Cell Tower Lease Area Expansions
Today, wireless carriers and cell tower companies are approaching many landowners about granting additional ground space or lease area beyond what was originally negotiated in the cell site agreement. There are a number of reasons why the carriers or tower companies are looking to expand. For one, when the cell site was originally designed, the lessee may have assumed that the lease area only needed to accommodate their current and future equipment. Since that time, co-location between carriers on each other's towers is completely acceptable and becoming more common. So while the lease agreement may allow for subleasing, the lease area ground space simply is not large enough to allow for subleasing.
Because of the recent cell phone carrier mergers, such as Sprint/Nextel or AT&T/Cingular, the carrier might be attempting to consolidate their equipment into one site. This helps reduce operating costs by lowering the lease rate for duplicative sites. Sometimes, this requires expansion beyond the current lease area to accommodate the additional equipment. In other cases, the wireless carrier intends to add another service to its network. For instance, Verizon and AT&T both are attempting to add LTE (Long Term Evolution) antennas and equipment to their sites. This additional service often requires additional cabinets and/or additional antennas.
Some tower companies are attempting to "purchase" additional ground space when they try to extend the lease area or purchase the remainder of the lease via a cell site lease buyout. By tying the additional lease area to the lump sum purchase offer for the cell site lease, the carriers can often get the landowner to give up additional space before having the opportunity to discover the value of additional revenue they might otherwise receive for expansion.
As the landowner, you should ask yourself a number of questions before granting additional lease area, including the following:
- What's the purpose of the additional lease area?
- How much extra lease area is being requested?
- How much lease area is actually needed for the proposed use?
- What will be the impact to me from the use of the additional lease area?
- What are other landowners receiving for expansion of their lease areas?
- Does the expansion provide me an opportunity to renegotiate a poor lease?
Steel in the Air experts can help you answer all these questions and more.
Don't leave money on the table when you negotiate the expansion. But you must also be careful not to ask for more than is reasonable for the lease area expansion because by doing so, you may cause the carrier to explore other locations or simply choose to not upgrade the particular site. Determining the appropriate rent for an expansion is not an easy task, but the experts at Steel in the Air have the advantage of having assisted hundreds of other landowners with similar evaluations.
Remember too, you DO NOT need to agree to an extension of the lease term in order to receive compensation for the lease area expansion.
If a wireless carrier or cell tower company has contacted you about expanding the lease area, contact us today. We will be happy to discuss the offer and indicate whether we can help with your negotiations.
Legal Assistance Also Available
Depending on your situation, it maybe beneficial to use the services of our related law firm, Cell Tower Attorney, to assist you in negotiating favorable terms and conditions to the proposed agreement for expansion of the premises or extension of the existing lease.
You can reach CTA at 877-925-3778.