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Right of First Refusal (ROFR)

Tower Lease 101 > Right of First Refusal (ROFR)

Right of First Refusal in Cell Tower Negotiations

ROFR and Cell Tower Transaction Implications

A ROFR only matters to property owners if and when they decide to transfer their cell tower lease assets. Unfortunately, poorly negotiated leases allow this term to be too broad and do result in adverse implications to landowners in the future. Terabonne negotiators do grant ROFR rights to tower developers in some instances, but at some returned benefit to our property owner clients. We very narrowly define this right so that only in very specific situations can a wireless carrier or tower company exercise such rights during a property transfer involving our clients’ properties. For example, transfers of property title, even if it involves the cell tower lease, to family members, during estate planning, third-party fee simple purchases, etc. are all excluded from any ROFR rights granted to wireless tenants in our leases.

Having your wireless tenant (tower owner) review your property offers will delay the transaction you are considering. The length of delay depends on how clear and succinct the language was negotiated and written. If there are disputes about the language or interpretations, the delay is even longer. Suppose in the future you sell or quit claim your property to your children, does this qualify as a “sale” contemplated under the ROFR? If so, this transaction has to be reviewed by the wireless tenant, and they get to decide if they want to buy the property at the same terms offered to your child instead. If this is not your intention, the time to fix it is now before the lease is signed. Understanding our clients’ plans for their properties and having a long-term relationship with our clients motivate us to treat every lease negotiation as if it were our own property.

Terabonne’s Full Service Representation

Terabonne represents private property owners, farmers, commercial property owners, corporations, timberland owners, churches, universities… When we represent clients, we represent all aspects of wireless leasing and management for our clients. If there’s a dispute as to taxes, surveys, hazardous spills, back rents, road maintenance, encroachments, engineering designs, or rooftop structural loading; our staff is in the middle of it all. This includes right of first refusals and how to negotiate around such requirements. Many consultants who worked primarily in the cell tower buyout area tend to overemphasize ROFRs because of its impact on their business. When selecting a cell tower consulting firm, their depth and breadth of experience in the wireless industry is key criteria since one never knows the kinds of issues a cell tower design will encounter over the years.

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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.