Should I Renew My Cell Tower Lease Right Now?

If the cell tower on your property has recently been sold to a tower company, you have been contacted about a lease renewal. Tower companies typically offer two options:

Tower Companies’ Two Standard Options

1. They will purchase either a lease assignment or long term easement on your land with a one-time payment.
2. They will extend your lease for decades with few changes to your current lease. (Lease extension)

Why Your Interests and the Tower Company’s Interests Diverge

From the cell tower company perspective, either a cell tower lease extension or cell tower lease buyout serves their purpose. They want certainty of tenure at below-market rates for the longest period possible. Your interests and theirs are not aligned.

The Key Question for Property Owners

From the property owner perspective, the key question is: what option provides you with the most benefit over the life of the agreement?

A Few Things Worth Checking Before You Decide

Before agreeing to anything, it can help to know how much time is actually left on your current lease, exactly what rights the company is asking you to give up, and whether what’s being offered reflects the value of the rent, and any future lease value, you’d be giving up in exchange. Owners are often better served taking a little time here rather than signing quickly, especially since urgency in the offer doesn’t always match the urgency of the underlying situation.

A Note on Taxes

A buyout, assignment, or easement payment can be taxed differently than the rental income you’ve been receiving, and the details depend on how the deal is structured and your own situation. This is worth a conversation with your tax professional before you sign anything – we’re glad to help you understand the questions to bring to that conversation.

How Gunnerson Consulting Can Help

Gunnerson Consulting can help you evaluate your options objectively. We work exclusively for property owners – never for wireless carriers or tower companies. Contact us today for a free consultation.