Lease Renewal
What We Provide
Cell Tower Lease Renewal
To maximize lease renewal value, begin negotiations within 10 years of expiration, as the urgency increases in the final 0-5 years, often leading to more favorable terms from major carriers.
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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.
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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!
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FAQs About our Cell Tower Lease Renewal Consulting Service
Cell tower leases nearing their expiration are highly sought-after by tower companies, especially those with major tenants like AT&T, Verizon, or T-Mobile, which often result in rent increases. Towers with multiple major tenants significantly increase in value due to higher revenue for the tower company. Usually, towers with less than 10 years left start receiving rent increase offers. If you're not getting such offers but have multiple carriers, it might be beneficial to wait a bit longer.
Typically, you don’t ever want to agree to a Right of First Refusal (ROFR). The tower companies will say they don’t want competitors poaching their assets and that’s why they have it in the contract, but it doesn’tbenefit you to include it. It will only be more of a problem when you look to sell the lease or property in the future. Only agree if you are getting a financial offer you can’t refuse. Beware there isn’t any consent language in the ROFR agreement that allows the tower company to consent to any buyout transaction. That will further put you in a tough spot if you want to sell the lease. You also don’t want to allow any non-compete provision in the lease. This removes the opportunity for another company to put a tower on your property. The tower companies want to protect themselves from other companies building a tower on your property to poach a tenant that’s paying the tower company a high tenant rent. This won’t stop a tower company or developer from going to an adjacent property owner’s land. Typically, I’d avoid any Confidentiality clauses as well as people who have cell towers talk to others who have cell towers. It’s very unlikely that the tower company will enforce that part of the contract, but you never know. If you have Consent in your underlying contract and the tower company is removing it, make sure they don’t remove it. That’s extremely valuable to have in your contract as it typically requires them to reach out to you on any work being done at the tower. Make sure some version of Property Tax Reimbursement is listed and that you have more than enough time to seek reimbursement. Municipalities are starting to tax these towers at higher rates across the country and you want to make sure you’re covered in case of any increases.
The tower company knows it will be cheaper now to extend your lease rather than when it’s 10 years from final expiration. Tower companies often offer smaller one-time payments initially, but it's best to resist accepting these offers right away. Property owners should avoid jumping at the first cash offer as better deals typically emerge over time. If it aligns with your goals, it's prudent to stay patient and wait for improved offers.
Absolutely, you should consider it. Many older ground leases lack the comprehensive language found in current agreements. Tower companies often include additional terms during lease renewals. Given their ongoing revisions, investing in a telecom attorney to review your lease is crucial. This ensures your rights are protected and is a wise expenditure for your future tower lease.
Tower companies usually seek lease renewals spanning 40-100 years. It's best to aim for 20-25 years, allowing flexibility to benefit from future technological advancements that could
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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