Although each wireless lease is different, most leases permit the tower operator or wireless carrier tenant to terminate a cell tower lease for many reasons, typically with only 30-90 days’ notice.
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How to Terminate a Cell Tower Lease
If the lease agreement has a clause already written in the contract, it may be as simple as providing written notice of the cancellation to a landlord much like a residential lease agreement. When a carrier terminates a cell tower lease, they decommission the antenna equipment and remove typically everything but the pole.
Why Carriers Terminate Leases
As technology changes, so may the need for your cell site. Instead of macro or large towers, a carrier may find they can produce better signal quality while being more cost-effective by installing small cells. The value they place on your tower could go down over time and often lead a wireless carrier to renegotiate the lease agreement or cancel the agreement altogether.
Another example is consolidation; recently T-Mobile purchased Sprint. With the purchase, T-Mobile has decided to close down almost all Sprint Towers and not perform on the current leases, leaving the landlord with no future income or value to the current cell tower lease.
Why Tower Leases are High-Risk Investments
As an owner of less than a handful of towers, it is almost impossible to borrow against a cell site lease at your local bank. In order to obtain financing for these high-risk investments, Tower Investors spread the risk of cell site leases being terminated across a large portfolio of sites.
Although collecting monthly rent for your cell tower lease might seem like a good idea, it is often more fruitful to sell your tower lease rights for a large upfront payment; then place those funds in other investment opportunities.
