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Cell Tower Lease Extensions | 3 Industry Secrets

By Nick G. Foster

February 7, 2014

Cell Tower Lease Extensions and Renewals

Many cell tower companies such as AT&TVerizon, Crown Castle, and American Tower are aggressively pursuing cell tower lease extensions. Also known as lease renewals these companies are contacting landlords sometimes up to twenty years ahead of lease expiration.

They hire agents such as MD7, Blackdot, The Lyle Company, Tower Alliance, or local site acquisition companies, to secure lease extensions with landlords with business terms that are in favor of the cell tower company – not you the landlord.

We want to share with you 3 industry secrets that cell tower companies don’t want you when it comes to cell tower lease extensions.

1. They Need You Way More Than You Need Them

Your cell tower tenant has invested hundreds-of-thousands of dollars into their cell tower on your property. No matter what they tell you they need you way more than you need them. Your tenant is not motivated to demolish their tower and to construct a new cell tower nearby anytime soon. This is due to two key reasons: cost and time

The cost of demolishing their cell tower and constructing a new cell tower nearby will run in the hundreds-of-thousands of dollars. Depending on the cell tower type demolition costs can exceed $50,000.00 and constructing a new tower nearby can exceed $200,000.00.

It will also take your tenant a considerable amount of time (sometimes years) for the cell tower company to (i) receive budget approval to pursue a relocation, (ii) identify new landlord candidates, (iii) negotiate new leases and (iii) to receive governmental approvals (permits) to construct.

You have a significant amount of leverage in cell tower lease extension negotiations, much more than your tenant will ever let on. 

“I met with Nick at my property and engaged his services to assist us with our lease renewal. Nick was very professional, timely, and obtained results that greatly exceeded his fees. I would highly recommend Nick’s services to any landlords that have cell tower leases coming up for renewals!” – Kenny Mar, Managing Partner, MAR Investments

2. All Lease Terms Can Be Discussed For Renegotiation

Their agent may say they can “only” secure an additional lease term, or they can “only” offer a “Signing Bonus” of a few thousand dollars. The truth is anything you want to discuss can be brought to the negotiating table.

Are you receiving a fair rent and a fair rent escalator? Do you have concerns regarding taxes, utilities, or redevelopment?

Utilizing a decade of cell tower leasing experience we can secure the highest rents and the most favorable terms in your cell tower lease extension. Call us today to receive a free consultation to help you identify any key provisions that need to be improved on.

3. A Longer Lease Term May Not Be In Your Best Interest

A majority of cell tower leases include very favorable one-sided termination clauses for the benefit of the tenant. This typically allows the tenant the right to terminate the lease in sometimes as little as 30 days.

A cell tower company’s agent may say securing multiple extension terms will guarantee you rent for years to come – however, all multiple extension terms do is lock-in the landlord for a longer period of time.

The tenant still retains their quick 30 day termination right. So while the landlord thinks they have a 10 year lease with a tenant, what they really have is a 10 year obligation to their tenant and the tenant has only a 30 day obligation to pay rent to the landlord. Not really fair and balanced.

It is important to receive expert cell tower consultation to ensure an expert is working to secure your best interest. Cell tower companies routinely hire experts to secure their best interest in every negotiation, shouldn’t you?

Have A Cell Tower Lease Question?

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2 Comments

  1. Brenda Summerlin on August 9, 2019 at 11:15 am

    Hello we have spoken in the past but we have a tower lease agreement expiring in 2032. They want to renew it for another 25 years now they tell me AT&T want to upgrade the equipment but don’t want to it without a long term agreement. They are offering same rates (very low) and a 20k signing bonus, which in my opinion is nothing. I told Jody with American Tower today that we would not sign the offer because we felt the rates were to low and we have until 2032. She asked me what we wanted but I am not sure.

    Would you guys handle something like this and if so what are your rates.

    • Nick G. Foster on August 10, 2019 at 11:45 am

      Hi Brenda,

      It is always good to speak with you. Typically when a cell tower lease is expiring sometime over 10 years out, it is a waste of time to entertain these offers. In this case, the lease is expiring 13 years from now, so as you noted there is no rush to extend the agreement, especially at a low rent. Feel free to call me again if you would like to discuss further.

      All the best,

      Nick G. Foster

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Nick Foster Airwave Advisors

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).

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