Dish Wireless Leaves NYC Multifamily Landlords in Lurch

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Cliff Steinberg has good relationships with all his tenants, except one: Dish Wireless.

Steinberg is the landlord at Manhattan’s 161 Lafayette Street, a fully commercial building with about seven tenants. But a few months ago, Dish Wireless, which put a cell tower on the roof in 2022, stopped paying its rent. 

“There’s no one to talk to. No one returns your calls,” Steinberg said of Dish. “It’s dead.”

It’s a story that’s unfolding across New York, in multifamily as well as commercial buildings.  Carriers like Dish, T-Mobile and Verizon pay about 1,500 New York building owners to lease space on their rooftops for cell towers. But Dish has made the unprecedented move of disappearing, leaving those landlords with no payments and thousands of dollars of equipment in place. Elsewhere in the country, major telecom companies are suing Dish for defaulting on its obligations. 

The dispute with Dish gives insight into a unique sector of the New York real estate market, one in which landlords have little recourse when tenants stop paying. Some landlords, especially those operating rent-stabilized buildings, depend on the revenue boost from Dish to cover costs.

Steinberg’s relationship with Dish started about four years ago, when the company approached him about putting a cell tower on his roof. He has managed the five-story building, his only, since 1987, and personally supervised the installation. Workers threaded large cables through the building. 

When Dish stopped paying or answering calls a few months ago, Steinberg was blindsided. 

“No one ever saw this coming,” he said. “This was really unexpected. And it’s harsh.”

Most of these rooftop cell tower leases are 25- to 30-year terms, said Meir Waldman, CEO of Nexus Towers, which advises landlords on tower leases. It takes a carrier about $250,000 to build out a site, meaning they don’t want to move them around often. A majority of these leases are in the $2,000 to $5,000 per month range. That can be a nice boost for a property owner, especially one who’s being squeezed. 

Given the tenant is a bulky piece of equipment, a landlord has little recourse when a carrier stops paying. When multifamily landlords have a tenant who is refusing to pay, they typically file an eviction case. But it can cost about $75,000 to deconstruct a cell tower, Waldman said, a price most landlords typically aren’t willing to spend. 

‘Unprecedented and unforeseeable’

In 2019, the federal government granted Dish the ability to build out its own cell network, billed as the first true 5G network. 

But just a few years later, Dish appears to have let its obligations fall to the wayside. American Tower, a trust that operates communications infrastructure, said Dish had defaulted on $200 million in payments to the company, according to Light Reading, an energy publication. 

American Tower and Crown Castle, another publicly-traded telecom company, are separately suing Dish for payment defaults. Crown Castle is hoping to claw back $3.5 billion in future payments and has said it is laying off 20 percent of its staff. 

The two companies have joined a coalition of those affected, the American Wireless Builders Coalition. They’re joined by the New York Apartment Association, which represents rent-stabilized landlords. 

“This widespread nonperformance is already causing financial strain, work stoppages, decommissioning concerns, and uncertainty across the wireless and communications services ecosystem,” the coalition wrote in a letter to the FCC. 

Dish did not respond to a request for comment for this story. But the company has said in court that it doesn’t have to pay its leases because its cell towers are now “unusable” after “unprecedented and unforeseeable” regulatory actions. That includes an FCC investigation into Dish’s parent, EchoStar, that prompted the company to sell its licenses to SpaceX and AT&T. 

Never again

Some Dish landlords are luckier than others. The luckiest have already sold their right to collect rent from the cell tower tenants, Waldman said. Third-party investors will sometimes offer cell tower landlords a lump sum for their right to the rent. Landlords can then use that lump sum to help pay off lenders. For rent-stabilized landlords, who have seen the value of their buildings decimated, that can be a lifeline.

“The cell towers are their savior,” said Waldman. “When they entered into this lease 15 years ago, little did they know that this is going to be what is going to help them keep the building afloat in this interesting time.”

The existence of third-party lease sales can sometimes influence how multifamily buildings trade in New York, said Romain Sinclair, a multifamily sales broker. 

“You can buy a building and then parcel out the cell tower and sell that and get yourself a lower basis on the overall purchase,” Sinclair said. 

For Steinberg at 161 Lafayette, his future with Dish is uncertain. He believes it will cost between $50,000 to $100,000 to get Dish’s equipment removed when everything is settled. He has considered going out west to EchoStar’s headquarters to try to get answers, but doesn’t think anyone will speak to him there either. 

Steinberg fears the company will declare bankruptcy. 

“Companies will go out of business over this,” Steinberg said. “I’ll never put a satellite on my roof again.”

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