Negotiating cell tower leases is difficult when neither you nor your attorney speak the legal jargon of telecommunications. How can you be sure that the cell tower lease rate you are negotiating is fair market value? Although your attorney may have helped you close real estate deals, handled litigation or other complex transactions in the past, and may even be a good friend, chances are that in 99% of all cell tower deals, they don’t care too much. for leasing cell towers, or how to deal with operators.
Imagine the following cell tower lease scenario. Imagine that cell phone operators and their lawyers are a pack of hungry lions. The owners and their attorney are a young animal separated from the herd. Without proper protection, you don’t stand a chance. Wireless carriers and their attorneys will impose their terms on you, especially if you or your attorney do not speak telecommunications legal jargon. By the time you realize what’s going on, it’s already too late; you have agreed to terms of your cell tower lease that you are not happy with, your attorney has negotiated your way out of the deal, or you have moved elsewhere. Either way, you’re dead.
Here’s the scoop on cell tower lease fees that cell phone carriers don’t want landlords to know about. Wireless carriers pay their real estate site acquisition leasing contractors high commissions for executing cell tower leases at certain prices. The better the terms agreed in favor of the carrier, the greater the bonus paid to the lessor. Now, there is nothing wrong with this, as we live in a free market society, but if you own property and a carrier wants to lease space from you for a tower or rooftop cell site, you need to make sure that is maximizing your income
Misconceptions about cell site leasing:
Property owners and owners often turn to a cell site expert for comparative lease rates paid by nearby cell carriers to determine what they should be getting as fair market value.
Similarly, cell phone carriers often push back during lease negotiations saying that no landlord is getting what they’re asking for.
Here’s the 411. Neighboring landlords with existing cell tower leases could have negotiated horrible rates and terms, and cell phone carriers may be literally scamming and scamming landlords and placing cell towers wherever they can find an owner willing to take a Earth. cheap rental rate, and does not reflect fair market value.
All the research and fair market value data on lease rates is completely worthless if you don’t know how the cell tower lease negotiation game is played.
Think about this…
At a lease rate of $2,000 per month or $24,000 annual rent, if you accept 2% annual rent increases instead of 3% annual increases, you will receive $132,000 LESS over the 25-year term of the cell tower lease. Now let’s say you have a monopoly cell tower from 4 or 5 carriers and all your leases are at 2% instead of 3%. Now we’re talking over half a million dollars in lost revenue due to the terms of the leases. OH!!
Now, here’s the minor detail that will make you laugh or cry about cellular antenna leasing fees. The cell site acquisition subcontractor we told you about a few paragraphs ago could make a bonus of $500 to $2,500 for saving the operator the $132,000 they were going to pay if he had agreed to the best terms.
Are you negotiating cell tower lease rates on an equal footing with cellular carriers?
