A hotel cell site is common place throughout the United States. According to the American Hotel & Lodging Association, there are over 54,200 hotel properties in the United States. Most hotels are adjacent to highways and often serve busy surrounding communities. This makes them prime location options for cell sites and cell towers that want to serve the surrounding area.
From a design standpoint, the location of the cell site often does not greatly impact the hotel itself. Wireless carriers prefer to attach their antennas on the roof, or the facade of the building. So long as the antennas are installed in a “stealth” manner (behind screening), their installation should not have a negative aesthetic impact on the property.
From an income producing standpoint, cell tower rents will be minor in the total NOI of the hotel property, however, all ancillary income is good income. We have worked on some hotels that pull in hundreds-of-thousands of dollars a year in rooftop cell site rents. While it may not match the net profit on a busy hotel’s food and beverage balance sheet, it does drive positive dollars to the bottom line!
Should We Engage A Rooftop Manager Or A Consultant?
Absolutely. Anytime you are negotiating with individuals representing the wireless industry and your are negotiating with experts who do this for a living. They know what your site is worth, how much rent they should pay you, and what terms will hurt you and benefit them. Don’t enter into a negotiation outmatched due to a lack of information equal to or greater than the party you are negotiating with. Airwave Advisors has extensive experience negotiating rooftop hotel lease agreements for hotels ranging from J.W. Marriott to boutique hotels such as Sophia.
How Do I Manage Their Work Hours?
Your guests want a good nights sleep and you want five-star reviews on travel websites. It is essential that you manage the hours for all contractors performing work on your roof. To do so you will want to set strict guidelines identifying time periods the tenants are allowed to construct and when they must be quiet. These guidelines need to be in your lease agreement. If you already have a lease in place, they can be added into your lease by amending the agreement.
They Want To Record A Memorandum Lease Is That A Problem?
It is commonplace for wireless tenants to request a memorandum of lease to be recorded with the county recorder. This document will be recorded on title so that in the event the hotel trades hands, the new owners will be on notice that there is a cell site lease in place.
It is important, however, to get your tenant to agree to in writing to record a legal instrument removing the memorandum of lease from title upon expiration or earlier termination of the lease agreement. If the document is not removed from title when the tenant moves out, it will create a cloud on title.
They Want Our Lender To Sign a Subordination Non-Disturbance & Attornment Agreement?
With many hotels having mortgages it is very common for tenant’s to request for their landlord to obtain a Subordination Non-Disturbance & Attornment Agreement (“SNDA”) from the landlord’s lender. In layman’s terms, a SNDA protects the tenant so that in the event the hotel were to default and become foreclosed upon, the tenant would not get kicked off of the property.
Getting a SNDA from your lender is typically not a problem. It is important however to pass-through and cost in obtaining a SNDA to your tenant. Some lenders will charge $2,500.00 or so to process a SNDA request for a hotel. There is no reason you should pay this expense. The document only benefits the wireless tenant, not the hotel.
About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).