By Sarah Mabry

In 2016, our client acquired a 420-unit student housing asset. In 2024, our client made the decision to reposition this property as a conventional asset.  Following that decision, they requested our assistance in evaluating changing Internet service delivery models and any impacts there might be to amenities, expenses, and revenue. Through strategic negotiations with the Service Provider, emphasizing the needs of our client, the value of the broader partnership and enhanced resident experience, RealtyCom Partners successfully generated nearly $1M in total value—equating to $2,300 per unit—for our client’s asset.

The Work: The existing telecommunications agreements included bulk (owner-paid) Internet and Television services.  While many of our clients see tremendous value in purchasing Internet services in bulk, there were specific reasons why our client did not wish to continue with this model.  With six years of term remaining in the existing contract, RealtyCom Partners was asked to explore termination options that would allow the owner to transition to retail (direct-to-resident) services as soon as possible.

RealtyCom Partners conducted a comprehensive review of the existing Service Provider contract, leveraging our extensive database of over 100 contract terms. In this case, while the owner had the option to switch the bulk television service to retail, the bulk internet service did not offer a conversion option. Additionally, the contract did not allow for bulk internet termination without cause, meaning the owner would need to “buy out” the remaining term for these services.

The Results: Thanks to our long-standing partnership with the Service Provider, and portfolio management approach with our client, we possessed a unique understanding of how to navigate these complex negotiations. RealtyCom Partners successfully negotiated the termination of the existing contract six years early and secured an Exclusive Marketing proposal from the Service Provider that was ultimately a better fit for our client for this particular property. We prepared a detailed financial model to outline the deal terms and value created for our client, an in-depth property and market review of telecom services, and a communication/operations plan for the site team and residents. Key highlights include:

  • Elimination of a $750,000 early termination fee due from our client.
  • A Retail Marketing agreement that immediately superseded the current Bulk agreement for a net new 6-year term.
  • A one-time payment to our client which helped offset current annual bulk expenses.
  • A fixed revenue share on Internet, Television, and Phone services.
  • Provision of additional courtesy services for the common areas, resulting in additional operational savings of approximately $500 per month.

Following the contract execution, RealtyCom Partners worked closely with the Service Provider and site teams to remove existing equipment, implement pre-installed modems in each unit, and track resident issues for resolution. Pre-installing modems allowed existing residents a similar experience as the prior bulk contract, and these types of programs enhance the resident experience, allowing them to connect to the internet within minutes of moving in – eliminating delays with modem shipments or technician appointments. Upon move-out, the modem remains in place for the next resident. This program is at no cost to the owner, and leverages the vast experience of RealtyCom Partners to boost resident subscriptions by 10-15%, on average, directly contributing to increased revenue share to the Owner.

Through bringing together our contract due diligence, negotiation expertise, and deep partner relationships we were able to turn a problem for our client into a win – improving operations and enhancing telecom revenue. If you need specialized assistance and resources, RealtyCom Partners is always up for the challenge! Contact us at info@realtycompartners.com to see how we can help you today.