Compound Expansion
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Compound Expansions
Compound expansions can be complex, especially when multiple tenants are involved. At JP Tower Consulting, we help property owners navigate these expansions to ensure tenant needs are met, revenue potential is maximized, and no unintentional benefits are granted to additional tenants.
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Identifying Tenant Needs for Compound Expansions
When a tower company requests a compound expansion, the first step is to identify which tenant requires the additional space. Carefully review the drawings to allocate only the necessary space for their installation. Avoid providing extra space, as it could be utilized by another tenant, effectively allowing a free collocation within the expansion. This approach ensures that each tenant gets only what they need and prevents unintentional benefits to others.
Ensuring Compliance During the Contract Phase
During the contract phase, it is crucial to ensure that no renewal terms or legal provisions are added beyond what is specified in the underlying lease. Tower companies often attempt to include additional terms at no extra cost to secure their interests and avoid future negotiations. By closely monitoring and adhering to the original lease terms, you can prevent any unwarranted advantages being granted to the tower companies.
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Maximizing Revenue Opportunities with Additional Ground Space
ower companies may seek additional ground space for small one-time payments to accommodate future tenants, especially at sites with tight compounds. When a compound reaches its capacity, opportunities for future revenue growth become limited. Securing extra space allows tower companies to market the site without the need for further negotiations with property owners if a new tenant arrives. Although this strategy carries some risk, a single colocation can easily offset the cost multiple times. In these situations, contact JP Tower Consulting to assist with the negotiations and ensure a favorable outcome.
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FAQs About our Compound Expansion Consulting Service
This letter can indicate two things: an immediate need for additional space for a new tenant or a future option for additional space. If space is needed now, you are entitled to more monthly revenue. It's important to identify the tenant, as a higher-quality tenant can yield better negotiation outcomes. In the case of a future option, the tower company may want 500 square feet reserved for potential expansion. Here, you might need to relinquish some rights for a small signing bonus. Property owners targeted in these scenarios usually have long-term leases of over 15 years left on their lease agreement with the tower company.
In 97% of cases, the extra ground space is for major tenants like T-Mobile, Verizon, or AT&T. If the tower company contacts you directly, you could potentially negotiate for at least $500-$1,000 per month, depending on the tower's location. Difficult zoning areas may justify asking for more. Remember, you have leverage because the tower company wants this additional revenue. Without the extra space, they earn nothing from the prospective tenant. If the tower company isn’t offering a fair deal, you can negotiate directly with the carrier, though carriers prefer you work with the tower company to avoid paying rent to both parties.
Ideally, you shouldn’t provide more than 500 square feet, which is usually sufficient for any major carrier. If the tower company requests more, be cautious—they may need space for two customers. Request drawings that show the exact footprint needed, and only give what is necessary. This way, you can benefit from another compound expansion if another carrier shows interest in the future.
It depends on how long the agreement is and if the tower company is trying to slip other provisions in the amendment. Typically, it’s short unless the tower company is trying to introduce other changes to your lease. If the language seems complex, consider having a telecom attorney review it for peace of mind. You might also request a signing bonus to cover these attorney fees.
The need for extra space could end if the tenant leaves the tower. Ideally, a national carrier like AT&T, Verizon, or T-Mobile will need the space, as they are unlikely to leave, especially under a new, affordably priced lease with the tower company. The tower company should provide you with some sort of redacted termination if that’s the case.
increase tower value. This also enables your heirs to negotiate effectively. Standard rent escalation with predictable terms is favored by tower companies for its security and stability.
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