Should You Renew Your Cell Tower Lease?
Until the dawn of the smartphone, wireless carriers were losing money by the billions. Even recently, Sprint continued to struggle until purchased by T-Mobile in April 2020. Many companies went bankrupt. Others sold off assets to survive or merged to be competitive. The industry has proven to be extremely capital intensive and through the dot.com crash and market bubbles there were periods where capital was very hard to come by for startup wireless companies. Wireless carriers twenty years ago could not pay much for tower leases. Fast forward to today; the industry makes billions of dollars in profit each month because software applications like Twitter, Facebook and Google Maps have become part of everyday life. Yet property owners’ leases and rents are stuck in the 1990s and 2000s since cell tower rent rate increases never caught up with exponential wireless profits. Many property owners today are missing out on significant rent revenue from wireless carriers simply because they don’t realize the proper ways to maximize income from their cell tower lease renewals or extensions in the smartphone era. With first-hand knowledge of traffic engineering, call volumes, and data throughputs of our clients’ specific cell site positions, Terabonne places our clients at a competitive advantage when negotiating cell tower lease extension and renewal.
Cell Tower Lease Extension
Crown Castle, American Tower (ATC) and SBA Towers are the “Big Three” tower companies that control most cell towers in the US. Over the years, other wireless carriers and smaller tower companies raised cash to grow their wireless networks by selling most of their cell towers to these three tower companies. Those tower leases negotiated decades ago are now close to expiration and the tower companies are looking to extend the wireless leases for another 30-50 years at 1990 rent rates, all from unsuspecting landlords. While it is in the tower companies’ interest to reduce their rental expenses to increase profits, it is Terabonne’s mission to make sure property owners are getting what they deserve and are being contractually protected. After seeing thousands of property owners renew their cell tower lease with tower companies and wireless carriers for cheap, we have made it our priority to level the playing field and help our clients realize the full potential of their cell tower lease.
Cell Tower Lease Renewal
Cell tower leases nearing expiration require renegotiations in order for cell sites to continue operating at their current location. This is not like extending a standard commercial or residential lease. Wireless leases negotiated 20 to 30 years ago in the infancy stage of the industry have drastically evolved. Your cell tower or rooftop lease was likely negotiated between 1990 and 2000 when the wireless industry was just starting to learn how to engineer, lease, zone, construct, and operate cell towers. During those early years, wireless carriers rushed to get their cell towers up and running as time-to-market was crucial to launching new wireless companies. Mistakes made in the early days still show up in tower leases today. What are those mistakes? Improper surveys. Ill-defined easements. Trespassed utilities. Fenced areas larger than leased space. Greater structural loading than allowed. Improper tapping of landlord electrical meter. Improper structural analysis. Missed payments. Failed tax reimbursements. Sites built without proper zoning. These early negotiated cell tower leases will continue to lack appropriate protections for property owners unless Terabonne experts identify and correct them upon renewal negotiations.
Renegotiating Leases with Specific Carriers
Cell tower lease terms vary with different wireless carriers and tower companies. Years ago, Crown Castle, American Tower (ATC), and SBA Towers did not exist in the form they do today. They materialized by purchasing cell towers from the wireless carriers to whom you originally leased your land. Most of those wireless carriers do not exist today due to the mergers and acquisitions in the past decades. BellSouth leases are now AT&T. PacBell leases are now scattered between AT&T and T-Mobile. And wireless carriers have sold many of their cell towers and leases to tower companies. Understanding the original terms you negotiated years ago with the original tenant, and how your current wireless tenant wants to change those lease terms is important to modernize the lease terms to your favor. More importantly, engineering specifications from decades ago were deficient and vague, often implicitly favoring the wireless tenant’s unlimited use of your property without proper compensation to you. If you negotiated the original lease, this is likely the last opportunity in your lifetime to update the lease with new terms and requirements to compensate you properly, as the property owner, and limit your risks appropriately.
Let’s discuss your cell tower opportunity. We will share with you what we know about your cell tower ground lease. Never a fee until we agree to work together and we deliver all-inclusive results to your satisfaction. Unheard of assurance and confidence. Please email, call or send us a message anytime.