| Cell Tower Lease Expirations and Extensions
To begin with, Steel in the Air, Inc. is not affiliated in any way, shape or form with Crown Castle. If you are interested in visiting their website, please go to www.CrownCastle.com. Crown Castle and Crown Atlantic are registered trademarks owned by Crown Castle international.
Steel in the Air, Inc. has assisted many landowners with negotiations on the expirations of their cell tower lease. Crown has been actively attempting to extend their cell tower ground leases with landowners often offering a small, nominal increase for the lease extension. In other cases, they offer a lump sum purchase price for an easement or attempt to directly buy the land underneath the cell tower. There are a number of reasons for this.
First, the stock market looks closely (and negatively) at the number of cell tower ground leases that they have that are due to expire in the next 5 years. That is because without the cell tower ground lease, they stand to lose the revenue generated by the tower.
Secondly, the cell tower lease extensions are essentially a one way commitment by the landowner who receives no guarantee that Crown will continue the lease but now has an obligation to lease his/her property for 20 to 50 more years. Since there is no commitment on the their behalf, why wouldn't the tower company try to convince you to extend the lease? The answer is they will try to get as many years as possible but provide you little, if any, guarantee on their end. Many leases grant them the right to terminate with as little as 30 days. A 50 year commitment versus a 30 day commitment…Who is favored in that scenario?
Third, Crown Castle bought two thousand towers from
Bell Atlantic, GTE, and Airtouch (now Verizon) and formed
a joint venture with the previous companies that now
make up Verizon called Crown Atlantic. Many of these
cell towers were built in the 1980s, and the cell tower
leases are now coming up for expiration. The landowners
are being contacted by company representatives to negotiate
extensions to the lease or sell the lease out directly.
Fourth, Crown Castle has been offering to purchase
the lease or extend the lease along with asking for
an expansion
of the current lease area. By asking for the expansion
along with the offer to extend or buyout the lease,
Crown hopes the landowner will not question whether
the expansion has value in and of itself.
All of these are good reasons why they would extend the lease but not necessarily good reasons why you should. That is where we come in. We have provided other owners good advice and negotiated numerous lease extensions on behalf of landowners. We can provide a detailed revenue projection of what they are actually making in profit on the tower as well as what expenses they have. We can help you evaluate what they can afford to pay for their lease. Or, if you want to cash out, we can help you maximize the lump sum purchase price.
You should be aware that there are other companies that might pay more for your lease or offer a better lease rate for the tower. We can help you solicit offers for an extension of your lease when the original lease is over. Please note that we are not encouraging you to do anything to breach the lease rights that Crown currently has but to make sure you consider what the impact of the extension will be over time. Please take a look at our Increase in Lease chart to see what the difference of receiving just $100 in increased lease payments means over 25 years.
We can also provide comparable data on what other landowners have successfully renegotiated their leases for. We can analyze the risk there would be that Crown chooses to rebuild the tower elsewhere because you don't agree to their offer. Most importantly, we can tell you which negotiation strategies work and which don't. If your cell tower lease is set to expire, call us to discuss how we can help you increase your Crown Castle lease. We can make sure you get the best lease rate possible.
If your lease is not set to expire and you are evaluating an offer to extend the lease, ask yourself what you get out the extension. If you have received an offer to buy your lease out, then contact us before you come to an agreement with Crown Castle. There are other less onerous offers available you should consider that we would be happy to assist you in procuring.
[Steel in the Air]
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