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.

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