Case Study — Washington State
When a lease question turns into a portfolio problem
How Washington State DNR went from managing telecom leases reactively to building a defensible, consistent approach — and what they found along the way.
|
40+
Properties reviewed across DNR’s trust land portfolio
|
75–100
Individual leases analyzed and valued
|
5+ yrs
Active advisory relationship, ongoing since 2020
|
The Starting Point
Washington State DNR manages millions of acres of trust land, including a substantial portfolio of telecommunications sites — everything from one-carrier cell towers generating modest income to mountaintop communication facilities with multiple tower owners, broadcast tenants, and revenue-sharing agreements that produce hundreds of thousands of dollars per site per year.
Their appraisal team is credentialed and capable. What they lacked was what most large landowners lack: deep familiarity with how the telecom industry actually operates. Not the real estate side — the industry side. How tower companies structure leases. What they typically omit. Where the revenue really comes from, and how to verify it.
In 2020, DNR issued a formal Request for Proposals for telecom lease valuation services. We responded, were selected, and have been their consultant of record ever since. That’s not a casual vendor relationship — a government RFP process means DNR evaluated their options, applied real scrutiny, and made a deliberate choice.
What We Found
They didn’t know what they didn’t know. Neither did their tenants want them to.
Once we started reviewing DNR’s leases in earnest, a consistent pattern emerged: tenants were underreporting. In some cases, it appeared intentional. In others, it was negligence. Either way, DNR was leaving money on the table and had no framework to detect it.
Equipment lists didn’t match what was physically on the towers. Sublease income shown in one document contradicted figures in another. Photographs of sites showed antennas that didn’t appear in any inventory. We pushed back on each of these — and then helped DNR understand why this keeps happening and how to catch it going forward.
“Neither we nor anyone in the industry has comps for the sale of ground lease rights for broadcast towers like these. That required a different analytical approach entirely.”
The more complex sites — mountaintop facilities with overlapping interests from multiple tower operators, broadcast subtenants, and timber company ground leases — required a creative valuation methodology. There are no standard comparables for this kind of property. Arriving at a defensible number meant building the analysis from first principles: FCC license data to independently verify active tenants, industry contacts with direct knowledge of the sites, and a willingness to tell the client when third-party supporting documentation wasn’t complete.
The Outcome
Not just answers. A better way to ask the questions.
The goal was never to make DNR dependent on us for every lease review — that wouldn’t be cost-effective for them, and it’s not the right model. What they needed was a consistent methodology they could apply independently to routine valuations, while keeping us engaged for the hard cases: complex multi-party sites, novel structures, situations where the tenant has more information than the landlord and knows it.
That’s what we built. DNR now has a framework for pricing and evaluating leases across its portfolio with greater consistency and confidence. They know what questions to ask, what documents to demand, and when something doesn’t add up. For the sites that fall outside the standard model — and in a portfolio this size, there are always a few — we’re still the call they make.
Five years in, DNR’s Chief Appraiser is referring us to other government agencies. That’s the metric that matters most to us.
“I am always amazed at the work SITA provides to DNR. He took the extra step, read what was required, and provided the information needed. This is a vendor I am truly happy to have on board with DNR.”
Contract Specialist — Washington State Department of Natural Resources
Who This Applies To
DNR is an unusual client in some ways — the scale of the portfolio, the complexity of individual sites, the public trust mandate. But the underlying problem is one we see across every category of large landowner: timberland companies, utilities, municipalities, and institutional property owners. Someone has been managing these leases for years, and when that person leaves, the institutional knowledge walks out with them. Or the leases have simply been auto-renewing for a decade while the market moved, and nobody noticed.
If you manage a portfolio of telecom leases in the Pacific Northwest — or anywhere — and you’re not completely confident that your tenants are paying what they should, that your sublease revenue is being reported accurately, or that your rent-setting methodology would hold up to scrutiny, it’s worth a conversation.
Talk to us about your portfolio
We work with large landowners across the Pacific Northwest and nationally. No obligation — if the first call tells us you don’t need our help, we’ll say so.
