How to Negotiate a Cell Tower Lease Buyout

Almost in all cases, cell towers will increase property values. It is important to structure your lease(s) to maximize your values. In some cases, poorly structured leases will devalue property values.

There have been no studies to current date, which show any danger of having a cell tower or site on your property. That does not mean that there is not or is any danger.

The lease will dictate what will happen to the tower should the tower owner vacate. It is important to get these items included in the lease upfront. If the tower owner should go bankrupt, most likely, they asset will/would be purchased by another cell tower operator.

These are all negotiable items in your lease, which should be carefully considered.

This is all negotiable to a certain degree. It will depend upon the lay of the land and the market place but these items need to be accounted for in your lease.

This is a negotiable item and several items come into play. How is/are the current tenants, where is the market, how much space and what do they want to do with this space all come into play. This can be a great opportunity to recover lost rents from a poorly structured lease.

This is a negotiable item, which must be thought out carefully. In some cases, cell tower owners will try to dig their feet in the sand on this item. They like to flat line their costs and give themselves a greater chase for upside growth.

This is a VERY negotiable item. Never assume ANY item is set in stone on a lease agreement or buyout agreement. The important thing is to understand what you can and cannot change. They will always tell you they cannot change an item when it actually can and usually does get changed.

This can have an adverse affect if not negotiated properly. There are many items of ingress/egress easement, which should be weighed carefully.

The most important factor should be your capital needs versus risk factors regarding your site. On paper, the cell tower lease revenue is extremely hard to replace. With that said, MANY leases to get cancelled. The most common mistake for landowners is to “ASSUME” their lease is backed by the US Government and is will last as long as the term on the lease. 99% of all leases can be cancelled in 30-days.

SBA, Crown Castle and American Tower are large publicly companies trying to protect their assets and improve their EPS by turning your rent expense into a capitalized asset on the balance sheet. They will tell you many different “stories” in order to get you to do what they want. Some less than ethical sales reps will “bend” the truth, using threats to get you to sign their extension or buyout agreement.

If you are not willing to sell your lease to them, they will always want you to extend at their benefit to lock your cost in. It is rarely to your benefit to extend and almost always results in you losing a tremendous increase in value for a small payoff of a few thousand dollars to extend for decades.