This case study illustrates a successful negotiation strategy for a rooftop installation lease, where the client was able to secure a significantly higher rent than initially offered by the carrier. Here’s an analysis of the key elements of this case:
- Initial Offer by the Carrier: The carrier initially offered $25,000 for the existing rooftop installation. They based this offer on a valuation that included sites located 18 kilometres away, which we believed did not accurately reflect the true market value of the client’s specific location.
- Inadequate Valuation Method: The carrier’s approach to valuation was flawed because it considered sites that were not comparable to the client’s property. Factors like location, demand, and market conditions can vary significantly even within short distances, making distant sites poor benchmarks for valuation, plus they ignored the recently negotiated lease on the same roof for $52,000pa.
- Client’s Counter Strategy: The client was represented by siteXcell and we immediately recognized the inappropriateness of the carrier’s valuation method. Instead of accepting the offer, we referenced the recently negotiated lease on the same rooftop (as well as other comparables in our extensive database) and rejected the offer. These leases were more relevant for determining the market value due to their proximity and similarity.
- Successful Negotiation: Through our negotiations, the client was able to more than double the initial offer, settling on an initial rent of $52,000 per annum. This rent was more reflective of the true market value of the very valuable rooftop mobile installation site.
- Client Satisfaction: The client was very satisfied with the outcome, as the final agreement was vastly superior to the original offer. This satisfaction likely stemmed from both the financial gain and the recognition of the site’s true value as well as legal, commercial and operational protections in the lease.
- Key Takeaway: This case study highlights the importance of understanding the true value of property assets and the need for proper valuation methods in lease negotiations. It also demonstrates the effectiveness of informed negotiation strategies and the potential for significant financial gains when such strategies are employed.
Overall, this case study serves as an example for property owners and their representatives to critically assess initial carrier offers, use relevant comparables for valuation, obtaining independent advice, and engaging in effective negotiations to achieve fair and profitable lease agreements.
In addition, siteXcell reviewed the results of our past 50 negotiations vs carriers initial offers and found that siteXcell improved the Owner’s commercial position on average of 76% from what the carriers were offering.