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Why Does A Telecom/Tower Company Need To Expand Its Leased Area?

More and more property owners are receiving requests to expand the size of the area they are leasing to a cellular company. The reasons that these companies are asking to lease additional ground space or an area beyond what was described in the original cellular lease can vary. Below are some of the reasons why a wireless carrier or tower company may be looking to expand its current area:

Subletting. A cell tower company’s primary focus is subletting space on their tower. The original lease that was entered into most likely did not allow for enough ground space to add the maximum number of tenants at the tower site. Now, these same companies are having to request additional land to satisfy these needs. A cell tower company’s need can be your opportunity.

Telecom Consolidation. Another reason for a request for an amendment to your lease and, more particularly, the land being used, may be a result of the ongoing mergers and acquisitions, such as the AT&T, T-Mobile, and Metro PCS that have recently taken place in the industry might be contacted with requests to expand upon existing leases. These cellular companies will now need to potentially consolidate equipment on one tower, which will mean the need for additional space and opportunity for you.

Evolving Technical Requirements. Wireless carriers are always evolving and part of that evolution is the need to provide new services or technologies to their customers. Companies like Verizon, AT&T and Sprint are in a race to update their equipment to stay ahead of the other. As a result, they will need more space for the equipment required and, again, this provides you, the landlord, with a way to not only get more rent, but to establish better overall lease terms going forward.

 

The cellular companies often work to obtain the additional lease areas without any additional rent. They do this by diminishing the real need of the requested space and pushing the property owner to sign either an amendment or a consent document as soon as possible. They do this to make sure the landlord does not have the opportunity to discover the value of additional revenue they might otherwise receive for lease area expansion.

A property owner should understand what is truly being asked of him or her, including: (1) How much area is being requested, and does the tenant really need all of that area, or are they getting extra space for future expansion as well? (2) What is going to be the true impact of the expanded area on your property now and into the future? (3) What is the “true value” of the space that is being requested? (4) Do you have the opportunity to not only increase rent, but to get a better overall lease?

Remember that the value of any requested additional area is not tied into the value of the space, but to the utility of the space to the wireless carrier or tower company requesting the leased space. Determining this utility is something that we can assist you with and, ultimately, optimize the value of this opportunity. Contact us today to get the most out your lease today and going forward.

Results Matter: In 2016, Vertical Consultants averaged a 322% immediate increase in rents being received by our clients. We get results by being the only full-service telecom consulting firm that can handle your telecom, real estate and legal questions all under one roof. No other consulting firm can say that, nor can they match our results. “Advice is Nice but Results are Better”