Voted Best Answer
Nov 21, 2022 - 11:31 AM
It is a great question. This is similar to what the cellular providers have gone through when trying to enter into leases for small cells attached to rooftops in NYC. In our experience with our clients who own buildings in Manhattan, they have a hard time seeing the value in entering a long-term lease that binds the landowner and restricts the use of their building/redevelopment for hundreds of dollars per month. The fees to have their attorney review a lease make it hard to justify - especially if the lease is from an unknown company with an unknown business plan.
The key is minimizing friction with the building owner. Using a simple lease that gives the building owner the assurances that make it worth the time. Here are a few suggestions that might help:
1. Prepay for the first year or two. This helps show that you are vested in the project, too, and won't simply disappear and leave them with equipment. (Look up Metricom- many building owners in NYC still have equipment from that failed endeavor on their rooftops to this day)
2. If you start with a lower rate- but escalate the lease rate at a more aggressive amount over time so that the building owner sees some upside.
3. Use a simple lease document instead of a standard telecom lease. The standard lease document is very one-sided. For a cellular provider paying $2K/month and up, it is worth negotiating. For a smaller provider paying hundreds of dollars per month - not.
4. Don't try to tie the building owner up for the long term. If you can't commit- why should they? While this exposes you to them increasing the rate later, it also reduces their risk of being tied down by a low-dollar lease. If you want longer- you may have to agree to no-termination language for convenience on your part too.
5. Focus on buildings owned by individuals. Corporations won't care about the start-up or the limited income from this type of lease.
6. If you have something to offer to the building owner as a part of the lease, you might consider that. WISPs frequently provide internet service as part of their leases.
In fairness, even with these suggestions, many building owners won't be interested in a lease. I wish you good luck with building out the beta network.
The key is minimizing friction with the building owner. Using a simple lease that gives the building owner the assurances that make it worth the time. Here are a few suggestions that might help:
1. Prepay for the first year or two. This helps show that you are vested in the project, too, and won't simply disappear and leave them with equipment. (Look up Metricom- many building owners in NYC still have equipment from that failed endeavor on their rooftops to this day)
2. If you start with a lower rate- but escalate the lease rate at a more aggressive amount over time so that the building owner sees some upside.
3. Use a simple lease document instead of a standard telecom lease. The standard lease document is very one-sided. For a cellular provider paying $2K/month and up, it is worth negotiating. For a smaller provider paying hundreds of dollars per month - not.
4. Don't try to tie the building owner up for the long term. If you can't commit- why should they? While this exposes you to them increasing the rate later, it also reduces their risk of being tied down by a low-dollar lease. If you want longer- you may have to agree to no-termination language for convenience on your part too.
5. Focus on buildings owned by individuals. Corporations won't care about the start-up or the limited income from this type of lease.
6. If you have something to offer to the building owner as a part of the lease, you might consider that. WISPs frequently provide internet service as part of their leases.
In fairness, even with these suggestions, many building owners won't be interested in a lease. I wish you good luck with building out the beta network.
Add New Comment