easements do not equate to better offers or faster closings. These companies derive additional value from their investors for long-term easements beyond 30 years and always make a strong push for it.  Agreements should be reviewed as the language could impact your ability to redevelop the property, restrict any new tenants/equipment on the rooftop, or even restrict the ability to perform maintenance. The easement also need to be specified as we have seen owners grant easements on their entire rooftop by accident, causing headaches.

Typically they will dangle a revenue share structure in order to avoid increasing offers, but in most cases these firms do no have the operational capacity or expertise to market a site to a new tenant; they are strictly investment companies. Having debt on the property will also create the need to get a signoff from the bank, so be prepared for an extended timeline and the possibility of reduced offers.

As mentioned by others, having multiple offers is the best way to get the highest value and depending on the tenant and market, there should be no difference between a rooftop and tower. One final tidbit, there has been consolidation within the lease buyout industry, with many in the industry funneling deals to a few players, which does not always result in the best price or terms.

We have identified over 12 unique buyers for these assets including the larger firms as well as low volume independent investors.

Hope this provides some additional information and please feel free to reach out with any questions.

@Jeff Matt Jeff, I'd be happy to help you. Shoot me a message and we can chat a bit more.

@Spencer Ricks Spencer, I actually have been involved in the acquisition and valuation of over 750 billboards. Are you look at the structures themselves or the land beneath them? I currently represent investors that target both, so would be happy to provide any information.

@Noel Meredith Noel, curious to hear how this played out or if you are still in process. I specialize in the acquisition and valuation of cell tower assets and would be happy to provide any info I can.

@Robbie J. Did you have any luck working with the national companies? Previously we had a portfolio of over 750+ billboard leases and found that there was great variation in leases payments and structures. Some of the key indicators are of course location, restriction on type of billboard that can be built (LED, # of billboard faces, height, size of billboard face, etc.), zoning/permitting requirements/process and the size of the company. Each market is different and it is common for each to have its own real estate manager that is sensitive to different pressure points when negotiating. Best of luck and feel free to send me a massage if there's anyway I can help.

Some great questions and points here. @Tim McGovern I agree. We continue to see zoning changes, permitting requirements, NIMBY and even outdoor advertising bans created which add even more hoops to jump through.

@Lynn Henley @Chet Mazur We also develop cell tower sites which are a different animal. Although there is correlation to real estate due to foot traffic and density, the majority is driven by coverage requirements from the wireless carriers (AT&T, Verizon, T-Mobile, Sprint). Radio signals can be impacted from trees, weather, buildings, usage, etc. so certain sites can provide much better coverage than others. Proper testing would be necessary to determine if a piece of property has any use. We actually do this for property owners and send our RF Engineers out to analyze a potential site. Since we use our own capital and personnel, if a piece of property has some potential we can enter into a management agreement with the owner for future use and structure a deal that could result in additional cash flow and improved service in your location. 

I could bore you with further details, but feel free to reach out.

John,

If you are still interested in learning more I would be open to chatting. I've been involved in buying, selling and structuring portfolios for over 5,000 cell sites. Shoot me a message any time!