Generating Revenue Through Telecommunications Equipment: Options for Self-Storage Property Owners
|Copyright 2014 by Virgo Publishing.|
|Posted on: 08/08/2011|
By Hugh D. Odom
Like many property owners, self-storage operators are always seeking ways to generate additional revenue from their investment. One solution is the placement of telecommunications equipment. This could be cell towers, rooftop equipment, an internal switch, or even distributed antenna-system equipment that can be placed inside existing storage units.
For the most part, self-storage facilities are ideally suited for the placement of this equipment for three reasons:
If self-storage facilities have these advantages, why don’t more of them have telecommunications equipment on their premises? The simple answer is the right people have to first know your property is available.
Most people think the major telecommunications carriers (AT&T, Verizon, T-Mobile, Sprint and Cricket) are the points of contact for the placement of telecommunications equipment on a property. They’re not. While it’s beneficial to have connection with these companies, to make any headway in getting your site selected, you really have to know the right people inside these entities, the ones who make the decisions. Here are your options:
1. You can hope a carrier, tower company or one of their representatives knocks on your door and offers to place equipment on your site. Even so, how do you truly know the value of your property as it relates to its use as a telecommunications hub? Or the value of the revenue center created through the subleasing of space on your property? Remember that while this type of transaction has a real estate foundation, it’s truly more of a telecommunications transaction, and the terms and value should be set accordingly.
2. You can work with a company whose sole purpose is building telecommunication sites, referred to as a “land-banking” company. It’ll shop your property around to see if it can build or place equipment there. If it finds an interested party, it’ll pay you a fraction of what it’s going to receive from the carrier. Beware of these companies, as their primary motivation is their own interests.
3. You can engage a telecommunications-consulting company to assist with marketing your site so the right people know your property is open and ready for the placement of telecommunications equipment. More important, this company can help you when an opportunity is presented to optimize the situation to its fullest potential. A good consulting company should have contacts throughout the industry, not just on the tower side of the business. It should also help to ensure you get the most out the transaction while giving up the least.
The Lease/License Agreement
For self-storage owners, the placement of telecommunications equipment on site can provide a valuable, steady and virtually zero-cost means of revenue. Most lease or license agreements are with tier-one tenants and long-term in nature. Over their life, such agreements can provide upward of a million dollars in revenue for a property owner.
While the placement of equipment on your property may seem like a simple real estate transaction, mistakes in structuring an agreement can cost you hundreds of thousands of dollars of potential revenue over the life of the asset. A proper agreement will take into account many factors including:
The telecommunications companies or their representatives are not going to assist you with factoring in these variables.
If you’re an owner of a site that currently hosts telecommunications equipment, you may already understand its value. But there are ways to get additional equipment on your property. Even if you have several years remaining on your present lease or license agreement, there may be ways to re-enter those agreements and garner immediate revenue increases.
The Next Step
A self-storage owner has several options if he’s open to the placement of telecommunications equipment on his property. No matter which he selects, he needs to make sure it provides him the best chance to be selected and maximize an opportunity when it is presented. With society’s ever-growing reliance on wireless technology, the need for telecommunications sites will be continual. Self-storage owners who take advantage of this need stand to benefit. Remember, your property is truly only a resource if you use it to its fullest potential.
Hugh D. Odom is president of Vertical Developments, a teleco mmunications-consulting company working with approximately 900 self-storage facilities across North America to place telecommunications equipment on properties and optimize existing telecommunications leases. To reach him, call 615.385.2984; e-mail firstname.lastname@example.org ; visit www.verticaldevelopments.com .