The Fine Art of Negotiation
An Expiring Cell Site Lease
Why these negotiations are much more complex ...
There are a number of cell site leases that originated in the 1980s and early 1990s that are starting to reach the end of their negotiated terms. Owners are starting to receive inquiries from the current tenants asking to either buy out the lease in the form of an easement or to extend the lease for a nominal increase in fees.
What makes these negotiations much more difficult than normal lease negotiations is that there are many factors that contribute to how much more (or less) of a lease rate can be negotiated.
In some cases, the lease has been undervalued for years, and the expiration presents an excellent opportunity to renegotiate a better and more profitable lease. Situations where there are many tenants on the tower are likely to be excellent opportunities to renegotiate.
In other cases, the lease was originally signed on the basis of higher expected revenues, and the tenant is currently upside down on the lease payments, i.e., the tower is not profitable for them and the landowner stands a good chance of killing the lease if they fail to extend at reasonable (lower) rates.
There are numerous factors that contribute to these decisions most of which the average landowner does not even know about, yet alone understand. Fortunately, we have negotiated lease extensions with all the major carriers and the major tower companies. We know how to evaluate a site and to ascertain the difficulty and the expense in building a new site to replace it.
We can also project the current income on the tower and what the likely expenses are so that you have a good idea of how hard you can push. Our goal is to assist you in getting as much for your expiring cell site lease as possible-- the operative word being "get". We won't put you in a situation where the lease may be terminated.
And that's where the fine art of negotiating comes in; we know how hard to push before the tower company decides to move the tower. Without the basic information of what the relative value of the expiring cell site is to the carrier or tower company, you are not negotiating, you are just blindly stabbing for the correct lease amount.
Steel in the Air has assisted many clients with lease expirations. Our services can be retained on a contingency basis in many cases or under our normal hourly consulting rates. Contact us for more information.
For more details on our process for evaluating expiring lease rates, please see our Lease Expiration Review page.