Cell Tower Lease Extension and Renewal
– Have you been approached for a cell tower lease extension (renewal)?
– Is your tenant offering you something that does not seem reasonable?
– Alternatively, is your tenant offering something that sounds too good to be true?
– Maybe your tenant is providing what you believe is a fair offer, but you just want to be sure.
Whatever the case may be, we recommend that landlords practice that good-old-saying: “it is better to be safe – than sorry!”
Tower Advantage will provide you with the “behind-the-curtains” analysis of your current cell tower situation. We are experts that have been in the industry for over 20 years. Contact us today for your complimentary consultation.
“Thank you so much for your recent assistance in the renegotiation of our cell tower lease. I have been an active investment real estate owner, and developer for over 20 years. This has included my oversight of multiple cell tower land leases on our properties…” [read more] – Robert Z. – 2301 Associates, LLC
Here Are 6 Important Negotiation “Facts” That You Need To Know:
Your cell tower tenant is likely a billion-dollar company that is using experts to negotiate the most profitable cell tower lease for them – not you.
It is now over three decades since the beginning of the cellular industry. Many of those leases need extending as they near the end of their term. The wireless carriers and tower companies are not billion dollar companies by accident. They have strategically negotiated leases to their advantage to maximize their profit. Can you imagine what you would have done 30 years ago if you just had the knowledge at that time?
It is not easy to be up against such a “giant”. Especially when you do not have same information to fairly negotiate the best deal for yourself. We want to provide you with 6 important negotiation “facts” that you need to know related to cell tower lease extension (renewal).
1. Cell Tower Tenants Use Experts To Negotiate For Them
Tower companies and wireless service providers make sure that they get the best results by using experts. Some tenants will often hire companies such as MD7, BlackDot, and The Lyle Company in order to negotiate their cell tower lease extension/renewals. You can be assured that they have much more information regarding the cell tower than you do.
One simple example of this information is the amount of profit the tower generates for them. As you may have heard, the party with the most information usually “wins” at the negotiation table. Unfortunately, landlords are consistently at a disadvantage because they do not have the necessary data and expertise to allow them to “win”. That is the reason – just like your tenant – we recommend a cell tower lease expert to advocate for your best interests.
Sometimes, tenants are contacting landlords more than 10 years in advance of the lease expiration in order to secure a cell tower lease renewal. The primary reason retaining an expert is so important is because the lease agreement will last decades into the future. You should always engage someone who knows what legal pitfalls to look for, and to ensure that you are not leaving “money-on-the-table”.
2. Cell Tower Tenants Will Always Ask For Way More Than They Need
In their cell tower lease extension proposals, most tenants will include many more restrictions on you, and much more favorable rights for them. Unfortunately, most landlords simply agree to the requests since they do not want to upset their income stream. Most of the time, property owners have not negotiated this type of specialized agreement. As a result, most will simply “wing it” if they do not hire an cell site advocate to protect their interests. We do not recommend that approach.
A typical cell tower lease agreement will contain over 25 sections all drafted by attorneys. In a proposal for cell tower lease extension (renewal), many tenants will look to strengthen those clauses on their behalf – and at your expense. Moreover, they will add additional clauses such as a right to expand the premises, or to expand the use.
Those clauses may seem harmless enough, unless you know how the relate to the overall value of the lease and the amount that you should be compensated. Alternatively, you may not want to agree to many of those clauses for a variety of reasons. Unless you have the proper cell tower expert to discuss this with, you will be at a disadvantage in the negotiation.
3. Cell Tower Tenants Will Never Give You The Complete Picture
Is your cell tower making a lot of money off of leasing your land? On the other hand, are they looking for alternative locations due to the amount of rent that they are paying you, and the fact there may be cheaper locations available that will save them hundreds of thousands of dollars over the next several decades? This type of information is very important to know when it comes to negotiating the best deal.
Property owners have contacted us after they were ready to agree to an increase in rent from their tenant. However, they understood that without the complete picture, there was no way to be fully-informed that their decision was correct. After having an initial free consultation with our experts, they understood that it was still not what they should be getting paid.
Tower Advantage has thousands of cell tower rents in our database from from all over the country. In addition, we know the amounts to charge for particular equipment, different types of structures, and for specific language that your tenant is requesting. This information is very valuable, for your benefit, as it puts us in an informed position to maximize your opportunity. Don’t let your tenant be in a better bargaining position in your cell tower lease extension (renewal).
4. Most Cell Tower Leases Are More Favorable To Your Tenant and Need To Be Updated For Your Benefit
As previously mentioned, there are typically over 25 sections in a cell tower lease agreement. If you had the lease over a decade, we can assure you that many sections need to be updated for your benefit and protection. Also, if you didn’t use a legal expert to originally negotiate the agreement, it is likely lacking key provisions that you need.
You can bet that your tenant will also be adding language to the lease to further strengthen their position. Some may make sense and are needed, while others are too restrictive and overreaching. The problem is it is difficult to know without being in the industry and negotiating these on a daily basis.
The experts at Tower Advantage have helped our clients add language that will save them tens – and sometimes hundreds – of thousands of dollars. The following are just a few examples of how we protect our clients. For instance, we always recommend modifying the removal and restoration clause so you are not stuck with an expense of $100,000+ related to getting rid of leftover equipment when the lease is over. In addition, rights of first refusal clauses can limit the landlords future property rights and can devalue the lease by thousands of dollars.
5. Cell Tower Lease Rates Range Widely
Cell tower lease rates range for $100 per year to $25,000+ per month. Moreover, no two cell sites are exactly the same. Just because someone down the street is getting paid a certain amount, that doesn’t mean that is what you should be getting paid too. It depends on many different factors. Some examples include: the location of the tower; who is the current tenant; who owns and manages the tower; if there are any subtenants on the tower, including who they are; and the cost of removing and/or relocating the site.
Tower Advantage has a rent database of thousands of sites across the country. Although very helpful, the “market rate” can be misleading since most cell tower leases have been underpaid. As a result, the “market rate” is lower than it should be. How much lower? That is where having a cell tower lease expert will significantly benefit you. We can share the “secrets” of the industry that will put you in the best position for success.
After a thorough review of many clients’ situations, and even after they were offered a 100% – 200% increases over their current rent amount – plus a significant one-time signing bonus – we have helped landlords increase the total cell tower lease value by hundreds of thousands of dollars. In addition, we protected the landlord from future issues by addressing all of the sections that are normally overlooked by your standard consultant. Don’t take our word for it, we will be happy to provide you with contact information for past clients.
Don’t be fooled into agreeing to a cell tower lease extension without getting expert feedback. Even if the offer from your tenant appears to be wonderful – you can almost guarantee that you don’t have enough information to confirm that you are not accepting too little. There is a reason these telecommunication companies are worth billions of dollars. One specific reason is they negotiate very beneficial cell tower leases which allow them to earn a lot of profit at the expense of landlords.
6. Most Consultants Are Under Qualified
Unfortunately, most consultants do not possess the required expertise to properly represent landlords. They may have worked in the telecommunication field, but do not have the legal expertise or licensing required to negotiate contracts. Without the proper representation, many landlords will almost guarantee that the some important provision in their lease will be neglected. Unfortunately, we have seen these mistakes cost tens of thousands of dollars, and the loss of substantial protections for property owners who do not hire a proven cell tower advocate.
Tower Advantage is a full-service consultant. We have the proper credentials to ensure you are adequately represented in your cell tower lease extension (renewal). Our firm includes attorneys, real estate brokers, financial analysts, and telecommunication experts. We possess the necessary experience to structure the best cell tower lease agreement for your benefit.
We also use a proprietary method of negotiation to ensure our clients’ success – both monetarily and otherwise. Just some of the considerations we look at – some not generally known to the public – include the type of cell tower site, type and use of equipment, potential for expansion, traffic and competition for the site, and potential pitfalls other landlords have experienced based on the same factors.
The experts at Tower Advantage have reviewed and negotiated hundreds – if not thousands – of cell tower leases using their vast industry knowledge for your benefit. Now, you have the chance to even-the-playing-field with experts that have worked on both sides of the industry. The industry has significantly changed over the past 30 years. Don’t you think your lease requires a significant update as well?
We recommend that you thoroughly interview a prospective cell tower consultant to make sure you are getting the proper representation. Don’t be at a negotiation disadvantage – hire a cell tower lease expert.
Contact Tower Advantage today to learn more about how
we can help with extending amending cell tower lease agreement
strategies for your maximum success.
(833) MY-TOWER
(833) 698-6937
