Revenue can come from unexpected places. A new company born in Kentucky is helping thousands of businesses monetize their roofs and sign structures as wireless service antenna sites. It’s almost as if dollars materialize from the sky overhead.
One cell antenna can generate $800 to $2,200 a month in rent. And once in place, there’s little to no impact on normal operations. For businesses with multiple sites used by multiple carriers, the fresh cash flow can be nice indeed.
Lexington native Brandon Rice developed Immobili LLC, which markets and manages more than 22,000 business sites to wireless providers.
The company was founded in Lexington but now operates in Bellevue, Wash., a suburb of Seattle, near the action in the wireless industry. The first antenna site Immobili marketed is an Outback Steakhouse near Interstate 75 in the Hamburg area of east Lexington.
After breaking through in the restaurant industry, Immobili gained serious traction this year and recently signed deals to market Auto Zone and Kroger locations, both of which have thousands of prime sites. More large announcements are anticipated in the near future.
Rice has diligently nurtured Immobili to fruition since 2001, when he graduated from Southern Methodist University with an economics degree. The business idea originated from his father, Brent Rice, a Lexington attorney with the McBrayer, McGinnis, Leslie & Kirkland firm. The elder Rice, whose practice focuses on wireless communications, realized certain companies have what wireless providers need: locations, locations, locations.
“Ideas are a dime a dozen. It’s the development and execution of ideas that makes one a success,” Brent Rice said. “Brandon developed the contacts and earned their trust in order to assemble the real estate partnerships for Immobili. He also assembled the core team and investors with the expertise and ability to gain the complete confidence of the wireless industry. He deserves 100 percent of the credit. I could not be prouder.”
As carriers continue to infill and upgrade bandwidth for their networks, antenna sites are crucial because they compete for customers primarily on network strength and quality – in a J.D. Power and Associates survey, wireless customers rated call performance and reliability their No. 1 concern.
Immobili, Brandon Rice explained, plays the role of matchmaker between wireless carriers and companies with the key real estate locations they need – especially chains with hundreds or thousands of locations in densely populated urban areas. The initial matches are being made with restaurant sites.
“This is found money for them,” Rice said of the clients who do strike deals with carriers. “It’s a win-win.”
The young company is building an impressive portfolio of clients with prime real estate. Perhaps the largest plum to date is UFPC, the Louisville-based buying cooperative for franchisees of YUM! Brands. UFPC has more than 1,000 members across the United States operating 19,000 locations. The major stepping stone to the UFPC deal was an agreement with Outback’s affiliated OSI Restaurants, which include Carrabba’s Italian Grill, Bonefish Grill and Cheeseburger in Paradise.
Advanced negotiations with other major national retailers are expected to double Immobili’s real estate portfolio within the next 90 days.
Where it began
Immobili’s first client site was the 90-foot sign – later hiked to 105 feet – above the Outback Steakhouse location in the booming Hamburg area of east Lexington along I-75. That led Rice to a deal as exclusive leasing agent for all of Outback’s 900-plus locations, operating as Boomerang Site Solutions LLC.
The connections Rice made and leveraged all began in Lexington. It took him to Tampa, Fla., for a couple of years, to Los Angeles for half a year, to Louisville for several months, back to Lexington and since last February to Seattle, Wash., which is the capital of the wireless industry in the United States.
The initial deal in the fall of 2001 was made after Rice gained a key introduction through Hamburg Place development manager Patrick Madden to Chris Sullivan, one of the three founder/ principals of Outback Steakhouse. His dealings with Sullivan – who spent several growing-up years in Pikeville and is a University of Kentucky alumnus – went so well that Rice spent the next two years working in Outback’s main offices in Tampa.
“Outback has been very pleased with its relationship with Brandon and his company for the past six years,” Sullivan said. “We believed in the concept from day one. It has been validated by the fact our company receives significant rental income from our properties. I believe with the company relocating to Seattle, which is the wireless capital, we will have many new opportunities for our properties.”
Immobili is finding those opportunities.
“OSI played a huge role in getting our concept off the ground, not only financially but by giving Immobili serious credibility with other companies,” Rice said.
The right expertise
After learning the property side of the equation in Tampa and then with a Los Angeles real estate firm, Rice returned to Kentucky. To gain fuller understanding of the telecom carriers’ issues, he did an internship with Bob Crammer, a Louisville-based consultant who operates ETC Associates. ETC plays a role in antenna site acquisitions for wireless carriers throughout Kentucky as well as southern Indiana, Ohio and north-central Tennessee.
Crammer and Brent Rice were business acquaintances whose mutual respect had led to friendship.
“We showed (Brandon) the ropes of what we were doing,” Crammer said, particularly the relationships with clients.
At the time, he was working closely with T-Mobile. Crammer calls his present telecommunications work “my third career.” He spent 20-plus years with Cummins Diesel in the auto industry, then oversaw manufacturing and sales for a company creating military conversion vehicles. He entered telecommunications after the defense firm sold.
“It’s been a great, great job – a lot of fun,” said Crammer, who now is a minority partner in Immobili.
The driving force behind the industry, in Crammer’s view, is people’s increasing need to be connected all the time. Cell phone use penetrates down even to
grade school kids, he noted, and users increasingly take and send photos with their phones. The result is ever-mounting demand for more network capacity.
“You continue to see a need for additional cell sites, for 2G sites, 3G sites,” Crammer said. The 2G and 3G references are to the second and third generations of service, each bringing a jump in capacity for expanded services such as streaming video to handsets. Each generation uses different frequencies, requiring the building of new networks. And that means more and more antennas.
It’s a fertile field for those who can “move at the speed of wireless,” as
Immobili CEO Chip Kelly puts it. He speaks from 17 years of telecommunications experience. Kelly is a former vice president of sales and business development for Western Wireless, where he oversaw 1,400 employees and a $200 million budget.
A variety of players have tried and fallen short marketing multisite real estate holdings to carriers, with corporate bureaucracy the usual nemesis, said Kelly.
Navigating the multiple, overlapping layers of approvals and sign-offs in large organizations just takes too long for the highly competitive carriers to wait.
Those delays are worsened if a site will then need zoning changes or variances, which can easily take 30 or 60 days – which must occur before seeking a building permit whose issuance then allows an actual installation process to begin.
The location formula
The antenna sites carriers seek are the product of analysis by telecommunication company engineers. Population densities and potential service demands steer recommendations to place antenna at a specific height within a defined radius of a specific site. The job then becomes to find a willing landlord within that radius.
Antenna heights are lower and close together in dense areas because if their signal can reach too many customers at once, their capacity can be exceeded, causing the dreaded dropped call. Unlike a decade ago when tall towers typically were erected for maximum antenna height and range, today a business rooftop or signage often offers the proper height.
Lower and closer together equals more demand for sites and the sometimes-elusive willing landlord.
Immobili knows all too well how time-consuming real estate negotiations are.
Even with the credibility of his OSI Restaurants agreement under his belt, Rice had to work two years to assemble his agreement to represent UFPC’s member properties. Approvals had to be hammered out with all five major chains: KFC, Taco Bell, Pizza Hut, Long John Silvers and A&W.
However, the extensive stable of YUM! franchise locations all over the nation has propelled matters to another level. It drew investment, including a pair of major “pioneers in the wireless business” from the western United States. John Stanton and Cam Lanier III are now Immobili board members.
Wireless industry pioneer Stanton has been involved in founding three top 10 wireless companies: McCaw Cellular Communications, Western Wireless Corp. and Voicestream.
Entrepreneur Lanier is responsible for 20-plus ventures in tech and telecom, including Interstate Communications, which sold to MCI in 1990. He was a lead founder of ITC Holding Co., which included such notable companies as
ITC DeltaCOM, Knology, InterCall, PowerTel (now T-Mobile), Mindspring and Firethorn.
Immobili is a privately held corporation and its financial data is kept private for competitive reasons. Company officials won’t reveal how many consummated antenna site deals Immobili has brokered, but Kelly did say that investors have put seven-figure amounts into the company.
Joe Main, vice president of UFPC, said finalizing the relationship between YUM! franchisees and Immobili late last year has created a lot of productive activity from wireless carriers.
Hundreds of vendors approach UFPC each year seeking business access to the thousands of franchises, Main said, but many don’t pass the vetting process.
Veteran team in place
In addition to Kelly, Immobili’s current staff includes Bryon Gunnerson, vice president of operations, who has held VP-level engineering and deployment positions at McCaw, Western Wireless and T-Mobile and overseen development of more than 8,000 wireless sites across the country; and Jeff Langdon, vice president of sales, who held positions with McCaw/AT&T Wireless before joining SBA in 1998 as sales vice president.
“We’ve got the core team in place,” Kelly said. “Probably most importantly we’ve got all the financing lined up. … In this environment, based on the budgeting and planning we’ve done, it’s an adequate amount of money until we are cash-flow positive.” That should come in the company’s second year.
The market will drive events, but Immobili hopes to be approaching 30 employees in three years, Kelly said.
Immobili believes its real estate portfolio puts it in a great position at a time when the six major wireless industry carriers are fleshing out their 3G networks.
Crammer is enthused, too.
“We’re going to be able to allow the carrier to get on air quicker, and that allows them to have greater customer satisfaction,” Crammer said. “We’re excited.”
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