Lease Terms

Right of First Refusal

A wrong decision in any one of a dozen provisions in a cell tower lease could cost you dearly. When I say fondly, I mean 10s of thousands of dollars.

Weakens Competitive Bidding

One of the mistakes a landlord will invariably make when negotiating a cell site lease is to accept, what is referred to as a ROFR or the Right of First Refusal. This clause gives the cell carrier or tower company (tenant) the right to purchase your cell site lease at the same price and terms of any offer that a buyer has made and is acceptable to you. For example, you have been offered a generous lump for your lease, the carrier, your tenant, may have 30 days to decide whether they wish to match the generous offer. If they were also bidding, they would have to beat the highest offer.  

Trouble Selling Your Tower Lease

The problem arises when you receive the offer and want a quick sale. The cell carrier had no reason to make you a proposal as they were paying you a monthly rental payment for control of the site, including the right to sub-lease the site to additional carriers, so why should they voluntarily shell out a large lump sum if they don't have too to keep control of the site.

The ROFR or First Right Of Refusal in a cell site lease may prevent cellular buyout firms from making you an offer. The tenant (cell carrier) will not make you an offer, and a buyout firm may not waste their time in writing you an offer. So how do you sell the lease? You may have trouble getting what the contract is worth otherwise.

Control of Your Property

Not scary enough? Some ROFR's include a provision that the site cannot be conveyed separately from the property. The cell site AND the property it is located on, become inseparable for the term of the lease.

Doesn't Affect You?

Not interested in selling your cell site lease, so you don't care about the effects of a ROFR? Who knows what financial needs you may have in the next 30 years (standard original term of cell site leases). You should give me a call before negotiating your contract.

Also, must-reads - "Cell Tower Terminations" | "Cell Tower Lease Co-Location Rents."