Cell site landlords across the nation are receiving lease “optimization” demand letters from contractors hired by their wireless cell site tenants effectively threatening early termination unless rent and other concessions are granted. The reasons given by the tenant can range from “our site on your property is not profitable”; “we have too many cell sites in your area”; “due to 5G, fewer cell sites are necessary and your site in on the chopping block”; all the way to “we need to lower the rent because of industry consolidation.” These odious letters often include landlord-hostile proposals such as if the landlord… Read more

One of the most overlooked but vital provisions when negotiating a commercial lease is the “use” provision. The “use” provision should be carefully negotiated at the letter of intent stage to avoid any subsequent negotiation problems down the line. Specifically, the landlord and tenant must understand the differences in the legal impact between (1) the permitted use clause, (2) the exclusive use clause, and (3) the prohibited use clause. As I will show you in the details below, it is critical that these provisions be carefully reviewed and negotiated by lawyers for both sides that have specific expertise in this… Read more

Non-profit organizations (“NPO”), churches and other religious institutions are always looking for consistent streams of income to fund the inevitable budget shortfalls that come with their missions. Given that these organizations are often looking for supplemental and long-term income, cellular providers are known to approach NPO’s, churches and other religious institutions to lease space on their buildings or elsewhere on their properties. Unfortunately, cellular carriers often view NPOs and religious institutions as unsophisticated players in the commercial real estate arena (specifically when involving cell site transactions) and seem to believe they can take advantage of these organizations to get very… Read more

As a cell site leasing attorney, one of the most common questions I get from a potential client is “How can I get a cell site on my property?” The answer is similar to the common saying in Hollywood – “Don’t call us, we’ll call you.” It is easier to understand why this is the case with a brief background into the cell site acquisition process. With this Ring I Thee Search The cell site acquisition process begins with the cellular carrier creating a search ring of an area within which the carrier seeks to increase its network capacity. This is literally a… Read more

I recently received a phone call from a man who lived on twenty-four acres of raw land in rural Michigan. He explained to me that he had leased a small portion of this property to a large national cellular carrier about a decade earlier. The cellular carrier then built a 200-foot-tall free-standing lattice tower on which it placed transmitting and receiving equipment. However, the location did not prove to be as profitable as the cellular carrier anticipated, so it abandoned the site prior to the end of the lease term. The gentleman explained that he and his wife were of… Read more

Authored by: Linda S. Koffman Fitness centers and gyms are a big business. According to Statista, there were more than 37,000 fitness centers in the U.S. in 2017. This is an increase of more than 5,500 compared to 2012.  In an era with declining activity in retail, fitness center leases provide a growing opportunity for both landlords and tenants.  After representing a number of fitness companies in their lease negotiations, I have come across some key provisions that should be discussed between the landlord and tenant at the letter of intent stage. Early agreement on these issues will lead to… Read more

Owners of commercial real estate, regardless of the property type, try to utilize every aspect of their property to maximize revenue and create additional value.  For example, many landlords often look at building rooftops and other generally “unused” areas on their property to generate additional rental income by leasing those areas to tenants with “specialized space needs.”  Any income generated from the roof or any unused portion of property is often considered by the property owner to be “found money” and the terms of those “specialized space” leases (including the rental income generated by these leases) are often not analyzed… Read more

Most commercial real estate leases are located on property encumbered by a deed of trust. The rental stream from these leases is a major factor in the lender’s valuation of the real property as its security and its underwriting of the loan. The rental stream is also the borrower’s source of funds to make its monthly loan payments to the lender.  Before making the loan, the lender will review the existing leases to determine if those leases are acceptable to it and support the loan. The lender will also decide if it wants any of the existing tenants to subordinate… Read more