How To Succeed As A Cell Tower Landlord

Some useful tips and suggestions to help you make the most out of leasing your space to Big Wireless.
Congratulations, you’re a cell tower landlord. It’s like winning a big lottery scratch off ticket that pays off over 30 years or more. But here’s the catch: the wireless industry is crawling with people who’d sell their grandmother’s dentures to shave a few bucks off your lease.
Know What You Are Dealing With
The Tenant and their representative from the wireless industry isn’t your friend. Big Wireless is a machine built to maximize profit, and you’re just a line item they’d love to shrink or eliminate. Let’s meet the usual suspects.
The Carriers
Major carriers in the USA are AT&T, Verizon, T-Mobile, DISH and US Cellular. They own and operate the wireless networks and lease your land for towers or rooftop to mount their equipment.
Tower Companies
The major tower companies are American Tower, Crown Castle, SBA Communications and Vertical Bridge. These are powerful middlemen who own, operate and manage towers and sublease tower and ground space to carriers. They’re obsessed with “optimizing” their portfolios, which often means squeezing you for lower rent or buying out your lease.
Lapdogs to the Wireless Industry
These are third party “lease consultants” mostly based in Southern California who have made their living by working on behalf of the carriers and tower companies, often as “private label” consultants to give “rent guarantees” and get landlords to enter into “lease optimization” programs to “optimize” lease agreements in favor of the tower company or carrier in order to make the cell site “more valuable to the network”. The key takeaway is that the optimization will always favor them and never favor you. They threaten and scare landlords into signing these lease modifications under the subtle threat of their leases being terminated or relocation of the cell tower to another property.
Cell Tower Lease Buyout Industry
Third-party wireless real estate hedge funds and cell tower rental stream cash flow acquisition firms that swoop in with “cash now” offers to purchase your lease. They offer up-front cash lump sum payments. Don’t expect these companies to explain the nuances of selling a cell tower easement, and sadly many sellers end up leaving money on the table or not protecting their interests properly in the buyout transactions.
Cell Tower Lawyers and “Lease Consultants”
The attorneys working on behalf of the wireless industry will never get on the phone with you and are not your friend. The most attorneys who say they work for landlords also work for the wireless industry and will never take of their shoe and bang it on the table to get the attention of the person on the other side of the negotiating table on your behalf. Unfortunately, many of the “hired guns” who say they will “level the playing field” are wanting you to give them 20% or more of your future cell tower lease income just because they helped you to negotiate a lease agreement or lease amendment. Or they say they are going to act as your consultant in your lease buyout transaction but actually are hoping to buyout your lease rental payment themselves.
Understand that the goal of the wireless industry is to win, and winning means paying you less. Arm yourself to fight / negotiate on their level.
What Cell Tower Landlord’s Need to Look Out For
The Lowball Offer
They call you up, offering $600 per month for an 85 or 90-year lease. They’ll “Rick Harrison” you and say $650 is the best I can do, claiming $600 is the average for the county, etc. and they’re betting you will fold and agree under pressure.
The FOMO Rent Reduction Letter
An official looking letter with a logo arrives, citing “network optimization” or “technology upgrades” like Elon Musk’s Starlink satellites.
The Lease Amendment Trap
Mr. Landlord, Mrs. Landlord, just go ahead and “sign this quick update,” they say. “It’s just routine.” Next thing you know, you’ve agreed to a 30% to 50% rent cut.
The Lease Assignment Two-Step
A slick-talking rep offers $15,000. They convince a naïve baby-boomer cell tower landlord that they need to amend and extend a brand-new lease agreement to make it more “attractive” to other tenants, even if there is still 20 years or 25 years left on the lease. They’re banking on your good nature and ignorance.
The “Obsolete Cell Tower” Scare
“Your tower’s outdated,” they warn. “5G’s here, and we might not need it.” And Elon Musk is launching low orbit satellite cell towers so we might not need your cell tower in the future, so lower your rent or we might terminate your lease. Pure fear tactics.
Cell Tower Lease Negotiation 101:
Understanding Your Location and Lease
Before you can negotiate a cell tower lease, you’ve got to know if you have any leverage and what’s in their agreement.
Rent and Escalation Clauses
How much are they offering to pay in rent, and does it increase over time (e.g., 3% annually or 15% every 5-year term)? Is the lease between you and a carrier or you and a tower developer? Direct carrier leases can usually pay $500 to $750 more monthly than a developer lease depending on location, especially on rooftops.
Term and Renewal Options
How long’s the lease? Is it a twenty-five-year lease or is it a 90-year agreement? There’s a big difference and you don’t want to sign a lease agreement that is way too lengthy.
Termination Rights
The right to terminate is always going to be one-sided favoring the tower company. However it they terminate early you need to be compensated fairly for it and you need to get ample notice.
Subleasing and Assignment
Don’t let anyone sublease your rooftop but subleasing your ground pace at the tower is fine as long as you are getting a share of the revenue, which they never want to give up. You should be able to assign your lease to whomever you want as long as it’s not to your uncle Louie who works for the cell tower lease buyout company.
Maintenance and Upgrades
Make sure you don’t get stuck with maintaining access aka plowing the snow in the winter, and keep them on a short leash when it comes to doing upgrades on your rooftop.
Cell Tower Lease Negotiating Strategies That Work
Don’t Blink First
This is a basic rule for any negotiation. On existing sites if they threaten to leave if you don’t agree to cut rent call their bluff and watch them squirm.
Know the True Value of Your Cell Site or Cell Tower Lease
Do they want a rent reduction? Is it time to renew and expiring cell tower lease and you are not certain about the value you should be asking for or receiving? You can ask on internet forums, but the only way to be certain is by talking to an industry expert who does not work for the industry, like Tower Genius. Don’t leave this to chance.
Know When to Say Yes or No to Lease Buyout Offers
That lump-sum offer might look shiny, but if you do the math, it’s a lemon. Always talk to your CPA before selling and always talk to Tower Genius to get a second opinion.
Level the Playing Field
Don’t try to learn how to negotiate a cell tower lease. Tap into over 50 years of combined wireless industry experience and leverage the cell tower leasing knowledge of Tower Genius.
Maximize Your Tower’s Value
Structure the lease for long term success.
- Renewal terms
should be no longer than 20 or 30 years on towers, and less on rooftops. Anything longer than that needs to be traded off as a bargaining chip to achieve better terms in other parts of the lease.
- Rental Escalators
Even 2–3% annual increases compound nicely. Rental increases of 3% annual have been the standard in the industry. Don’t ever agree to anything less than 10% every 5-years. Over
- Revenue Share
Every cell tower ground lease needs to include the potential to receive revenue share on additional tenants which are in addition to your anchor tenant. It’s easier to get revenue share on a lease renewal than on a new cell tower lease. Anything less than 10% is unacceptable. Always agree to a percentage and not a flat dollar amount. As the tower grows, you grow.
- Don’t Sublet the Roof
Limit wireless carriers to their specific leased areas and don’t give away the rights to your entire rooftop to a single carrier. Some landlords will give lease buyout companies a “general easement” for their entire rooftop when doing a rooftop lease buyout on a building’s rooftop which has multiple carrier tenants.
- Don’t Agree to The Right of First Refusal or Confidentiality Provisions
Sometimes it is impossible to get a new cell tower lease agreement signed without having the right of first refusal or confidentiality sections removed. Whenever possible, remove these provisions, especially if you are renewing your cell tower lease. You will thank us.
Talk to Tower Genius
Don’t let the wireless industry take advantage of you, lowball you, reduce your rent, or steal your equity. Call Tower Genius at 888-313-9750.