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Emergence of Smart Buildings Mobile telecommunications example Tall buildings provide perfect locations for mobile antenna sites and equipment shelters Roof space is leased by mobile service providers under long-term, triple-net leases Basement space is leased for data center operations. Riser space is leased to connect basement operations with rooftop equipment
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Andrew J. Schlidt III
Emergence of Smart Buildings Smart buildings:• Deploy Emerging Technologies• To Improve Quality of Services• And Create Revenue Streams• Often involving a grant of real estate rights to
the vendor.
Emergence of Smart Buildings Mobile telecommunications example• Tall buildings provide perfect locations for
mobile antenna sites and equipment shelters• Roof space is leased by mobile service
providers under long-term, triple-net leases• Basement space is leased for data center
operations.• Riser space is leased to connect basement
operations with rooftop equipment
Is Your Building at a Height Disadvantage? Don’t Worry.
Multi-tenant commercial buildings• Tenants with high-speed data needs• Require high-speed fiber optic networks
Fiber vendors• Willing to pay for access rights to place fiber in the riser
spaces Telecom vendors
• Willing to pay to lease space in the basement to develop networks hubs and data centers to serve customers inside and outside the building
Smart Building Transactions: IT + Real Estate
IT Deal• Traditional IT deal components• Unique IT deal components
Real Estate Deal• Traditional real estate deal components• Unique real estate deal components
Smart Building Transactions: IT + Real Estate
Role of IT Procurement• Recognizing uniqueness of deal• Marshaling internal real estate resources• Managing subject matter experts• Negotiating deal points• Incorporating a BAA
Building Access Agreements Purpose of a Business Associate Agreement:
• To limit a vendor’s rights of access to your facility• So that only necessary vendor parties have access• To provide mutually agreeable service to you• And not unauthorized third parties for commercial gain• In a manner that avoids clouding title to your property• And maintains the physical condition of your facility• Throughout a limited term and at the time of exit• Without granting exclusive access or service rights.
Risks of Not Having a Good BAA Without a good BAA the building owner risks:
• Losing control of its property – risers, basement, and roof.• Being held liable for claims between competing vendors. • Clouding title to the property• Assuming liability for property damage of vendor• Assuming liability for lost profits of vendor
Where are BAAs Commonly Used? BAAs are common in:
• Metropolitan areas on the East and West coasts BAAs are less common in:
• The Midwest, where owners typically have invited vendors to use the building at no cost; however, that is changing
Conclusion
IT deals increasingly include the grant of real estate rights to vendors. The role of IT procurement will need to be aware of the real estate implications of the deal, which can often be managed through a Business Access Agreement.
Questions?
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