At first glance, cell tower lump sum lease buyout negotiations can seem far more complex than any kind of lease assignment you may have dealt with in the past. After all, cell phone tower lease negotiations often involve medium or large telecommunication companies, lawyers, and experienced cell tower consultants. But no matter who is sitting on the other side of the table, you will want to make sure that you don’t go into cell tower negotiations alone. Ideally, you should have both a cell tower consultant who can get you the absolute best price and an attorney who is well-versed in interpreting and negotiating cell tower assignment/sale transaction documents
However, even with expert help on your side, you will probably still have a lot of questions about negotiating cell tower leases or evaluating lump sum buyout offers from the property owner’s perspective. For example, how are cell tower lease rates calculated? How much can you expect to get for a standard cell tower lease in a lump sum transaction? What terms and conditions should you consider during the negotiations? What could cause the lease to be terminated after signing? Finally, how can a cell tower consultant help you get the most out of your next cell tower lease negotiation?
In today’s guide on cell phone tower lease negotiations, we will answer all of these questions and more. Since most property owners enter cell tower lease agreements to earn extra cash, let’s first take a look at how lease rates are calculated:
Understand How Cell Tower Lease Rates Are Calculated
As we have discussed in our cell tower lease rates guide, there are a variety of factors that come into play when calculating cell phone tower lease rates. Based on these factors, you could get anywhere from a few hundred to a few thousand dollars per month in exchange for leasing a portion of your property to a wireless carrier. In any case, here are some of the most important factors that telecommunications companies consider when making a bid for the use of your property:
- Location – Some properties simply offer more value to cell tower companies than others. If there are relatively few towers in your area and a dense population, you can likely negotiate a much higher lease rate.
- Wireless Carrier – Lease rates can vary widely from one company to another. Some smaller companies simply do not have the resources to offer thousands of dollars per month for a single antenna.
- Square Footage – While square footage is not always a factor in negotiations, it is something that you should consider. Typically, companies will use the minimum required space to save on costs, reducing the amount of money paid out to you each month.
- Expansion Rights – Eventually, most wireless carriers will need to expand or add upgrades to their antennas. For this reason, you will want to negotiate expansion rights upfront, ensuring that you get paid for all of the space that is used now and in the future.
- Local Ordinances – Local regulations can dictate how many antennas can be installed in a given area. This could affect the leasing rate, as many companies will be less willing to deal with complicated laws in a given jurisdiction.
- Residential vs. Commercial Zoning – Generally speaking, telecommunication companies and wireless carriers prefer to install towers in commercial zones. These often require less paperwork and can reach a larger population. Therefore, if you have a commercially-zoned property, you can likely expect a higher cell tower lease rate.
Negotiate The Cell Tower Lease Terms & Conditions
When negotiating a cell tower lease agreement, your main focus will likely be on the amount you receive in exchange for the commercial use of your property. However, other terms and conditions can be just as important, as they could impact your ability to control the use of your land and continue making a profit from the lease in the future. Here are a few terms and conditions that you will want to discuss with your attorney and your cell tower consultant:
- Space – Exactly how much space can be allocated to the cell tower? Can this amount be renegotiated in the future? Will the rent increase to expand the square footage?
- Upgrades – Will the wireless carrier have permission to make upgrades as needed? Will they have to request permission for each new upgrade? Will the rent increase to add new equipment?
- Access – When and how will the wireless carrier have access to your property? Do tower maintenance workers have 24/7 access to the property, or can they only access the property during certain hours and days?
- Permits & Zoning – Who will take care of any necessary permits or zoning approvals?
- Early Termination – Can you and/or the wireless carrier terminate the lease agreement early? If so, will you be compensated for some or all of the amount promised for the remaining time left on the contract? How much advance notice will they provide you?
- Lease Extensions – How many renewal terms are included in the initial lease and does the lease automatically renew? Does the rent escalate on each renewal term or annually?
- Collocation – Can multiple tenants sign on to a single tower lease?
- Right of First Refusal and Consent- Does your lease proposal contain a ROFR, Rental Stream or Consent clause, which impedes you from selling or assigning the leases to a third party without the carrier’s consent?
While these are some of the most important terms and conditions to study, this is not a comprehensive list. There may be other factors to consider. By working with a cell tower lease consultant, you can rest easy knowing that you have covered all the bases before, during, and after the negotiation.
Avoid Situations Which Cause The Lease To Be Terminated After Signing
In most situations, a wireless carrier will confirm that your property will provide a functional space for their cell tower before entering negotiations. However, complications can always occur after you have signed on the dotted line. For this reason, it is best to have an ironclad contract that protects in you the event that structural, environmental, regulatory, or zoning issues arise. The combination of a solid contract and an experienced consultant can make sure that you get fair compensation, even if the lease is terminated early by the other party.
Use a Cell Tower Consultant To Negotiate On Your Behalf
While the information above should be a great starting point, how can you ensure that you are getting the best deal with a cell tower lease negotiation? The answer: working with an independent cell tower consultant. Independent consultants do not have any hidden contracts or agreements with wireless carriers. This means that you can go into the negotiation with someone who truly has your best interests in mind.
Nexus Towers provides independent consulting services for property owners who do not want to go into cell tower lease negotiations alone. Our consultants can offer the guidance and professional services you need to understand a lease agreement and avoid any potential pitfalls. When reviewing a cell tower lease there are 7 key points every landlord needs to understand. This guidance is covered in our Free lease analysis. If you need further guidance like an experienced Telecom attorney, then Nexus has you covered. We are not only in association with a team of attorneys who live and breathe cell tower lease agreements, but we have negotiated discounted rates for our Clients. Even if you only received our free analysis you are a Nexus Client and will receive the discount. We do this s to ensure that wireless carriers do not try to make you agree to a “bad deal.”
With years of experience in the cell tower leasing space, Nexus Towers consultants offer far more than just a helping hand. We can ensure that you get the best rates while also helping craft strong contracts that keep you protected from predatory companies or unfair litigation. In short, Nexus Towers’ consultation services can provide you with all of the tools and knowledge you need to negotiate your next cell tower lease agreement with confidence.
Are you a property owner who has been approached by cell tower companies? Are you interested in leasing your property or looking for a cell tower lease buyout? Do you need help navigating an upcoming cell phone tower lease negotiation? If so, be sure to contact the experts at Nexus Towers today!