subject: The Necessary Flexibility Of Lease Renegotiations [print this page] If you are a landowner who has been approached about lease renegotiations for your cell phone tower site lease, it is important that you remember that flexibility of terms is all part of the benefit for both parties involved, the operator and the land owner. The growing capabilities and demands of mobile devices combined with millions of users change how operators need to provide reliable service, which is precisely why as a land owner, you need to understand the need for flexibility in some terms that are in your lease contract.
Operators have to constantly invest in new technology as it comes along in order to stay competitive and provide the best service to their customers that rely on the equipment to have dependable service. As that technology changes, so too does the need for many types of cellular towers. Even though there are more and more cellular customers in recent years, they are paying less for their service it simply is not as expensive as it used to be for service. Operators can not control the cost of keeping up with new technology, and they also can not control the decreasing cost of service plans, so they have to find other ways to control their expenses. One of the biggest expenses for these companies is cellular tower site rent.
Operators that are building new cell sites are putting rent structures into place that are much more flexible than before, and sometimes their lease rate for new lease renegotiations is 80% less than what they were paying previously for some of their sites. These operators are also carefully evaluating their current cellular tower sites to determine which ones are no longer necessary for maintaining the integrity of the network, and an important factor in their decisions regarding which ones to keep and which not to is the cost of the rent they pay land owners for the sites. Land owners who are able to work together with operators to create financial terms that are less constraining are more likely to have guaranteed cellular tower site rent income for years to come, thanks to successful lease renegotiations.
Remember that site leases are supposed to be mutually beneficial partnerships. Operators get the sites they need to run their networks and land owners benefit from the rental payments for the land. Having operators as tenants can add value to your lease portfolio and can impact your ability to financially leverage your property, so always keep this point in the back of your mind during lease renegotiations.
Controlling the cost of cell site leases is an industry wide effort. All operators building new cell sites are putting much more flexible rent structures into place. Sometimes the lease rate is 80% less they previously have paid for sites. Operators are also carefully evaluating their current cell sites to determine which are necessary to the network. An important factor in their decision is the cost of the site. Landlords who are able to partner with operators to create less constraining financial terms are more likely to guarantee their cell site rent for years to come.
