In our experience, owners of commercial multi-tenant buildings – whether housing office or retail space – tend to be more passive than owners of residential MDU properties when it comes to negotiating access agreements with telecommunications carriers. More so than in MDU markets, commercial multi-tenant owners allow telecommunications carriers access to private property either without any agreement at all, or simply sign whatever access agreement is presented by the carrier without negotiating terms. With the aid of a savvy real estate and telecommunications attorney, commercial properties can negotiate with great success.
You CAN Negotiate a Telecom Agreement — and Increase Your Rental Value in the Process
Regardless of the historical reasons, the perception that owners of office or retail buildings have little or no leverage in telecommunications access negotiations is false and works to the advantage of the carrier at the expense of the property owner and tenants. There is no doubt that having an effective access agreement or agreements in place increases the rental value of any commercial multi-tenant property and for that reason, the topic merits careful attention. Good money is being left on the table.
Contrary to common assumptions, there are numerous valid reasons why a telecom access agreement is necessary, including (among others):
- Realize Value from Risers, Conduits and Raceways.The access agreement allows the owner to maintain control over the building, specifically including the risers, conduits and raceways. These pathways, extending from the street into the building’s basement and vertically from there to and within end-user locations, consist of limited space that is quickly filled when multiple telecommunications carriers are providing service. Third-party access to limited space implies value. It is therefore crucial for owners to ensure that access to available space is given to those who can bring the most value to the building and its tenants.
- Regulate Use and Cable Abatement. Unless subject to the owner’s oversight and control, riser pathways can quickly become a disorderly and dangerous tangle of unmarked cables and associated electronics when a carrier discontinues service. An access agreement is needed to regulate the uniform use of pathways and should specifically address cable abatement (as opposed to abandonment) upon the termination of service by any carrier.
- Ensure Quality Installation, Maintenance and Removal of Telcom Cables and Electronics. Without negotiated terms and conditions, work performed by a carrier and its contractors can be chaotic, disruptive, destructive, and create unforeseen and unnecessary liabilities for the property owner. The access agreement ensures that all installation, maintenance and removal work is performed by qualified contractors in ways that are consistent with the building’s overall operations and more specifically with the owner’s standards of quality, integrity and insurance requirements.
- Benefit Tenants through Quality, Competitive Telecommunications / Broadband. In the absence of contractual requirements, a carrier’s services to tenants can be, and often are, substandard; uncompetitive broadband services make the property less attractive to existing and potential tenants. The access agreement can ensure not only that services will be immediately activated for new tenants, but that all services will continue to meet or exceed specific standards relating to the deployment of competitive technology in a rapidly changing environment and to responsive customer service. The availability of competitive broadband services is a crucial selling point for any commercial multi-tenant property in today’s marketplace.
- Share Telecom Revenue. Depending on the region and the specific carriers involved, ancillary revenue may be available to the building owner as compensation for the carrier’s occupation and use of private property, marketing support as the “preferred provider” and so on. Compensation may be structured as an upfront fee or as an ongoing share of revenue generated on-site.
Telecommunications Attorney vs. Telecommunications Consultant
The Kandutsch Law Office has significant experience in negotiating effective telecom access agreements for commercial multi-tenant properties. While we understand that such negotiations are often handled by third-party consultants, the expertise of those consultants is typically focused primarily on technical matters and may not encompass maximal protection of the owner’s legal interests. For that reason, we believe that some consultants may in effect function more as conduits for carrier business development than as strong advocates for property owners. Our office addresses this gap in coverage. Whether dealing with a single building or an entire portfolio of properties, we provide undiluted advocacy and commitment to our clients’ best interests, tailored to meet each client’s specific needs.
If you wish to discuss telecom access agreements for your commercial multi-tenant property, please contact the Kandutsch Law Office to schedule a free consultation.