AT&T Cell Tower Lease Activity
Yesterday AT&T announced first quarter revenues of $32.5 billion. That’s billion with a B. There is no question that AT&T is a financially strong tenant to have paying you rent. It is important however not to be taken advantage of when negotiating with this 800 lb. gorilla. Their contractors who are all pros in cell tower leasing are incentivized to get the best deal the AT&T. Remember, AT&T would like to secure the lowest rental rate with the most favorable lease terms for AT&T, not you the landlord. In the spirit of David vs. Goliath, we want to share with you 3 tips on leasing to AT&T:
1. Counter All Business Terms To Ensure A Fair Deal
All business terms presented by AT&T and/or their representatives are terms AT&T would like for the minimum amount they think you will accept. With this in mind all terms are negotiable: rent, rent escalators, even the length of the lease term. No matter if you are discussing a new lease or an expansion on your property, this presents a time sensitive opportunity for you to negotiate terms with market rent. If AT&T wants to expand the lease area, that is worth more rent in your pocket.
2. Focus On Current Lease Economics
Often AT&T or their contractors will try to negotiate a low starting rental rate with a promise to the landlord that there will be rent increases or more tenants down the road. Don’t get distracted. Capture the highest rents with the most favorable lease terms now and then plan for the future. The reality is having additional tenants come knocking on the door may never happen. Focus on what is in front of you right now, that is what is most important.
3. Have An Expert Tackle AT&T’s 24 Provision Agreement
[blockquote cite=”Brenda F., Director, BBL Commercial Real Estate”]Nick is the BEST at cell site negotiations! He is our go to consultant. Nick is always available and gives 150% to please his customers. We trust and endorse Airwave Advisors![/blockquote]
AT&T has the second longest lease agreement in the industry. This agreement has been carefully crafted by AT&T’s attorneys to secure the best rights for AT&T and to look out for AT&T’s best interest, not yours. The agreement can run approximately 24 provisions and we suggest you engage a professional such as Airwave Advisors to remove language that is not in your best interest.
One notable provision that should be removed immediately is the “Right of First Refusal“ provision. This provision will absolutely kill any market for you should you ever want to consider selling your lease for a lump sum payment. How does it kill the market? Many potential buyers for cell tower leases simply won’t bid on leases with a “Right of First Refusal” provision. In their experience it is a waste of time to bid on a potential investment where Verizon has the final say on if they will purchase the investment or not. This kills your market and to receive the highest most competitive offers, this provision should be removed. Read more regarding “Cell Tower Lease Buyouts” here.
Remember that AT&T hires professionals to look out for their best interest. Airwave Advisors can help you secure the highest rents with the most favorable lease terms when leasing with this 800 lb. gorilla. AT&T hires cell tower lease experts to secure them the best terms, shouldn’t you?
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About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).