Lease Terms

Escalation Clause

The escalation clause in a cellular lease rooftop or tower lease may be one of the essential parts of the contract. The exception being an extraordinary high starting monthly payment.

Compounded Increases (Interest)

An Albert Einstein quote says it all. "Compound interest may be the eighth wonder of the world." That 'wonder' is precisely what is in play here. The highest percentage rent increase along with the shortest periods between increases often yields a higher total life of the lease total than just that of a higher starting rent. This scenario may mean a significantly higher resale value when and if you ever decide to cash in your lease.  

Average Escalation

The average rent escalation clauses today is either 3% every year or 15% every five years. Although the yearly increases are both 3%, the frequency of the hikes in rent is also essential. 

Consumer Price Index and Other Indexes

*The Consumer Price Index (CPI) is a set basket of products purchased by the consumer.

*The Producer Price Index (PPI) is the cost to produce the basket of goods producer.

*Other inflation gauged indices are also used

Other recommended reading:

Right of First Refusal (ROFR)

Colocation Rents

Termination of Your Lease

Cell Site Lease Myths