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 be great news for you if you are a landlord. Verizon is a credit worthy tenant 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. Their representatives are professionals in cell tower leasing and 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 to recent federal legislation (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
[blockquote cite=”Sam H., President, Cal-Sorrento”]Nick was able to more than double the monthly rent we had previously negotiated for a cell tower on our property…plus a significant signing bonus! There are several aspects to these deals that only someone with a detailed understanding of the market can explain. [/blockquote]
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, where the landlord will be able to secure additional rent. The reality is that those collocation opportunities rarely – if ever – happen. Make sure you do not get distracted with future promises. Focus on what is actually in front of you right now – that is what is most important. Airwave Advisors will be happy to help you secure the strongest lease economics available.
3. Have a Pro Tackle Verizon’s 36 Provision Agreement
Verizon has the lengthiest lease agreement of all major US carriers. Verion’s 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 can include approximately thirty-six provisions and we suggest that you engage professionals, such as Airwave Advisors, to ensure that your interests are being protected..
One notable provision that should be removed immediately is the “Right of First Refusal“ provision. Should you ever want to consider selling your lease for a lump sum payment, this provision will absolutely destroy your chances of obtaining the highest offer in the market. Why is that? Many potential buyers for cell tower leases simply won’t spend the time nor energy to bring you a competitive offer since they know, with the “Right of First Refusal” provision, Verizon will likely purchase the lease and they will be left with just spent resources. As a result, you will not receive the largest and most competitive offers. Learn more regarding “Cell Tower Lease Buyouts” here.
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 professionals 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).