On February 5th, 2015, it was announced that American Tower would be acquiring the rights to approximately 11,500 towers from Verizon. As part of the agreement, Verizon maintains the right to sublease space on the towers for 10 years at a rate of $1,900.00 per month with a rate escalator of 2% per year. The deal came as no surprise for those who closely follow the telecommunications industry, as Verizon had been openly expressing their desire to offload these tower sites for many months. With the acquisition of nearly 12,000 new towers, American Tower has now surpassed Crown Castle as the company with the largest portfolio of cell towers in the United States.
This deal comes two years after AT&T sold over 9,000 of their towers to Crown Castle, a deal with many similarities to the American Tower/Verizon transaction. One similarity to the deals is that American Tower has not actually purchased the towers yet. They have only leased the rights to the towers for 28 years with the option to purchase the towers at a discounted cost at the end of the agreement. While the difference may seem meaningless, depending on the wording of your agreement with Verizon, it may play a role in how your cellular communications site is treated in the future. These two transactions are bright examples of an overall trend within the cell tower industry, of communications companies selling tower assets to companies who specialize in tower maintenance and management.
Landowners who have a Verizon tower on their property may soon have a new tenant in American Tower. Depending on your individual site and agreement, this may lead to contact from American Tower in regards to lease amendments. It is common for companies that acquire towers to attempt to extend the term of their cell tower leases on the tower in order to ensure a return on their investment. For example, many who had the newly acquired Crown Castle towers on their property were presented with lease amendments extending the term of the agreement through 2099!
If American Tower, or any other company, approaches you with a request to extend or purchase your lease, please proceed with caution or contact Vertical Consultants for guidance on handling these discussions. You should not needlessly tie yourself into an undervalued lease for decades to come. The attempts by tower companies to discuss amendments may be just the opening you need to negotiate several new terms with your tenant. Last year, on average, Vertical Consultants more than tripled our client’s rental income. We may be able to do the same for you. Call today for a free consultation.
Call today for your free consultation and for more information on how industry transactions might affect you.
In 2022, Vertical Consultants averaged an immediate 302% increase in rents being received by its clients, and since 2010, has been able to assist its clients in the recovery of over 300 years worth of combined underpaid, and, in some cases, unpaid rents and other expenses that were rightfully due to these property owners located throughout North America.
To learn more about our services, visit https://www.celltowerleaseexperts.com or contact Vertical Consultants at info(at)vertical-consultants(dot)com or 877.456.7552.