Cell Tower Lease Expansions
At Cell Tower Attorney, we have assisted many landowners throughout the country in connection with the renegotiation of existing cell tower leases. One of the more frequent reasons why our clients are approached to renegotiate their existing leases is an expansion of the leased premises. Specifically, many leaseholders are being approached by the wireless carriers or tower companies seeking to lease additional square footage or ground space beyond what was granted in the original lease agreement. Some of the reasons why the carrier or tower company may seek to expand the leased space are as follows:
- The carrier or tower company only leased enough space to accommodate its technological requirements at that time. Because of changes in technology, the carrier may need more space for its equipment. In addition, the carrier or tower company may be interested in subleasing to another carrier and such additional square footage may not have been contemplated under the existing lease.
- As a result of a merger between carriers (Sprint/Nextel and AT&T/Cingular), a tenant carrier may seek to consolidate all of its equipment at one site rather than having two sites in close geographical proximity. In doing so, the carrier reduces its monthly rental obligation which in turns reduces operating expenses. This may require expansion of the leased premises for the one remaining site.
- The carrier may seek to add an additional service to its network. For example, Sprint is in the process of deploying a service called WiMAX under the brand name Xohm which may require additional square footage.
- Tower companies and lease buyout firms (such as Unison) seek to purchase additional ground space when they extend the term of the existing lease or purchase the existing lease on the property. In many instances, the additional square footage is an important business term associated with a lease extension or buyout as it makes the property much more viable for the possibility of additional carriers in the future and therefore, creates much more value for the tower company or lease buyout firm.
When faced with a request to increase the leased premises of an existing cell tower lease, a landowner must consider the following questions:
What is the purpose of the additional space and is that purpose allowed under the existing lease?
How will the additional space impact other provisions in the existing lease as well as my use of the property?
What is the market value of the additional square footage?
Does the expansion provide me with an opportunity to renegotiate other provisions of the lease that may have been overlooked when the lease was originally negotiated?
At Cell Tower Attorney, we can help you answer these and any other questions you may have regarding a proposal from a carrier to expand the leased premises under an existing cell tower lease. If you are looking for information regarding the appropriate monthly rental amount, our related company, Steel in the Air, can assist you with negotiating a fair market rent for an expansion of the premises in an existing cell tower lease.
If you have been approached by a wireless carrier seeking to expand the leased premises, please feel free to contact us.