(article updated on October 17, 2019)
The Value Of Your Verizon Cell Tower Lease
With a market cap of over $133 billion Verizon Wireless is THE 800 pound gorilla. However do not fear! The financial strength of Verizon can translate to a credit worth tenant to you if you are the landlord. Verizon is a very stable wireless providers with a low risk of removing their cell towers in the near future.
It is important however not to be taken advantage of when dealing with the 800 pound gorilla that is Verizon. Their real estate representatives are experts in cell tower leasing. Their goal is to secure the lowest rental rate, with the most favorable lease terms for Verizon – not you the landlord.
In the spirit of David vs. Goliath, we want to share with you a few tips on leasing to Verizon:
1. Capture Rent With Verizon’s Expanding Footprint
Verizon is one of the few US carriers pro-actively installing cell tower generators outside their lease area. This action is in response federal legislation requiring cell tower lease generators at all locations (read more about it in our Cell Tower Generator blog post here).
Verizon has been actively expanding their footprints along with their initial plans presented to landlords. This presents you with a time-sensitive opportunity to renegotiate business terms and to achieve a fair market rent. If Verizon expands their lease area, that is worth more rent paid to you, but how much more?
2. Focus On Current Lease Economics, Don’t Get Distracted
Often Verizon, or their representatives, will try to negotiate a low rental rate with a promise to the landlord that there will be collocation opportunities in the future. This may be a pipedream. The tenant is trying to sell that the landlord will be able to secure additional rent in the future. The reality is that those co-location opportunities rarely – if ever – happen.
Make sure you do not get distracted with future promises. Focus on the cell tower lease economics that are in front of you right now – that is what is most important. What is the rent they are proposing to pay you? What is the proposed rent escalator? How long is the entire cell tower lease agreement?
3. Have a Pro Tackle Verizon’s 36 Provision Agreement
Verizon has the lengthiest lease agreement of all major US carriers. Verion’s cell tower lease has been carefully crafted by their attorneys to secure the best rights for Verizon. This lease looks out for Verizon’s best interest, not yours. The lease typically includes approximately thirty-six provisions. We suggest that you engage professionals, such as Airwave Advisors, to ensure that your interests are being protected.
4. Always Say No To A Right Of First Refusal
Should you ever want to sell your cell tower lease for a lump sum payment, this provision will absolutely destroy your chances of obtaining the highest offer in the market.
Many potential buyers for cell tower leases simply won’t spend the time to bring you a competitive offer since they know, with the right of first refusal provision, Verizon will likely purchase the lease. As a result, a right of first refusal provision removes your ability to tap into the free market. It guarantees you will not receive the largest and most competitive offers with your cell tower lease buyout.
Remember that Verizon and the professionals they hire are not looking out your best interest. Airwave Advisors can help you secure the highest rents with the most favorable lease terms when leasing with the 800 pound gorilla. Verizon hires 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).