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Comparing Cell Tower Lease Agreements Isn’t Always Like Comparing Apples to Apples.
*UPDATED: 05/21/2024
You’ve been handed a cell tower lease agreement. What you do next will determine how your cell site lease agreement will be structured and will benefit you, or frustrate you for the next 20 to 30 years. Not all cell phone tower lease agreements are the same and they consist of several different variations, that is, they usually aren’t apples-to-apples comparisons. It’s never a good idea for a property owner to base your entire cell tower leasing strategy off of somebody’s uncle’s cousin’s cell tower lease agreement, who had a cell phone tower placed on their land ten or twenty years ago.
Cell Tower Lease Agreement Specialists.
Did they consult with anyone competent and did they get a wireless goldmine? Or did they get the shaft? Chances are that they didn’t get the help or advice that they would have needed to wind up with a fair tower lease contract.
Unless a wireless carrier or cell tower developer purchases the dirt underneath the proposed cell phone tower (a practice more common outside of the United States), before they can put ip steel in the air, the site must be acquired and secured. This is why most cell towers are secured with a land lease agreement.
We Know Cell Tower Lease Agreements!
Both Partners of Tower Genius are former real estate site acquisition project managers who acquired and developed sites for Verizon Wireless, T-Mobile, American Tower and Sprint PCS over two decades ago. Kevin Donohue oversaw the acquisition and development of over 10,000 new cell tower locations and rooftop cell sites and their lease agreements as an employee of Bell Atlantic NYNEX Mobile (today’s Verizon Wireless) in the Northeastern USA.
We Know Cell Tower Lease Agreements.
A million-dollar cell tower development project (including up-front soft costs, tower construction costs & carrier equipment) will never see the light of day without first having a long-term lease agreement, including an easement secured and recorded on the deed of the land parcel it is to sit on. Before you can effectively negotiate a cell site lease agreement, you need to know what type of contract you were presented with. Here’s the kind of newly proposed cell site lease agreements typically offered to land owners:
Different Types of Cell Tower Lease Agreements
Tower Developer (Crown Castle, American Tower, SBA Communications , Vertical Bridge) / Tower Lease, OR Cell Tower Option and Lease Agreement
Carrier / Communications Site Lease OR Option and Lease (Rooftop Site Lease, Billboard Pole Lease, Water Tower Cell Site Lease, Transmission Tower Cell Site Lease, Smokestack Cell Site Lease)
Carrier (T-Mobile, AT&T, Verizon Wireless, DISH, US Cellular) / Ground Lease OR Option and Lease
Carrier (Verizon, AT&T, T-Mobile, DISH) / Rooftop Lease Or Option and Lease
Carrier (DISH, AT&T, Verizon Wireless, T-Mobile) / Water Tower Lease
Carrier (AT&T, DISH, T-Mobile, Verizon) / Transmission Tower Lease
Carrier / Small Cell Lease (Master Lease)
Individual Rooftop Small Cell Lease or Option and Lease
How about all “them apples”?! What type of cellular tower lease agreement were you offered? About 90% of the people that we speak with on a daily basis have NO IDEA about what type of cell phone tower lease agreement they have been offered. If you don’t know the symptoms, and you are uncertain of what the proper diagnosis of the patient is, you definitely aren’t ready for the procedure. It is a very common mistake made by people when they start to blindly negotiate a cell tower lease when they have no idea what kind of contact they were offered.
Is your cell tower lease agreement an apple or is it an orange cellular tower lease agreement that looks a bit like an apple?
The cell tower property acquisition people know that you probably have very little “cell tower leasing knowledge” so the deck is stacked against you from Day One. Do you have questions? Here are the top FAQs about cell tower lease agreements we get from people visiting our site.
Are You Going Into Cell Lease Negotiations Loaded For Bear, Or Are You Carrying A Water Pistol?
You need to go in “loaded for bear” BEFORE you start to negotiate your cell tower lease agreement. Information is power. Don’t allow yourself to get drawn into discussing lease rates or business terms. If you are contacted, a simple “Yes I’m interested… where do you want to put the cell tower…” is probably enough. When they bait you to provide them with a rent amount, just let them know you will think about it. Then contact Tower Genius so we can evaluate your offer and provide you with practical strategies to improve the chances of your site being selected, maximizing the value of your cell site lease agreement, and making sure that you are not getting taken advantage of by Big Wireless.
CELL TOWER LEASE AGREEMENTS WILL EITHER BE DIRECT CARRIER LEASES OR THEY WILL BE TOWER DEVELOPER LEASES
Wireless Carrier Lease will be a direct lease agreement between you the Owner, Landlord, or Lessor, and the Carrier, Tenant or Lessee — namely Verizon Wireless, T-Mobile, AT&T, US Cellular, or DISH Wireless. It can be for a Cell Tower Lease Agreement, Ground Lease Agreement, Rooftop Cell Site Lease Agreement, Water Tower Lease Agreement, Utility Transmission Tower Lease Agreement, or other direct carrier contract. There is nobody between you and the carrier, so you will typically be able to secure a better rental price and better terms. And as always, don’t expect them to offer up any suggestions of how this can be accomplished.
Cell Tower Developer Lease will be a direct lease agreement between you the Owner, Landlord or Lessor, and the Cell Tower Owner or Tower Developer, Tenant or Lessee — namely American Tower Corporation, Crown Castle International, SBA Communications, Vertical Bridge or other Cell Tower Companies. The tower company has placed itself between you and their subtenant, the carrier (Verizon, AT&T, T-Mobile, US Cellular, DISH Wireless). Their carriers’ subtenants will typically pay the Tower Owner about $2,000 per month, escalating at 3% annually to lease the tower and ground space inside the Leased Premises (footprint).
The anchor tenant or subtenant helps the developer recoup their development costs over a 7-year depreciation cycle in most cases and you get paid out of what’s left over. This is why you will rarely see a cell tower developer pay a property owner “$2,000 per month” because it’s very close to what they are generating on the tower with one subtenant. Cell tower developers really need two subtenants leasing space on the tower to make a decent return on their investment. This is why it is very important for Landlords to negotiation revenue sharing as part of their cell tower lease agreements.
Communications Site Option & Lease agreements have an “Option Period” where the wireless carrier or tower developer ties up your property for 1 to 3 years for a nominal annual fee ($500 is usually offered) and they use that time to get their due diligence, zoning and permitting completed. The Option and Lease Agreement looks just like a normal Wireless Telecommunications Lease Agreement, but it contains option language that they can exercise by sending you a letter that they are “exercising their option” which ** POOF ** just like magic, turns the Option into a Lease. So you need to pay VERY close attention to the Option. They can also let the Option period expire and not move forward.
A cell tower developer has zero incentive to propose a rooftop cell site lease agreement because your rooftop is the tower. This is why owners of residential apartments, condominiums, and commercial buildings should not sign rooftop leases or management contracts with cell tower management companies. You are the cell tower. Why give away your leverage to a direct competitor?
NEED CELL TOWER LEASE AGREEMENT ASSISTANCE?
Verizon Wireless cell site lease agreements
AT&T cell site lease agreements
T-Mobile cell site lease agreements
U.S. Cellular lease agreements
DISH Wireless cell site lease agreements
American Tower lease agreements
Crown Castle lease agreements
SBA Communications lease agreements
Vertical Bridge lease agreements
Need to get cell tower lease assistance?
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Call 1-888-313-9750.
Steve talks about how cell tower rent values are calculated.
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“LEASE VALUE CALCULATOR FORMULA = What they want you to know ÷ WHAT WE KNOW”