top of page

Maximizing Lease Renewal Opportunities 

When it comes to lease renewals, timing is everything. For optimal offers from cell tower operators, it's crucial to initiate negotiations within the right window. Aim to negotiate within 10 years of your lease's expiration date. Waiting until there are 0-5 years remaining on your lease increases urgency, putting pressure on operators to secure long-term agreements. This period is especially favorable due to the influence of major carriers, which often results in more favorable terms for property owners. 

Unlocking Maximum Value

Leases are at their most valuable when they have 0-5 years remaining before expiration, particularly if a major carrier is involved. Skilled negotiation during this critical period can significantly enhance the future value of your assets through rent hikes and favorable terms. However, navigating these negotiations can be complex and time-consuming. That's where a proficient consultant becomes invaluable. With their expertise, you can expect to engage in lengthy negotiations with confidence, knowing that every detail is being meticulously managed to your advantage. 

Understanding the Landscape

In considering lease renewals, it's essential to factor in zoning regulations, particularly in regions where building new towers is challenging, such as the East and West coasts. Within 2 years of lease expiration in these areas, operators are compelled to negotiate, presenting a prime opportunity for property owners. However, operators may employ relocation threats during negotiations. Yet, the reluctance of tenants and the potential for network disruption make this tactic less effective. 

​

At JP Tower Consulting, we possess a comprehensive understanding and insight into operators' tactics, giving you a strategic advantage in negotiations. With our guidance, you can navigate the complexities of lease renewals with confidence, ensuring that you maximize the value of your asset while safeguarding your interests. 

​

​Ready to unlock the full potential of your lease renewal? Contact JP Tower Consulting today to schedule a consultation and discover how we can help you secure the best possible terms for your lease. Don't wait until it's too late—seize the opportunity now and maximize the value of your asset! 

Lease Renewal FAQs

  • What is my cell tower lease worth?
    The value of your lease depends on several factors. If it has over 15 years left and escalates at 3% annually, its market value is roughly 19 times the annual rent. However, lower escalations or a Right of First Refusal (ROFR) can decrease its value. For leases within 15 years of expiration, tenant composition and lease duration are critical. Closer expiration dates increase value, especially with multiple carriers. Sites with less than 5 years left are valued based on a multiple of what the perceived negotiated rent would be at final lease expiration. While a site under 2 years from expiration is based more on a multiple of tower cash flow.
  • How long will the process take to sell my tower lease?
    The timeline for closing depends on any title defects and how quickly attorney redlines are resolved. It's crucial to clear any lines, judgments, or back taxes before starting the process to sell your lease to avoid complications. If there's a mortgage, discuss an SNDA with the lender as it's often required for closing, especially if the loan amount matches or exceeds the purchase price. Properties without a ROFR are simpler to transact. Typically, closing takes 3-6 months, but unforeseen issues might extend it beyond a year, especially with ongoing negotiations between attorneys.
  • When is the best time to sell my tower lease?
    Consider selling your lease if it has less than 10 years remaining, as it's often valued differently by tower and third-party buyout companies. Another opportune moment is just before or after an escalation hit if your lease is long-term. Ensure you have a plan for the proceeds before selling.
  • Should I have an attorney review this lease buyout?
    Absolutely, I recommend getting legal advice. If you sell the property without proper consideration for the tower lease, it could complicate the sale or burden the buyer with unexpected costs like property taxes. That’s why you’d want to account for a reimbursement for property taxes so a future buyer wouldn’t be on the hook for taxes on a tower they receive no benefit from. Contract terms will always favor the tower company and hiring a telecom attorney for that piece of mind is crucial.
  • How long is the buyout for?
    Lease buyouts are often structured as perpetual or 99-year easements. If you prefer shorter terms, third-party buyout companies offer options with 50- or 60-year easements.
bottom of page