Cell Tower Lease FAQsBy Steven KazellaQ: Who are the carriers who could likely present me with a cell tower lease to be negotiated at myproperty?A: Generally the wireless carrier will not present you directly with a cell tower lease. One of theirwireless site acquisition or real estate managers will usually contact you first to gauge your interestlevel. You want to make sure before entering into a cell tower lease agreement with any of the wirelesscarriers doing business (ATT, Sprint-Nextel, US Cellular, Metro PCS, ClearWire, Verizon Wireless, Alltel, T-Mobile) or sign a contract with any of the large tower development or rooftop management companies(AAT, Crown, American Tower, SBA) that conduct your due diligence, but dont wait too long.Also if youre lucky enough to be contacted by any of these firms, make sure that your you or yourlawyer dont negotiate yourselves out of a cell tower lease. Often times attorneys start marking up alease agreement just to get billable hours. If carriers have to waste a lot of time going back and forththey will move onto another site thats willing to do business, and then you will wind up looking at thesite instead of collecting rent from it.Q: What should I look for in my cell phone tower lease?A: A properly executed cell tower lease should protect your ground space rights, rooftop space rightsand address subleasing / subletting issues that many cell site owners often time miss. It will also includetax language to protect you from assessments. Also, it is crucial to properly develop the site (height oftower and available ground space) to allow for expansion and collocation which will increase revenueson the cell tower. All cell tower lease exhibit drawings should be completed by a state licensedarchitectural engineering firm. I could write a list of a dozen things that seasoned real estate attorneysmiss regularly on cell tower leases, but then wheres the fun in that?Q: I dont know anything about zoning or construction project management, should I even bother withgetting a cellular site built on my buildings rooftop?A: The carriers will not select your site if it is not feasible for development from a number of aspects,mainly zoning, and land use perspective. Only enter into a cell tower lease that puts the burden andexpense of obtaining permits and approvals on the carrier or tower company, not on you theOwner/Landlord.
Q: What if cell towers become obsolete? What happens then?A: Carriers are heavily invested into the development of the wireless network. Over 70% of the U.S.population uses cell phones. So if you hear rumors about a balloon or blimp or satellite being used forcellular technology dont be fooled, cell towers are here to stay. We didnt stop using Sony Walkmanseither, they just call them iPods now, but people will always want to have personal music players, andthe same holds true for personal communication devices.Q: How long will my cell tower lease be good for?A: When you sign a cell tower lease the lease term will be initially for 5 years with two renewal terms inmost cases, and an additional ten year term after that. Since no one has a 35-year cellular tower lease asof yet, we cant say how long they can be extended for, but assume that your cell site leases will beextended for as long as you own the site and people need to speak to each other on wireless devices.Q: How much can you get for your cell tower lease?A: Isnt this always the big question... And our answer is that it depends how badly they need your siteand where you are located. The closer to the heart of a major metro area, the greater the demand forwireless coverage and capacity will be, and the more you can get. Rooftop sites vary from ground leases.For example in Columbus, Ohio you might get $1,100 per month each for three carriers on your rooftoptotaling $3,300 per month. While if you had a cell tower on your property in the same city you might get$1,200 for the first carrier who built the tower, and to additional carriers pay rent to the first carrier toco-locate on their pole, and then each pay you $900 for ground space rights, or a total of $3,000 permonth.Q: Shouldnt My Attorney Be Able To Guide Us?A: A cell tower lease is a very intricate and specialized contract that is weighted heavily in favor of thecellular carrier. But think about it, it needs to be. Getting a cell tower built on your property is likehaving Donald Trump saying, "Id like to have a small portion of your ground space, and Im going tobuild a structure on your property that costs hundreds of thousands of dollars at MY expense, and it canpotentially bring you $1-2 Million in rental income over a 25-30 year period if we can develop itproperly. But Im only going to do this if the contract protects my investment. And if you dont like it, nohard feelings, the guy next door has 2,000 square feet of space and could use the retirement money."
Now nothing against Mr. Trump, because he is an icon of success, but if you were going to sign a dealwith him would you use an average attorney or get a top-gun attorney? And thats where we run into ashortage of talent in the marketplace. Those who can afford it hire a specialized cell tower leaseattorney, those who cant cross their fingers and hope that they are getting a good deal.Thats why cell tower development and leasing on your own is a challenge and why property ownerswho can find a partner to work with are well served in both the short and long term.Q: How can I get a cell tower lease signed for a tower on my property or antennas placed on our roof?A: Having an uncle working in the real estate department at one of the carriers is your best bet. If thatsnot an option, submitting your site to the carriers directly gives you roughly a 1 in 1,000 to 1 in 10,000chance for site selection.Heres our insider secret to getting a cellular carrier interested in your site, revealed for the first timeanywhere. First, pray to the gods of Radio Frequency. Then print up a dozen or so 18 inch x 24 inch"bandit signs" on your property that say in bold letters "I Want a Cell Tower On My Property." Yourneighbors will probably steal them, but keep them posted on your property in a visible area. If a siteacquisition consultant happens to be driving that way, you should get a call.Last Question... (Extra Credit)Q: Whats the difference in signing a cell tower lease at $2,000 monthly with 2% yearly increases vs. thesame monthly rental amount at 3% early increases over a 25-year cell tower leasing term?A: The difference is $132,000 over 25 years. WOW!! Are you happy or are you kicking yourself?If you are a landlord or a property owner and have been approached by a cellular carrier or celltower developer about putting a cell site on your property, here is the information you need toknow about Cell tower lease agreements