As another wave of wireless communications carriers prepares to enter the L.A. market, mobile phone users aren't the only ones to profit. Property owners who have buildings in the right places are already reaping financial rewards.
Antenna sites are becoming more in demand by the wireless carriers seeking to build up their networks, and property owners are getting savvier in their negotiations.
"I used to feel like Santa Claus when I started this job," said Larry Levine, the manager of site development for AirTouch Cellular. "Once I explained it to (the landlords) that we'd pay them rent in exchange for practically nothing, they couldn't believe their fortune that their property just happened to be in the right location."
Levine said he routinely receives about three offers each week from landlords offering their land for cellular sites. Several big landholders have struck bulk leasing agreements with the telecommunications companies and some large real estate holding companies have even formed divisions to handle the leasing contracts.
Karl Schwass, vice president of Metropolitan Life's corporate property management division in Los Angeles, said his company formed a special rooftops program two years ago in an effort to attract more telecommunications tenants.
"We realized that there was a tremendous opportunity to generate revenues," said Schwass, who said that a building with multiple antenna leasing agreements could bring up to $1 million from its telecommunications tenants. "This was the best way for us to maximize our income and minimize our liability."
The new wireless carriers, including Pacific Bell Mobile Services, Nexttel Personal Communications Systems and Sprint PCS, will join the already established AirTouch Cellular and L.A. Cellular in the Los Angeles market. Pac Bell launched its local services in July and Nexttel and Sprint plan to start their operations later this year.
The wireless carriers offer so-called personal communications services, which use digital technology rather than the cellular carriers' analog or soundwave technology. AirTouch and L.A. Cellular are also adding digital technology to their services. Digital carriers will eventually have the capacity to offer call waiting and caller ID.
In this seller's market, wireless lease agreements are often sweet deals for landlords. Telecommunications companies often pay about $2,500 each month to lease space on a rooftop or on the side of an office building. They're low-maintenance, long-term tenants that pay their own utility bills and the cost of installing and camouflaging the equipment.
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