If property owners focus on three basic cell tower lease principles, it will assist them in not only getting more cell tower rent, but also in getting the best overall cell tower lease agreement. This would be beneficial not only today, but going forward over the life of the cell tower lease agreement, serving as a passive revenue asset for not only years, but for decades into the future.
A property owner should not give up too much time or, more particularly, the overall term of the cell tower lease agreement. Cell tower companies will approach a property owner either for a new cell tower lease agreement or even a property owner who has an existing cell tower lease agreement and ask for a total of up to one hundred (100) years of total cell tower lease term.
It is important that a property owner understands when a cell tower company signs a new cell tower lease agreement or extends an existing that the cell tower company is not committing for any period of time, and that a property owner and their land may be locked in for up to one hundred (100) years.
As a result, a property owners should limit the amount of time or cell tower lease terms they provide the cell tower company under the cell tower lease agreement.
This will actually allow a property owner to re-enter into the cell tower lease agreement and renegotiate sooner than later.
A property owner should make sure that they do not give up too much of their property to the cell tower company when signing a cell tower lease agreement. Cell tower companies will sometimes demand up to ten thousand (10,000) square feet of land for the installation or construction of a cell tower.
Simply stated, the cell tower companies really do not need the ten thousand (10,000) square feet, or anywhere close to that much space to build out the cell tower and ancillary telecom equipment.
So, why does a cell tower company ask for such a large portion of your land? First, they won’t ever have to come back to you and ask for additional land, and they’re actually going to take that excess land that you give them and sublease it out to other companies and make money from it.
The cell tower companies will be making additional revenue from your land (they are not improving those areas) and you, the property owner, will not see one additional dollar of rent. Essentially, all they did was take your land and lease it to another party. If a property owner only allows the cell tower company to lease an amount of space that they actually need, if additional space is needed for third parties wanting to lease space on the cell tower, then that third-party company will need to come to you directly. You can then lease the space to them, and that means additional money in your pocket and not in the pockets of the cell tower company.
Most cell tower companies want unrestricted use of your property, which literally means that after you sign the cell tower lease agreement, the cell tower company can add, modify, or upgrade the cell tower or the equipment on the cell tower without your approval. That means that the cell tower can continue to upgrade the cell tower site and get more and more value from your land without having to pay you any additional cell tower rent.
A property owner should limit what a cell tower company can do on their property so that the property owner can make sure that the cell tower company must come back to them to renegotiate based upon not only how much space the cell tower company is occupying and using, but on what they are doing on the property and the value or utility they are deriving from that space.
If property owners can understand the above three basic principles, they will be able to get a better cell tower lease agreement not only today, but going forward over the life of the cell tower lease agreement.
If you have a question regarding a cell tower lease, contact us today.
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