| Cell
Tower Lease Expansions
Many landowners are being approached by the wireless
carriers or the tower companies to grant additional
ground space or equipment area space beyond what was
allowed in the original cell site lease agreement. There
are a number of reasons why the carriers or tower companies
are looking to expand.
- When the cell site was originally designed, the
original lessee may have assumed that the lease area
only needed to accomodate their current and future
equipment. Since that time, collocation between carriers
on each other's towers is completely acceptable. So
while the lease agreement may allow for subleasing,
the ground space is simply not large enough to allow
for subleasing.
- Because of mergers, (like the Sprint/Nextel
merger or the AT&T/Cingular
merger) the carrier may wish to consolidate their
equipment all at one site. By doing so, they reduce
their costs for operating a cellular network by reducing
the lease rate for duplicative sites. Sometimes this
requires expansion beyond the current lease area to
accomodate the additional equipment.
- In other cases, the wireless carrier intends to
add another service to their network. For instance,
Sprint Nextel is starting to deploy WiMAX services
under the brand name
Xohm. This additional service may require additional
cabinets and/or additional antennas.
- Some tower companies are attempting to "purchase"
additional ground space when they try to extend the
lease or purchase the remainder of the lease via a
cell site
lease buyout. By tying the additional space to
the lump sum purchase offer for the cell site lease,
they can often get the landowner to give away additional
space before the landowner understands the value of
the additional revenue they would have otherwise received
for the expansion.
There should be a number of questions that a landowner
approached to grant additional space should be asking:
What is the purpose of the additional space?
How much space is being requested?
How much space is actually needed for the proposed
use?
What will the impact to the landower be from the use
of the additional space?
What are other landowner's getting for expansion of
lease area?
Does the expansion provide me an opportunity to renegotiate
an otherwise poor lease?
These questions are all questions that we can help
you answer. Don't leave money on the table when you
negotiate for the expansion. Don't ask for far more
than is reasonable for the expapnsion. By doing so,
you may end up with the carrier going to another location.
Make sure that you aren't giving up more than necessary
and if you are, make sure that you are getting fair
market value for the expansion of your lease. It is
also important to recognize that you DON'T need to agree
to an extension of the lease term to get compensation
for the expansion.
If you have been approached by a wireless carrier or
tower company to expand your lease area, please don't
hesitate to contact Steel in the
Air. We will be happy to discuss your situation
and indicate whether we can help you with your negotiation.
[Steel in the
Air]
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