Market Rent Myth - Lease Renegotiations

If you're a property owner with 5 years left on your lease and the cell tower operator contacts you for an extension or buyout, it's important to weigh your options. However, you quickly pivot to no buyout as you want to keep the monthly lease payments for a myriad of reasons. While considering fair market value, you discover a neighboring property owner receives $1,000 per month compared to your $750. Proximity to lease expiration significantly impacts negotiation leverage which is why you never want to pigeonhole yourself into a market rent.

Legacy sites, those collocated or installed pre-2005 without Master Lease Agreements, often face substantial rent increases due to frequent amendments. Recognizing your tower's history is crucial. Understanding tenant composition is equally vital, especially within 5 years of lease expiration. Cell tower operators have secured 85% of tenant revenue for 20 years or more, making towers with impending expiration strategically advantageous.  Many of these property owners who have already extended their ground leases, did so at very attractive financials for the cell tower operators. 

Market rent discussions, prevalent online, may not align with your lease's true value. Accepting generic market rates, like $750 in rural Iowa, might mean leaving money on the table. Don't settle based on market averages; proximity to lease expiration and tenant count matter. Hiring an expert with market insight is crucial. Experience alone doesn't guarantee understanding lease value. In renegotiations, honest consultants acknowledge that as expiration nears, cell tower operators often offer higher payments.

Choose someone who provides straightforward advice tailored to your lease specifics. Waiting for a better position closer to expiration can maximize your monthly rent. Trust an expert who prioritizes your best interests.