Many people contact Gunnerson Consulting to ask if they should accept an offer to extend their cell tower lease. Our answer is typically: Absolutely - when the situation is right!
In the past few years, many property owners have seen their cell tower tenant change from a wireless carrier (i.e. Verizon, AT&T, T-Mobile, Sprint, etc) to a cell tower company (i.e. American Tower, Crown Castle, SBA, etc). Most tower companies have entire departments focused on requesting lease extensions from their landlords.
The typical model in approaching a cell tower landlord is to send a letter to the property owner requesting a lease extension. This letter is followed by a phone call from a representative asking if the property owner is interested in renewing the lease.
If a property owner is interested in renewing the lease, the tower company typically proposes the terms. Most property owners are not in a position to know if the rates and lease terms offered by the tower company are reasonable. Many property owners simply accept the first offer from the cell tower company to renew the cell tower lease - without understanding how their lease compares to the overall market. In our experience, the lease extension documents typically also include terms that are not part of the current lease, and may change the value of your lease over time.
One of the factors to consider when renewing a cell tower lease is how long your lease currently has before it expires. If a lease has 15 years left before it expires (including all renewal terms), there is typically little need for the tower company to renew the lease. If, however, your lease expires in six months, there is a very pressing need for both the landlord and tower company to renew the lease. With cell tower leases each situation is different, and should be closely reviewed to determine what items will add value as well as what will reduce value to both landlord and tenant.
Another trend in cell tower lease extensions is to add provisions that seem innocuous, but that may impact your site dramatically. Frequently rights of first refusal, premises expansion, power of attorney delegation, etc. are added to leases. These may seem innocent and are presented as services to prevent the owner from being bothered by daily cell tower-related activities, however they can impact your ability to manage your cell tower tenants and their use of your property.
Gunnerson Consulting has a depth of experience with cell tower leases. We provide cell tower consulting services solely to property owners, property managers, and their attorneys. We also have created one of the largest independent databases of cell tower sites. By combining our experience, information, and industry contacts, we provide our customers with the knowledge and assistance they need to make informed decisions.
How and when you renew your cell tower lease can literally be a million dollar decision over the course of the lease. Your initial call with Gunnerson Consulting will cost you nothing. NOT speaking with us may cost you thousands!
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