Industry Expert Shares 10 Things to Know About Cell Tower Leases

Having worked in the cell tower lease industry for well over 12 years now, it’s safe to say that I’ve probably seen it all. I know the things about cell tower leases that others wouldn’t think to consider. One of the most disturbing things is how I’ve seen people leave money on the table simply because they didn’t know about leases. My goal has always been to help people negotiate a fair deal with the cell tower companies, and I always work to get them better leases and higher rates. However, that doesn’t mean that others who are impacted should not have some basic knowledge of the issue.

There are many things to know about the cell tower lease industry, and it would be a whole book if I were to share everything I know about them. Below I will share 10 things that I believe are important for people who are involved in cell tower leasing to know about. This is a short list, but they are items that should not be overlooked, whether you are working on a new lease, renegotiating one, or considering a buyout.

• The number one rule of thumb is not to be intimidated by the salesperson. There’s a good chance you don’t know much about cell tower leases, which puts the salesperson in a powerful position. They may try to take advantage of you because they know you are not a cell tower lease expert. Keep in mind that your lease is typically considered to be worth around 19 times the annual revenue. By keeping that figure in mind, you can make comfortable business decisions.
• There’s a lot of money to be made if you plan on selling a property with a current cell tower lease. If you make the right moves before selling the property, you will be able to earn revenue for future leasing rights on the property, even though you sold the property. Many people don’t release this and end up losing the right to future earnings. The amount you make in future tower leasing could be worth more than what you are trying to sell the property for, so it’s worth investigating.
• You have additional opportunities you can explore if you are interested in selling a property that has a cell tower lease. You may be able to arrange it to where you receive monthly rent from the arrangement. This is an area where you will need to get an expert opinion on since there are issues that will need to be considered.
• Many people feel rushed to agree to a lease renewal long before their current one is up. Avoid doing this because it’s usually a sign that you will not be getting the best deal. When you get closer to the time for your lease to be renewed, that’s when the rent offers will tend to be the highest. Remember, they need your land and will want to work with you to keep you happy. Patience will likely earn you more money.
• Always keep in mind that the person who is trying to get you to sign a cell tower lease, renew one, or make a modification to one, is likely working on commission. They have a vested interest in getting you to agree to the terms quickly so they can get their payment. They will pressure you into quickly making a decision simply because they will benefit. They may tell you that your offer may be lost to someone else, that your tower may no longer be needed or is being replaced with different technology, or any number of other excuses. These things are typically not true but are only used to pressure you into making a quick decision so that they can close the deal.
• Cell companies will try to get you to make material changes to the site without any formal amendments. If they can do this, it will save them money. Don’t let them get away with making changes without taking steps to do the amendment, including for such things as antennas. When amendments to the original contract are made, there is usually an increase in the rent you will receive.
• You may not realize it, but you actually have a lot of power in the cell tower lease process, especially when it comes to renewals. The company has built a network around your location, so they need you to renew. They may make you feel like they will move the tower if you don’t meet their demands, but that’s highly unlikely. Don’t be bullied by them because they need you. Be patient and work to get the terms you want and deserve.
• Every cell tower contract is going to come with a lot of fine print. It’s the stuff that people typically don’t read when they are signing the contract. It’s essential to pay attention to the fine print or work with a consultant who will. That fine print verbiage is put there to protect that company, not you, so it’s crucial that you know what it says and that you agree to it if you are going to sign your name.
• Exercise caution when it comes to first refusal rights. You need to pay attention to them, know what they mean, and agree to them before going forward with signing anything. Ideally, you will want to get rid of them, or at the least limit their powers. If you don’t, it could cost you a lot of money in the long run.
• Make sure you read the fine print on every contract and amendment. I mentioned this earlier, but it’s worth mentioning again because it’s so important. The fine print contains power, making it vital that you know what that power is and how it could impact you.