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Presenting a live 90-minute webinar with interactive Q&A

Structuring Rooftop Telecom and Cell Tower

Leases: Key Provisions, Subordination

and Other Legal Considerations

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, NOVEMBER 30, 2016

Brad N. Mondschein, Member, Pullman & Comley, Hartford, Conn.

Hugh D. Odom, Founder & President, Vertical Consultants, Nashville, Tenn.

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Structuring Rooftop Telecom and Cell Tower Leases: Key Provisions, Subordination and Other Legal Considerations

Brad N. Mondschein

November 30, 2016

© 2016 Pullman & Comley LLC 6

Review of Contractual Issues Relating to Rooftop Installations

– Premises

– Easements/Licenses

– Commencement Date and Payments

– Option Rights

– Utilities

– Extensions and Termination Rights

– Removal

– Taxes

– Governmental Approvals

– Interference

– Maintenance

PURPOSE OF PRESENTATION

Definition of Premises

Needs to be clearly defined

– More than just “space on the roof”

Exact location as an exhibit

Square foot limit

Include Antenna Space, Rooftop Space, Storage Space, Ground Space

– Allowance to expand space for additional equipment


Easement/License

In addition to Leasing Space, need to provide a right to access the

property

– Ingress and egress

Time of day, interference with normal operations of premises

– Access to risers and conduits of premises to run cabling

– Right to install additional utilities in the building needed for antennas

– Security issues

– Right to suspend license


Delivery and Conditions of Premises

Is the building in “ready” condition

– Plumbing, electrical, HVAC

– Hazardous substances

– Compliance with existing permits and codes

Structural Readiness

– Can the roof support the installation of the structures

– Need an engineering report?

– Responsibility to improve support of building


Term and Termination

Usual Term is 5-10 years

– Usual to have a series of renewals which extends lease to 30-60 years

– Renewal is at the discretion of the Lessee

– Can agree in advance to escalation of Rent upon Renewal or annually

etc.

Usual is that Lessee has right to terminate at any time for any

reason

– Can negotiate a notice period

– Can negotiate a guaranty minimum


Lease Options

Very common among third parties

– Find properties or potential properties for carriers

– Obtain a payment from the carrier for securing a site

Option can restrict roof top significantly for 1-2 years

– Need to limit restrictions

– Payment for Option

– Begin paying Rent at end of Option or terminate Option


Utilities

Antenna Systems need phone lines, electricity, internet connection

and other utilities

– Who is providing them

– Who is paying for them

– Can use be shared with building owner or other tenants

Provide an easement for utility companies to add new services


Taxes and Government Regulation

Antennas are usually Personal Property

– Make sure they are not added to Real Property tax assessment

– Assessed separately when allowed

– Lessee paying for taxes associated with Antennas?

Who is responsible to get permits and approvals

Do not want Lessee’s permit to restrict other uses of the property

Are existing permits sufficient?

Lighting requirements (FAA)

Historic Buildings/Districts

Zoning


Expansion/Change of Installation

Structural Concerns

– Need an engineering report?

Additional Space being used?

Interference with other uses

Governmental Approvals required?


Interference

Common for Lessee to require that nothing will interfere with the

use of the antennas or cause interference with the signal

Can insist on exceptions

– Existing use

– Intended use of the premises

Can include a negotiation clause to resolve disputes over

interference (multi-carriers)


Removal

Is Lessee responsible to remove antennas at end of term

What happens if antennas are not removed

– Holdover Rent?

– Lessor takes ownership?

– Security Deposit required?

Usual Lease clauses

– Damage to property

– Damage to others

– Damage to tenants


Sale or Demolition of Building

Usually requires that all liens must be subordinated to lease and

nondisturbance (SNDA)

Usually requires any property purchaser to take property subject to

lease

Demolition of building is not usually addressed

– Negotiations revolve around when demolition may occur (i.e., 20 years

or 5 years)

– Temporary Cell Site able to be used on property (COW)

Roof Repairs

– Removal of antenna is usually cost of Lessor

– Allow COW

– Can negotiate cost (once every 20 years)


Contact Information


Brad N. Mondschein

Pullman & Comley, LLC

90 State House Square

Hartford, CT 06103

Tel: 860.424.4319

Fax: 860.424.4370

Email:

[email protected]

BRIDGEPORT | HARTFORD | STAMFORD | WATERBURY | WHITE PLAINS

www.pullcom.com

These slides are intended for educational and informational purposes only. Readers are advised to seek

appropriate professional consultation before acting on any matters in this update. These slides may be

considered attorney advertising. Prior results do not guarantee a similar outcome.

These slides are intended for educational and informational purposes only. Readers are advised to seek

appropriate professional consultation before acting on any matters in this update. These slides may be

considered attorney advertising. Prior results do not guarantee a similar outcome.

Rooftop Cell

Site

Agreements-

Valuation and

Market Trends

Hugh Odom

Cell Site Growth

In 2015, there were

9,571 new cell sites

added, raising the total

number of U.S. cell

sites to 307,626

Hugh Odom 21

Wireless data set to increase 300% by 2019;

48% of U.S. households are wireless only

Hugh Odom 22

Rooftop Cell Site-

Purpose:

To build out wireless

network infrastructure in

areas where traditional

macro-site development is

limited

Hugh Odom 23

Industry Focus-

Securing

existing rooftop

leased sites and

developing

new Macro and

Micro sites

Hugh Odom 24

How does a property

owner Maximize

their rooftop

lease/license with a

telecom company?

Hugh Odom 25

A rooftop antenna lease is not a “Real Estate”

transaction…it is a “Utility” transaction

Hugh Odom 26

Determining Utility = Understanding both

value gained and detriment avoided

Hugh Odom 27

There is no such

thing as “Market

Rent”: Every site

has a different value.

Hugh Odom 28

Cell site “Utility” is

“Individual” in nature:

Two wireless carriers

can garner vastly

different value from the same rooftop

Hugh Odom 29

Do not focus on “Monthly Rent”:

Focus on how rent is structured throughout the term of the lease

Hugh Odom 30

3 Key Terms For Maximizing Rent Value:

Time-Space-Use

Hugh Odom 31

Correctly structuring the initial Term of a

cell site lease can provide a valuable re-

entry point for future negotiations

Hugh Odom 32

Limiting not only the

amount of Space,

but the configuration

thereof can add

value in the future

Hugh Odom 33

Correctly defining a

telecom company’s

Permitted Use can

protect your property

and add to the value

of the lease

Hugh Odom 34

Market/Industry Trends

Small Cell Leases/Rooftop Marketing/ Lease Buyouts

.

Hugh Odom 35

Small Cell Leases

Same big problems

just wrapped in a

smaller package

36 Hugh Odom

Rooftop Marketing

The “Pitch”: We can add carriers to your roof

resulting in more rents; the “Reality”: They

can’t

Hugh Odom 37

Rooftop Lease

Buyouts

Offers are becoming

more common, more

misunderstood and

more detrimental

for property owners

Hugh Odom 38

Conclusion

Rooftop Cell Sites-Optimizing Value Is Based Upon

Understanding Utility

Hugh Odom 39

Thank You. Hugh Odom President and Founder Vertical Consultants, LLC 6261 Wild Heron Way Suite 100 College Grove, Tennessee 37046 Phone: (877) 456-7552 E-mail: [email protected] Website: www.vertical-consultants.com

Hugh Odom 40

Documents

Structuring Rooftop Telecom and Cell Tower …media.straffordpub.com/products/structuring-rooftop...The audio portion of the conference may be accessed via the telephone or by using