One of the more disturbing trends in 2021 and early 2022 is the rise of the “5G site marketing companies.” Over the past year, we have observed a substantial increase in the number of proposals issued to our larger municipal and corporate clients. Some of these companies include 5G, LLC.; SiteMark, LLC.; Aon 5G; and TETTO 5G. The public tower companies (American Tower, Crown Castle, Vertical Bridge, SBA Communications) offer site management services to facility owners as well. Please note that Steel in the Air is not related to any of these companies. We don’t offer 5G site marketing services.
These “5G site marketing” proposals share the following aspects:
The glossy proposals show pictures of buildings with multiple wireless carriers leasing space. They spout statistics pulled from industry vendors showing how much wireless use is increasing year over year and how many cell sites will be needed. They promise significant additional income.
If you’ve read our content over the years, you know that we aren’t big fans of marketing agreements. We have reviewed and advised our clients in the past who have entered into them and across the board, we have found that they rarely bring in any substantive income. In the cases where they do, we believe that the wireless provider would have naturally found the property on their own – with or without the marketing agreement in place.
No amount of marketing will make an undesirable site desirable. Carriers place their sites where they are due to engineering requirements. If a site is too close to other sites or too far, they won’t use it. If your site is too short or too tall, the carrier will go to nearby sites and find one that works.
These marketing companies suggest that they will put together a list of their sites, and that carriers will seek them out. However, as someone who has previously managed site acquisition projects, I can tell you that most companies rarely (if ever) looked at “lists” of potential buildings or vacant land. We did use lists of existing towers. We (and the carriers) know that 7 times out of 10, if they approach a landowner, that landowner will be interested. They don’t need a list to know this.
As an example, a client of ours owns hundreds of large commercial developments across the United States. They received a proposal from a site management company to market their properties for cell sites and small cells. They engaged us to review the proposal and we advised that it was unlikely to be successful, but that it didn’t hurt to try under the right terms and conditions. Within 3 years, the management company didn’t find a single tenant – not one across the hundreds of desirable properties throughout the US
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To answer this question, it helps to understand why marketing companies are spending so much time and effort to get you to sign up with them. They know that if they can sign large property owners, the law of averages means that some of the properties may eventually see interest from a wireless tenant. Once they sign up landowners or building owners, there are nominal costs in marketing the sites. Create an excel spreadsheet, put a map of the sites on the website, send the list to carriers, and wait. Even if only 1% of all sites are used, if the marketing company has signed up 100,000 properties, that means 1,000 will be hits.
The agreements are very one-sided. Even if the marketing company is unsuccessful, you are still bound to a long-term agreement. If they do procure a lease, you will owe them 25% of the lease for the life of the lease EVEN IF YOU TERMINATE THE MARKETING AGREEMENT.
Some of these marketing agreements mandate that you use the marketing company’s lease agreement. Because the marketing company wants to maximize their long-term revenue, they won’t always act in your best interest. The agreements are carrier friendly, because ultimately the marketing company knows that the more the lease is modified, the less likely the carrier is to sign it.
In the future, if you end up having to renovate the building or property or wish to move the site, not only do you have to negotiate with the carrier, but you also have to negotiate with the management company. We have assisted landowners in trying to get out of management agreements and leases – it is significantly more difficult than working directly with the carrier.
There is a strong probability that these marketing companies will be bought by other companies in the future, so the people you are dealing with now likely won’t be the same as those you will deal with in the future.
Yes, but don’t expect immediate success. Even in the best scenarios, your efforts are likely to be unsuccessful. Please see our article on how to get a cell tower on your property for more details on steps you can take on your own – and without paying 25% to anyone.
We can evaluate proposals that you have received and review your properties to see whether there is likely an upside in the future. We can share our experience on what traits are more likely to indicate success. If you want to issue an RFP to distribute to various marketing companies, we can help draft it and review and rank their responses. We can review the proposed management agreement and discuss the business terms and language with you and your attorney.
PLEASE DO NOT CONTACT US TO HELP MARKET YOUR PROPERTIES OR FIND A MARKETING COMPANY TO MARKET YOUR PROPERTIES. Please reach out to all or some of the companies listed above directly. Then if you find one you like, we can be retained to help evaluate their proposals.
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