Verizon Tenants Beware of the ROFR They put in Their Leases:
Here is something you need to be aware of regarding the “Right Of First Refusal” found in most Verizon Cell site leases. It is my suggestion to not permit this right to be included in any leases you sign on your Cell site. Here is the reason why. The clause says Verizon has 30 days to respond once notified by you of a pending property sale. Should they, Verizon, not respond, they lose their right to the ROFR. However, that is not good enough if they, Verizon, recorded this ROFR on your property. Just because they do not respond within 30 days will not get this ROFR unrecorded from your Property Title. In order to get the Title on your property cleared of this ROFR, it will be necessary for Verizon to sign a document and have it notarized with language acceptable to the Title Insurance Company and the Verizon attorneys. Now here come the problem. First you can spend weeks finding language that is acceptable. Second, you can spend more weeks getting Verizon to actually get some officer to sign this document, get it notarized and get it to you. I am well aware of this because I personally have worked on getting Verizon to complete this seemingly minor task for over 5 months. This single document held up a 2.5 million dollar tower sale for 3 months. Verizon even notified us that they had no intention of exercising this option early on, but moved at a snail’s pace to complete the final paperwork. The issue here is, there is no motivation for Verizon to get this paperwork completed since it doesn’t affect them whatsoever. There is also no way to get them to move faster other than attempt to get a court order compelling them to sign the document or be held in contempt of court. This process can add many more months to the process and thousands of dollars in legal fees.s
Tower Sites 101:
The word is out. Cell Tower sites can be a real excellent investment. The most important three words to remember in the cell site business is the same as the Real Estate business, Location, Location, Location. The old expression, “if you build it they will come” is generally not something you should subscribe to in the Cell Tower Business unless you are very lucky or are very young with lots of money.
It is true, a well placed Cell site can possibly make you a great deal of money provided you own the real estate or have a great long term lease and have most of the big players as tenants. Currently, the major players in the South East are AT&T, Verizon, Sprint, Metro PCS, and T-Mobile. Through consolidation AllTel and Verizon are now one company, so in this case two became one. Nextel is now a part of Sprint and they will eventually become one site tenant. There was the possibility T-Mobile and AT&T were going to become one, but at the moment that deal is dead. So yes, the revenue stream last year for us was potentially much greater than it will be in the future. Don’t read this the wrong way. I am still high on cell towers as an investment (no pun intended). I just sold one tower and am building three more.
If you are currently a tower owner here are a few things you absolutely must do now if you haven’t already. You must keep very accurate records. In other words, good bookkeeping. Quickbooks Online does a great job for me. Make sure your tower is well maintained and safe. The last thing you want to happen is to be sued because someone fell off your tower. Good fences are well worth the money. Make sure you always have a current tower analysis. If you have AT&T or Sprint, they will be wanting to make changes and additions to their lease with you in the near future. This is a good time to get them to have the analysis done and they will pay for it. Should you get a favorable offer on your tower and the structure is overstressed, this could cost you dearly in the final payoff. Make sure your taxes are paid. I saw a major company’s several million dollar tower sold for penny’s on the dollar, because the taxes weren’t paid.
Don’t let “Black Dot” scare you. If you haven’t heard of them, they are the garbage of the industry using threats to try to intimidate you into reducing rent being paid by AT&T. They will tell you if you don’t reduce the Tower rent to AT&T, AT&T will move off your site to McDonalds or the middle of the Interstate. Their deal is that if you fall for the con game and reduce the rent they get a percentage of the savings to AT&T, and you get paid less. AT&T wins, Black Dot wins and you just gave up some revenue that was not necessary. I am not aware of any site that Black Dot contacted, that because the site owner didn’t reduce the rent, AT&T moved.
This is the first in a series of articles I will be writing on my experience in the tower business over the past 43 years. Please check back for the next installment.
Ron Crider can be reached at 772-913-2209 or at roncrider@gmail.com
. JUST SAY NO TO ROFR for any tenant. That’s my opinion. Ron Crider.