This will be the first in an occasional series of of posting describing Sucker Deals offered by wireless companies to their site landlords in connection with cell site lases. Through these postings, I hope that you will gain insights into the sucker punches thrown at landlords by carriers and tower companies. Hopefully, you will learn some tricks of the trade to avoid being tricked by the trade.
These stories come from real world sucker deals offered to our cell site landlord clients by some big American tower and wireless carrier companies.
Now on to our first sucker deal,
“The Illusory Rent Guarantee.”
The set up: The tower company approaches its landlord announcing that the tenant at the site is likely to leave in the next few months. Oh woe is the landlord who is about to lose that income!
The play: The tower company tells you, the site landlord, that they need to add more years on the back end of the lease so that they can go out and attract a new tenant. They might tell you that to attract a new tenant they need to lower your rent because they have determined that they are paying you too much.
The reply: You, the landlord, did not just fall off the turnip truck and cutting rent with an existing, unexpired tenant is senseless.
The counter: They say, okay, how about a rent guarantee? You’re Intrigued! You ask, how does that work? They say that though guarantee five years of rent and trade for no rent cut and a 25 year extension, perhaps with some other terms like a right of first refusal thrown in for good measure.You reply that you are interested, but the rent guarantee. Should not begin until the current tenant leaves.
The sucker deal: They say, NO. The rent guarantee must start immediately upon the execution of the deal amendment. That’s the sucker punch of the sucker deal. What happens if the landlord accepts the deal but the current tenant does not leave (and may have never have intended to lease)? You burn through your guarantee period with no benefit, and the they tower company laughs all the way to their 25 year extension.
You ask yourself the rather embarrassing question, “did I get taken?”
Yeah, you probably did.
Don’t fall for he sucker deal!
Jonathan
