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    1. Smart Buildings

    What’s On Your Roof?

    Feb. 27, 2003
    Wireless Changes May Impact Your Rooftop Revenues
    Up on the roof may have been a romantic place in song, but to many building owners and managers, rooftops are valuable real estate, generating substantial revenues from wireless service providers.Recent difficulties in the telecommunications industry have created conditions that alter this financial picture. If you have existing rooftop tenants, here are some issues that you should consider in order to get a better financial picture for your building and help ensure that you are not missing any potential revenue opportunities:Bankruptcies of companies such as Metricom and Teligent have resulted in equipment “abandoned in place.” If this has happened with one of your tenants, what should be done with this equipment? Should it be left in place? Can it be re-sold?Other wireless service providers are expanding their sites, adding antennas and equipment cabinets. Do you even know if this has happened? What is the impact regarding zoning permits? Structural evaluations? Radio frequency (RF) exposure? Should their rent increase as a result?Mergers and acquisitions in the wireless industry may mean that you have different lease terms for different equipment for what is now the same company.If any one of these scenarios is applicable to your rooftops, you should first review the lease terms. You need to understand what your rights and obligations are regarding abandoned equipment, failure to pay, and exactly what each tenant is leasing. Do the terms specify a number of antennas? A precise square footage or location on the rooftop? Most leases include drawings that specify the amount and location of equipment covered by the lease. You may wish to review these issues with your attorney.Now you need to conduct a physical audit to know exactly what is on your rooftop (or elsewhere in the building covered by the leases, e.g. in a penthouse building or equipment room). If tenants have access to the building, they may have removed or added equipment without your knowledge. The audit should provide an inventory, drawings, and photos showing exactly what is on the roof – not just antennas, but equipment racks or cabinets, antenna mounts, cable trays, power supplies, etc.Next you should compare the lease terms with the audit results. This will tell you if you have any abandoned or additional equipment, and you can begin the process of disposal, resale, or renegotiation, and assess the need for any further action, as applicable.If you have multiple wireless tenants, it may be difficult to determine exactly what equipment belongs to which service provider, what is in use, and what is abandoned. And due to the specialized nature of the equipment, you may not have the expertise to assess what is reusable or resaleable. In this case, it may be wise to hire an outside firm that specializes in gathering this information. The right firm should also have knowledge of the industry to advise you not only on what you have, but what you can do with it, as well as any regulatory implications.Given the changes in the wireless industry and the need for all building owners and managers to maximize the revenue from their properties, periodic reviews of your rooftops just make good business sense.Christine A. Malone is president at Comp Comm Inc. (www.compcomminc.com), Voorhees, NJ.

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