This is an actual Rent Optimization letter sent to one of our clients by T-Mobile’s representative, Md7. The deal that was offered to this cell site landlord would have resulted in a rent reduction of about $245,000 (just about a 55% discount) over the described term of the lease.
A good deal for T-Mobile? Of course. A good deal for the Landlord? What do you think?
After consulting with the Cell Site Lawyer, the client decided to decline Md7’s ‘offer.’
Dear [LANDLORD],
Thank you for taking the time to speak with me regarding your cell site lease with T-Mobile. Per our conversation, T-Mobile has directed Md7 to work with you to facilitate certain lease modifications that will reinforce T-Mobile’s position as a leader in the industry and create a more viable long-term relationship with you.
Industry changes
As you may already know, recent economic and industry developments are changing how wireless carriers must operate. In the past, emphasis was placed on rapidly building out networks in order to improve coverage. Today, while the end-user is enjoying greater services and better coverage than ever before, escalating operating costs are growing at an unsustainable rate. As a result, the industry is shifting its focus to operating networks as efficiently as possible.
Eliminate risk and increase value
One way carriers are addressing this shift is by reassessing their cell-site portfolio. T-Mobile has partnered with Md7 to offer selected landlords like you the opportunity to minimize the personal and business risks associated with economic uncertainties, and to increase the true value of your cell site.
In exchange for your cooperation in amending the terms of your lease to support T-Mobile’s long term success, T-Mobile and Md7 will guarantee your cell site lease income under the following terms:
- $[ ] per year, commencing __/___/20__
- 10% rent increase every 5 years, commencing __/__/20__
- A rent holiday commencing __/__/2028; rent will resume __/__/2035 (assuming site is still operational)
- In exchange, T-Mobile will modify its termination rights to ensure your rental income stream starting immediately for the next 120 months, totaling over $__,___.00
OR
- Alternatively, you can elect to receive a one-time, lump-sum payment of $__,000.00 in exchange for a 15 year lease assignment.
A sound decision
As the economy and the industry fluctuate, it can be comforting to have something you can count on. Although you have been invited by T-Mobile to share in this offer, your participation is optional and T-Mobile will continue to abide by the terms of the original agreement, including T-Mobile’s ability to exercise termination rights where they exist. As always, T-Mobile values its affiliation with you and would like to “stick together” with you to continue a long and mutually beneficial relationship for years to come.
Please contact me to discuss the next steps to secure your relationship with T-Mobile for the long run.
Sincerely,
____________________
Lease Consultant
Tel: ________________
Fax:________________
__________@md7.com