Crown Castle Lease Extensions
Crown Castle Lease Extensions
Steel in the Air has been serving public and private property owners, local governments and public entities with negotiations against cell tower companies and wireless carriers since 2004. We’ve created this website to be a valuable public resource. If you still have questions about lease extensions or Crown Castle, please contact us.
Crown Castle is the second largest cell tower company in the United States with approximately 40,000 towers most of which have ground leases. If you have a Crown Castle lease agreement, chances are Crown Castle (or one of their representatives) has reached out to request a lease extension. Oftentimes, they will reach out to ask for a lease extension far in advance of the actual expiration date. Why?
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WHY DOES CROWN CASTLE WANT TO EXTEND ITS CELL TOWER LEASES?
There are several reasons that Crown Castle wants to extend its cell phone tower leases.
First, to lock down future revenue. When evaluating a company’s value, the stock market looks closely (and negatively) at the number of cell tower leases that are due to expire in the next 5 years. Why? Because the leases are a prerequisite for the company’s revenue flow.
Because they are free to terminate the lease at any time. Cell tower lease extensions are essentially a one-way commitment by the landowner who receives no guarantee that Crown will continue the lease, yet still has an obligation to provide Crown with the option for 20 to 50 more years. Since there is no commitment on their behalf, why wouldn’t the tower company try to convince you to extend the lease? Many leases grant them the right to terminate with as little as 30 days.
Many older leases are up for renewal. 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. In September 2012, they bought 7,000 towers from T-Mobile for $2.4 billion, using the cash to further enhance their wireless infrastructure, including LTE deployment. On October 20, 2013, Crown Castle bought 9,700 towers from AT&T for $4.85 billion. Many of these cell towers were built in the 1980s, and the cell tower leases are now coming up for expiration.
Because they want something else for free. Crown Castle has been offering to extend the lease along with asking for an expansion of the current lease area. By asking for an expansion along with the offer to extend or buy out the lease, Crown Castle hopes the landowner will not question whether the expansion has value in and of itself.
All of these are good reasons for Crown Castle to extend, but not necessarily good reasons why you should.
HOW STEEL IN THE AIR HELPS WITH CROWN CASTLE CELL PHONE TOWER LEASE EXTENSION REQUESTS
That’s where we come in. Steel in the Air exclusively helps landowners – we don’t represent Crown Castle. We help landowners understand the true value of their ground lease and we provided actionable guidance on your Crown Castle lease extension request. Few landowners know what their leverage is in the negotiation with Crown Castle, and fewer know how hard they can push before Crown Castle builds a tower nearby and terminates your lease.
We can provide a detailed revenue projection of what Crown Castle generates in terms of revenue and what their expenses are. We can help you evaluate what they can afford to pay for their lease.
We evaluate the zoning regulations in your area (or the lack thereof) and determine how difficult and costly it would be for Crown Castle to move the tower. In some situations, they would never get approval from the county or city to move the tower. In others, they could move quite easily, but it would be expensive. We can analyze the risk there would be that Crown chooses to rebuild the tower elsewhere because you don’t agree to their offer.
We can also provide comparable data on what other landowners have successfully renegotiated their leases for. This isn’t the same comparable data that Crown’s agents will attempt to utilize. Their agents will draw upon a list of what other Crown owners are getting within a 5-, 10-, or 20-mile radius; whichever distance yields the most favorable (meaning lower) average rent. The Crown agent will attempt to suggest that your offer is at market value or that you are already getting a better rate than the market average. Be aware that Crown only shares this data when it is favorable to them. If the rates nearby are significantly higher, you won’t ever know. Our comparable data is based upon what other landowners received in their Crown Castle lease extension.
Most importantly, we can tell you which negotiation strategies work and which don’t. If your cell tower lease is set to expire or you have been contacted by a Crown representative to extend your lease, 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 – one that you are comfortable living with for the next 25 years.
FREQUENT QUESTIONS ABOUT CROWN CASTLE LEASE EXTENSION REQUESTS
Here are some of the most common questions we get about Crown Castle lease extension requests.
Because they prefer not to wait until the last minute where they don’t have other options and the landowner’s power in the negotiation is the strongest. They also hope that by waving a signing bonus or a slight increase in rent, that the landowner will agree to extend the lease without researching how much it is worth.
Crown offers large signing bonuses because they want to distract you from considering how much the lease is really worth. 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. When you compare the signing bonus against what you could have received in future lease payments during the extension, the signing bonus looks paltry.
It’s unlikely in most situations. The cost to relocate a tower is high and in areas with zoning regulations on towers, it may be impossible. There are situations we are aware of where Crown Castle has moved a tower if the landowner won’t extend the lease or is asking for too much money. Fortunately, none of our clients have ever had Crown Castle move a tower off their property (unless they wanted it to be moved).
If your Crown Castle lease is set to expire, please see our page on Negotiating Expiring Leases that includes a detailed explanation of our process on how we evaluate leases that are near their expiration.
Disclaimer, 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.