How often are cell tower lease rates renegotiated?

The frequency at which cell tower lease rates are renegotiated can vary widely and is typically determined by the terms of the lease agreement between the property owner and the cell tower company. Lease rates can be renegotiated under the following circumstances:

1. Lease Expiration: When the initial lease term expires, typically every 5 to 30 years, there is an opportunity to renegotiate the lease rates. The specific terms and conditions for renewal or renegotiation are usually outlined in the original lease agreement. Property owners and tower companies can engage in negotiations to determine new rates for the next lease term.
2. Renewal or Extension Clauses: Some lease agreements include clauses that allow for automatic lease renewal or extensions if certain conditions are met. In such cases, the lease rates may be renegotiated at the time of renewal or extension.
3. Lease Amendment: Lease agreements may be amended or modified to reflect changes in the property, site conditions, or additional services provided by the property owner. These amendments can include renegotiating lease rates if applicable.
4. Market Changes: Significant changes in market conditions, such as increased demand for wireless coverage in the area or changes in lease rates for similar properties, can create opportunities for lease rate renegotiation. Property owners or tower companies may initiate discussions when such changes occur.
5. Technology Upgrades: When the cell tower company needs to make substantial technology upgrades or modifications to the tower or equipment on the site, lease rate negotiations may take place to account for these changes.
6. Colocation Agreements: If the tower has the capacity to accommodate additional carriers, a property owner may negotiate higher lease rates when allowing colocation by other wireless carriers.
7. Voluntary Negotiation: In some cases, either the property owner or the tower company may initiate voluntary negotiations outside of the typical lease expiration date if both parties agree to consider rate adjustments.

The specific triggers and opportunities for lease rate renegotiation are defined in the lease agreement. It’s essential for property owners to review their lease agreements carefully to understand the terms and conditions related to renegotiation, renewal, or amendment of lease rates.

While lease rate renegotiations can occur, it’s important to recognize that they are subject to negotiation between the property owner and the cell tower company. The outcome of such negotiations will depend on factors such as market conditions, the property’s strategic importance, and the interests of both parties. Property owners should consider consulting with experts in cell tower leasing and legal professionals to ensure they receive fair market value and favorable terms during renegotiation processes.