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Crown Castle Telco Tower and Roof Lease Negotiations

Mobile or Cell Telecommunications Tower Lease Expirations and Extensions

To begin with, siteXcell® is not affiliated in any way, shape or form with Crown Castle International or Crown Castle Australia. If you are interested in visiting their website, please go to www.Crowncastle.com. Crown Castle International and Crown Castle Australia are registered trademarks owned by Crown Castle international.

siteXcell has assisted many landowners with negotiations on the expirations of their mobile tower lease. Crown has been actively attempting to extend their mobile tower ground leases with landowners and at times offering a small, nominal increase for the lease extension or a lump sum payment for new leases that can extend to 99 years. There are a number of reasons for this.

First, the stock market looks closely (and negatively) at the number of mobile tower ground leases that they have that are due to expire in the next 5 years. That is because without the mobile tower ground lease, Crown Castle stands to lose the revenue generated by the tower, including the tower asset itself.

Secondly, the mobile tower lease extensions are essentially a one way commitment by the landowner who receives no guarantee that Crown will continue the lease but now has an obligation to lease his/her property for 20 to 99 more years. Since there is no commitment on the their behalf, why wouldn't the tower company try to convince you to extend the lease? The answer is they will try to get as many years as possible but provide you little, if any, guarantee on their end, depending on how the deal is structured. Many leases grant them the right to terminate with as little as 30 days. A 99 year commitment versus a 30 day commitment… Who is favoured in that scenario?

Third, Crown Castle bought the former Optus and Vodafone tower portfolios of just under 1400 towers and leases in 2000 and 2001. Atlantic. Many of these mobile towers were built in the early to mid 1990's, and the mobile tower leases are now coming up for expiration. The landowners are being contacted by company representatives to negotiate extensions to the lease or sell the lease out directly.

Fourth, Crown Castle has been offering to extend the lease along with asking at times for an expansion of the current lease area. By asking for the expansion along with the offer to extend or buyout the lease, Crown hopes the landowner will not question whether the expansion has value in and of itself.

All of these are good reasons why they would extend the lease but not necessarily good reasons why you should. That is where we come in and add value to your situation. We have provided other owners good advice and negotiated numerous lease extensions on behalf of landowners. We can help you evaluate what they can afford to pay for their lease extension or purchase.

You should be aware that your lease is most likely worth more now. This is due to the fact that Crown now has a tower that may be impossible or difficult to relocate or replace. Many of our clients assume that they can simply check what other landowners are getting in the area and use that for fair market value. Unfortunately, this rarely equates to what the tower lease is actually worth to Crown. Please take a look at our Increase in Lease chart to see what the difference of receiving just $5000 per annum in increased lease payments with 5% escalations means over 20 years (a difference in total rental payments of $178,000!). Please contact us for a free quote on the cost of our services.

Our analyses is based on what we believe Crown Castle should pay and what the current rentals for the site should be in our view. This isn't the same comparable data that Crown's agents may attempt to utilise. Their agents may draw upon a list of what other Crown owners are getting within an “X” kilometre radius; or whichever distance yields the most favourable (meaning lower) average rent. The Crown agent may 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 may only share this data when it is favourable to them. If the rates nearby are significantly higher, chances are they won't tell you as it is their best interests to justify their offer. Our comparable data is based upon what Crown has agreed to pay our clients when pushed in negotiations. In this comparable data, we track how many users are on the tower, how long there was to expiration, how much the original rent was, and how much the renegotiated rent was. It is our strong belief that our comparable data is a much better indicator of value because it is relative to market conditions for expiring leases- not new leases.

We can analyse the risk there would be that Crown chooses to rebuild the tower elsewhere because you don't agree to their offer. Most importantly, we can tell you which negotiation strategies work and which don't. If your mobile tower lease is set to expire or you have been contacted by a Crown representative to extend or purchase 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 20-99 years.

Lastly, Crown often suggests that if you fail to renew your lease, they will look at terminating and moving the tower elsewhere. We can help you asses this risk and help you make an informed decision about what to do.

If your lease is not set to expire and you are evaluating an offer to extend the lease, ask yourself what you get out the extension. Ask Crown whether they would be willing to increase the lease rate going forward. If not, then there typically isn't much of a reason to consider the extension. If they are willing to make concessions, contact us and we can help you maximize your lease revenue.

If your 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.