How To Negotiate a Cell Tower Lease – Part 2

How To Negotiate a Cell Tower Lease - Part 2
Speaker 1:
The Wireless Wise Guys podcast. Everything you wanted to know about cell tower leases, but were afraid to ask. Powered by Tower Genius, the USA’s premier cell tower lease experts.
Speaker 2:
All right. So I want to do part two follow-up on how to negotiate a cell tower lease.

Obviously, you want to let them know that you’re interested. If they’ve reached out to you, call them back. Don’t show that you’re too interested. It’s like walking into a car dealership. You don’t want to open up your eyes too much that you’re excited about the potential offer.

Let them know you’re interested. Call them back. Schedule a site visit. Have them walk the property. Tell them to come on out, check out the property and have them show you where they would like to put this.

The strategy is really to get them to spend money. You want them to have some skin in the game. You don’t want to be negotiating before they’ve even set foot on your property and spent some time and money on the site.

Now, if there are 10 other parcels that are identical to yours and they offer you 500 bucks, you’re probably not going to get too much more money. You could, but they have a lot of other choices there, as we’ve discussed in other videos.

Another important step is to avoid signing any term sheets. They’re going to try to lock you in a term sheet. Only serves them. It doesn’t benefit you at all. Do not sign a term sheet. Let them know, “Hey, my handshake is good enough. My word is good enough.”

Everything is negotiable on these deals until the contract is signed and finalized. So there’s no reason to sign a term sheet for them to lock you into some terms that you have no idea if they’re good or not.

You want them to come on out and if they can present you with a lease agreement or an option agreement, just tell them to use layman’s terms, “Send me a contract, send me a lease. I want to take it, look at what you’re proposing.”

A lot of times they’ll want you to sign or agree to terms, and the argument that I would use is, well, if you were going to go to a bank to get a construction loan, you’d want to see the drawings. You want to see the plans. Well, I’d like to see how tall is this tower going to be? Where are you going to put it? Where are the easements coming through the property? How are you going to access it? Are you going to use my driveway? Are you going to cut out a road up the hill? So you want to see some details. You want to see where they’re going to place the equipment. You want to see how wide their access is going to be.

And you want to see if it’s a residential property. If you’re out in the country and you have a house and are you going to be looking this at ugly cell tower from your back porch?

So those are the things that you want to ask. And you want to, obviously, get guidance because every property is different so that is basically step two.

The other thing is, as we have mentioned previously, you don’t want to negotiate first. You don’t want to blink and offer a price right off the bat. Let them make you an offer.

One of the knuckleheads out on the internet, a cell tower consulting company, I’m not going to mention their name, but I know they advertise, “Hey, we’ve increased rent average of 310%,” or whatever that number is. That’s actually deceptive. If you look at from initial offers, I seriously doubt it’s on a new cell tower. Possibly on a existing cell site, if they’re renegotiating something, but the percentage doesn’t impress me.

Because we’ve actually, I got my calculator out before I did this video, here at Tower Genius so we had an example of increasing the rent on a cell tower for a landlord by 960,000%, okay? So we don’t throw percentages around in our marketing propaganda. We had another one, I’ll give you another example where we increased the rent by over 30,000%. Yeah. So it’s doable.

So when you see a consultant throwing around numbers, “We’ve increased the average of this and that,” it’s like an airplane. You need to have a balance. You need to have the business terms and you need to have the actual lease terms in there. It’s like an airplane. If one wing is unbalanced, it’s not going to fly well.

So you need to have, yeah, great rent, great business terms and you need to have the lease structured properly. Without a properly structured lease it’s not a good agreement, and it’s going to be a problem when you encumber that long-term on your property. Speaker 1:
You’ve been listening to the Wireless Wise Guys podcast.

I was recruited out of Enterprise Rent a Car in 2000 by Kevin Donohue, who is my business partner today, to be a real estate site acquisition manager in the NYC Metropolitan Area for his company that was contracting for Verizon Wireless, T-Mobile and Sprint. In 2008 I founded a consulting firm know today as Tower Genius, LLC where Kevin and I have helped many thousands of people and existing cell tower landlords get the help and information they need to succeed at the cell tower negotiating table.

Carriers & Tower Companies Have Their Hired Guns. Shouldn't You?

Negotiating a cell tower lease, trying to figure out what the correct cell tower rent value for your property needs to be, or evaluating the broad range of proposals and offers received by most cell site landlords in 2022 can be very confusing. Connect with Tower Genius or submit your info below, and we'll evaluate your situation, answer your questions and even make a few recommendations you may benefit from.

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