Cell Tower Leases Exposed: Understanding the Game

If You Follow The Rules, You Will Never Win The Game

Since the cell tower boom kicked off in the 1990’s, the cell tower companies have not only set the rules of the cell tower game, but they have tried to determine who could play.

The cell tower game is not revolutionary in its construction – it was merely a copy of the oil & gas industry’s model of the early 20^thcentury.

How The Lease Structure Benefits Tower Companies

This model was simple in that the oil companies went out to property owners who had little knowledge of the oil & gas industry and got them agree to very long-term leases whereby the property owner was paid a monthly fee and the oil company got to keep every drop of oil.

When the oil wells ran dry, the oil companies could terminate the lease and move on, but the property owners were not only committed for decades, but also had no way to share in the tremendous wealth being harvested from their land.

Sound familiar? The only difference is oil companies pulled up wealth from below your property while cell tower companies are pulling it from above.

The Truth Comes To Light — Eventually

Eventually, property owners with oil wells were availed to more information and better representation, and they began to share in the real value of their property.

The cell tower game relies on simple rules:

First, try to promote that a property owner is lucky that the cell tower company found them;
Second, convince the property owner that the portion of the property they wish to use has little or no value (while not disclosing what thetrue valueof property owner’s land is to them);
Third, minimize the rights the property owner is being asked to give the cell tower company and the restrictions and obligations the landowner is taking on under any cell tower agreement and how it impacts the property owner;
Fourth, the old “market rents” play. Tower companies will gladly share with property owners information about so-called “market rents” in the area. However, they become silent when property owners ask how much money they get paid from the companies on the same tower. Landowners will be told that information is “confidential”.

Don’t follow markets rents:

There is no such thing as market rents, as every cell tower, either new or existing, has its own individual value;

The only reason a cell tower company will tell you what others are getting paid in the area is that it has and continues to be advantageous to them; and

The starting rent for a cell tower in 1998 was about $500, and twenty years later, in 2018, the same offer is being made. Wouldn’t you like to pay the same thing today for something you could have 20 years ago?

Fifth, cell tower companies promote a sense of urgency that the property owner must make a decision. Why? Because if they can get the property owner to make a quick and under-informed decision, it is good for them, not only today, but good for them over the long term of a cell tower lease; and
Finally, when all else fails, they pull out the “neighbor” card. If the property owner does not “do the deal” they will do a deal with your neighbor. Can they or can’t they? Most of the time, the answer is no, they cannot, but even if it is yes, why do a bad deal that could cost you?

The cell tower game can be won by every property owner, but only if they start playing the right gameand not following the rules that have only benefited one side for years.

Success is where preparation, hard work and opportunity meet!

The cell tower game is no different.