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Signed Lease Does Not
Mean Rent Is Coming

Articles > Not Every Signed Tower Lease Turns To Rental Income.

Not Every Signed Tower Lease Turns To Rental Income.

Once we take on a new site build project, we work with our clients to share the design, negotiation process, site visit timeline, expectations, industry practices, schedules, risks, benefits and competition on every site we engage in. A shared understanding and strong partnership between Terabonne and our clients at the very start of the process is critical in order to obtain the outcome our clients desire. Although the end result is not just a signed lease agreement, it is a significant milestone. Furthermore, knowing the intentions of the wireless carrier puts us at an advantage. Every Search Rings has at least three cell tower site candidates that the site acquisition agent is required to bring back to the wireless carriers as options to choose from. These three cell tower site candidates are categorized as: Primary, B, or C. Our goal is to get our client’s location categorized as the primary candidate. 

We need to know which candidate we are, and how to become the primary candidate. That’s Job #1. We don’t want to negotiate the lease for the next 12 months to be a third backup that has obligations to the wireless carriers but the cell tower rent may never materialize. Wireless carriers have many development requirements that need to be met before commiting to a site, therefore they will only sign a “lease option”. A lease option gives the carriers the right to turn the cell tower lease option into a cell tower lease, but does not obligate them to lease from the property owner. If a site fails for whatever reason, the wireless carriers will go to backup sites, which are candidates B and C. Once we’ve secured our client as the primary candidate, the real work can begin. Wireless leasing agents often use candidates B and C as leverage against the primary candidate to try and get better terms. For example, our client Hubert Bellman, a landowner in Parkton, Maryland, received a copy of his neighbor’s cell tower lease from the wireless carrier in an attempt to prove that Mr. Bellman’s demands are excessive. This only revealed that the wireless carrier negotiated with the neighbor to make that neighbor believe they were getting a cell tower lease when in reality, the negotiations were nothing more than a bargaining chip and wasting the neighbor’s time. This is why understanding industry practices, tactics and intentions are vital to the success of our clients’ goals. A cell tower lease is merely a single gear in the complex machinery of cell tower network design and development.

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A ROFR grants the tower owner the right to match an offer by some third party who makes an offer to purchase your lease that you accept.

Crown Castle, American Tower ATC, SBA Towers are the “Big Three” tower companies.

Attorneys retained by wireless carriers authorized to review legal terms but never allowed to negotiate financial nor technical terms of the lease because they lack the technincal skills.

A person who specializes in land use matters well knowledgeable in its jurisdictional requirements.

A person hired by the wireless carrier to contact property owners to discuss lease terms. This role has evolved to be landlord facing rather than lease negotiations.

Geographical areas depicted in a circle (ring) drawn by radio frequency (RF) engineers defining the areas requiring new cell towers and technical parameters surrounding such designs.

Companies who build towers and lease back to wireless carriers.  These companies almost always receive Search Rings from wireless carriers defining where carriers need towers to be built.

Radio Frequency engineers who specialize in the radio wave propagation. These are the engineers to define cell tower locations. 

Companies that purchase cell tower leases with the purpose of repackaging (aggregating) them in a larger portfolio and selling them for a profit at a later time.