Why Carriers are Retaining Real Estate Asset Managers
Commercial Investment Real Estate
“It’s time for American corporations to take a closer look at their real estate portfolios.”
A reevaluation of the way corporations handle their real estate is especially important in light of the anticipated growth in buying and selling, says a recent Coldwell Banker Commercial/National Real Estate Investor corporate real estate survey reported in CIRE.
This forecast is particularly significant to the wireless communications industry. With nearly 184,000 cell sites nationwide (which reflects a growth trend of 4.5% year over year since 1985), wireless carriers have officially acknowledged the magnitude of their real estate portfolios. In fact, cell site leases represent the first or second largest expense for wireless carriers internationally. Managing these costs has become a number-one priority as carriers navigate their forward planning and the new technology that will profoundly impact the growth of their cell site networks.
A by-product of the wireless industry’s growth strategy since its inception, carriers’ real estate portfolios have been a largely overlooked asset for 20 years. Now, the industry is taking steps to manage their commercial real estate interests with the same savvy indicative of corporations focused on maximizing their investments.
But commercial real estate is a complex business and building owners for decades have tapped industry experts to represent their interests. Professional landlords or partnerships that own small office buildings often employ their own brokerage listing agents who monitor the competition’s lease terms and conditions, while large office complexes owned by institutional investors employ professional property and asset managers.
An estimated three to ten percent of brokers focus exclusively on representing tenants, a more recent industry segmentation that equalizes access to critical market information. Says CIRE magazine, most Fortune 1000 corporations utilize tenant rep services.
“When tenants do not go to the marketplace to fully determine whether the renewal terms and conditions are competitive, they almost always lose. Knowledgeable landlords keep pace with the marketplace and fully appreciate the financial rewards to the property owner when tenants enter lease renewal negotiations without a broker and without bringing alternative locations into competitive play.”
This commercial real estate management strategy is overtaking the wireless industry and a new niche has developed for the administration and evaluation of cell site leases – real estate asset managers for the wireless industry. With their sprawling nationwide network that functions in dozens of markets simultaneously, carriers require yet another level of specialized tenant representation.
© Copyright 2006 Md7, LLC
Noted Telecom Industry Executive Joins Md7 Advisory Board
SAN DIEGO, CA–(Marketwire – December 2, 2009) – Md7, a pioneer in real estate asset management for the wireless telecommunications industry, named Dion Joannou, previously Chief Strategy Officer and President of Nortel Networks of North America, to its Advisory Board. Joannou’s appointment as the Advisory Board’s inaugural member marks Md7’s commitment to take a leadership role in global wireless asset management and administration.
“As wireless operators migrate to LTE and 4G, our customers rely on Md7 to help them reduce their operating costs, so it’s invaluable to have an industry veteran with a winning career contributing his experience and insight to our forward planning,” said Michael Gianni, Chairman and Chief Executive Officer of Md7.
Highlights of Joannou’s 14-year career at Nortel Networks include serving as the company’s Chief Strategy Officer and President of North America. Prior to his departure from Nortel in August 2007, Joannou was responsible for over 50% of Nortel’s revenues totaling between $5 and $6 billion. In the years following, Joannou has served on select boards, advising the executive teams of several notable enterprises. He holds a BA from Southern Illinois University and an MBA from the University of Miami in Florida.
Md7 is a specialized real estate portfolio management company that identifies and develops asset optimization and expense reduction initiatives for wireless and wireline telecommunications operators. Through proprietary financial engineering, Md7 provides a highly efficient property management system for the unique commercial real estate interests of wireless carriers. The Md7 suite of services focuses on lease administration and management of cell site portfolios. With both US and European international headquarters in San Diego and London, Md7 has become a proven partner of top wireless corporations and a sophisticated source of funding thanks to a uniquely qualified and structured finance, real estate, legal, operations and technology team.