Your Tower Has a Second Tenant — So Why Aren’t You Getting a Second Rent Check?

Let’s talk about the business model of a tower company, because it’s instructive. They lease ground or rooftop space from you — the property owner — at a fixed monthly rate. Then they turn around and lease antenna space on that same structure to wireless carriers. Not just one carrier — ideally, as many as the tower will support. American Tower alone owns and operates over 43,000 towers in the United States. Their revenue does not come from building towers. It comes from filling them. Every carrier that co-locates on a tower generates additional revenue, on top of what the tower company is already paying you. None of it goes to you — unless you negotiated it that way.

What Revenue Sharing Is

A colocation revenue share provision in a cell tower lease entitles the property owner to a percentage of the rent paid by any additional carriers who co-locate on the tower. In practical terms, if a tower company charges a second carrier $2,000 per month to co-locate, and your lease includes a 20% revenue share, you’d receive an additional $400 per month — $4,800 per year, $144,000 over 30 years — on top of your base rent. That’s not an insignificant number, and it compounds if a third carrier is eventually added.

The percentages vary. What’s consistent is that the value is real, it accrues over the life of the lease, and in the current environment, tower companies are actively working to remove revenue share provisions from leases whenever they get the chance.

The Quiet Removal

Here’s what’s been happening in the market: as tower companies have consolidated control over cell site assets — buying up carrier-owned towers and rolling them into large portfolios — they have also been updating lease agreements. And “updating” often means reducing or eliminating colocation revenue share provisions, and adding other provisions more favorable to them — not you. Many developers now present lease agreements with no revenue share language at all. If a property owner doesn’t know to ask for it, it simply isn’t there.

A property owner who signed a lease ten or fifteen years ago may have a revenue share provision they’ve forgotten about — or may have unknowingly signed it away during a lease amendment or extension process. We have seen this happen. The amendment is presented as a routine update, and buried in the revised terms is the removal of colocation revenue sharing. Nobody highlights it. Property owners who are not carefully represented often miss it entirely.

If You Have an Existing Lease

The first step is knowing what your lease actually says. If you have a tower or rooftop cell site on your property, pull the lease and look for language about colocation, subleasing, sublicensing, or additional tenants. If revenue sharing is addressed, understand the percentage and how it’s calculated. If it’s not addressed — or if a recent amendment removed it — that’s important information.

If You’re Negotiating a New Lease

Do not leave the negotiating table without a colocation revenue share provision. Tower companies will push back. They may say it’s not standard, that they can’t get it approved internally, or that the rent they’re offering already reflects it. However, revenue sharing is a legitimate component of a property owner’s compensation, and a competent advocate can negotiate for it.

Gunnerson Consulting works exclusively for property owners. Contact Gunnerson Consulting today — your first consultation is always free.