It’s common for major cell tower companies, such as Vertical Bridge, SBA Communications, Crown Castle, American Tower, Harmoni Towers, TowerCo, or any number of owner/operators of cell towers, to include a Right of First Refusal (ROFR) clause in their cell tower leases.
Here’s why that matters:
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The company’s freedom: The cell tower company can easily sell or transfer its lease to another company.
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Your restrictions: As the property owner, you have a much harder time selling your property. You have to offer it to the existing tower company first, and they can simply match any offer you get. This makes your property less appealing to other buyers.
A Right of First Refusal (ROFR) is a legal clause that gives a specific party the right to buy a property before the owner can sell it to a third party. While a ROFR may seem harmless, it can be detrimental to property owners for several reasons.
We’ve seen how a single clause in a cell tower lease can cost you a significant amount of money.
Before signing, have an expert review your cell tower lease agreement to ensure terms reflect fair market value.
EXAMPLE:
For example, a property owner recently received an offer to sell their cell tower lease at a great price, but the lease included a tricky clause. The clause said they couldn’t sell the lease on its own; they could only sell it if they sold the entire property at the same time.
Even though the property owner was offered a great price by an outside company, the tower company used its power to force a lower offer. In the end, the owner was offered a deal by the existing tower owner at a price that was over $100,000 less than the original offer.
A ROFR is one of many clauses that prove why lease terms matter more than rent in a cell tower lease.
Be cautious in your lease negotiations. We have nearly two decades of experience in the industry, helping landlords navigate these complex situations.
Many property owners fail to realize why lease terms matter more than rent, as the fine print regarding termination and relocation often dictates the long-term security of your investment. This oversight is frequently cited as one of the 5 mistakes selling a cell tower lease, where landlords prioritize a high monthly check over the legal flexibility needed to protect their land. To avoid these pitfalls, you must first understand what a cell tower lease buyout is. and how those initial contract terms will ultimately determine the lump-sum value of your wireless asset.
For expert guidance on your cell tower lease, reach out to JW Tower & Telecom Consulting at [email protected] or (720) 295-5333 for a free consultation.
