Negotiating Expiring Cell Tower Leases
Since 2004, Steel in the Air has serviced over 2,500 landowners nationwide, by helping them to negotiate (and renegotiate) favorable leases with wireless carriers, tower companies and lease buyout companies. If receiving fair market value for your wireless tower lease is important to you, then you have come to the right place. We can assist you with making an informed decision based on comprehensive knowledge of all the factors relating to the value of your lease in the present and the future.
Here’s what we can do for you if you’re dealing with an expiring cell tower lease:
Review the Expiring Lease – We will evaluate the terms and language of your current lease in consideration of industry trends to determine the probability that your lease will be extended or expanded upon vs. the likelihood of its termination. We will also explain how each of these scenarios might affect you in both the short and long term.
Audit the Cell Site – We will review the tower or site based on “uniqueness” metrics to determine the feasibility and costs associated with possible site relocation vs. possible site termination. This analysis will include an investigation of zoning regulations, tenants, usage, and expected replacement costs vs. profit flow to the cell tower owner.
Provide Fair Market Valuation – We will perform a lease valuation using proprietary data comprised of thousands of comparable telecom lease agreements. Our goal is to determine the fair market value of your lease in the present – and what it will likely be in the future, while simultaneously assessing the relative value of your lease to the Lessor.
Unlike other telecom companies, we will find the true value of your cell tower lease.
Recommend a Strategy – We will determine how to best position yourself in the negotiations, and explain the upsides and downsides associated with each proposed term. This will include recommendations for rental amounts, lease duration, escalation percentages and additional clauses, such as Right of First Refusal and collocation terms.
The Fine Art of Negotiating Extensions to Expiring Cell Site Leases:
Why these types of lease negotiations are much more complex …
There are a number of cell site leases that originated in the 1980s and early 1990s that are starting to reach the end of their negotiated terms. Owners are starting to receive inquiries from the current tenants asking to either buy out the lease in the form of an easement or to extend the lease for a nominal increase in fees.
"In some cases, the lease has been undervalued for years, and the expiration presents an excellent opportunity to renegotiate a better and more profitable lease."
What makes these negotiations much more difficult than normal lease negotiations is that there are many factors that contribute to how much more (or less) of a lease rate can be negotiated.
In some cases, the lease has been undervalued for years, and the expiration presents an excellent opportunity to renegotiate a better and more profitable lease. Situations where there are many tenants on the tower are likely to be excellent opportunities to renegotiate for a better cel tower lease agreement.
In other cases, the lease agreement was originally signed on the basis of higher expected revenues, and the tenant is currently upside down on the lease payments, i.e., the tower is not profitable for them and the landowner stands a good chance of killing the lease if they fail to extend at reasonable (lower) rates.
There are numerous factors that contribute to these decisions most of which the average landowner does not even know about, yet alone understand. Fortunately, we have negotiated cell tower lease agreements and extensions with all the major carriers and the major tower companies. We know how to evaluate a site’s true value and how to ascertain the difficulty and the expense in building a new site to replace it.
We can also project the current income on the tower and what the likely expenses are so that you have a good idea of how hard you can push. Our goal is to assist you in getting as much for your expiring cell site lease as possible – the operative word being “get”. We won’t put you in a situation where the lease may be terminated.
And that’s where the fine art of cell tower lease negotiating comes in; we know how hard to push before the tower company decides to move the tower. Without the basic information of what the relative value of the expiring cell site is to the carrier or tower company, you are not negotiating, you are just blindly stabbing for the correct lease amount.
Steel in the Air has assisted many clients with lease expirations. Our cell tower lease negotiation services can be retained on a contingency basis in many cases or under our normal hourly consulting rates. Contact us for more information.