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THE FINE ART OF NEGOTIATION

AN EXPIRING MOBILE TELCO SITE LEASE

Why these negotiations are much more complex ...

There are a number of mobile site leases that originated in the early 1990s that are starting to reach the end of their negotiated terms. Owners are starting to receive inquiries from the current tenants asking to either buy out the lease in the form of a concurrent lease or to extend the lease for a nominal increase in fees, or in some cases, a drastic decrease in rent.

What makes these negotiations much more difficult than normal lease negotiations is that there are many factors that contribute to how much more (or less) of a lease rate can be negotiated.

In some cases, the lease has been undervalued for years, and the expiration presents an excellent opportunity to renegotiate a better and more profitable lease. Situations where there are many tenants on the tower are likely to be excellent opportunities to renegotiate.

In other cases, the lease was originally signed on the basis of higher expected revenues, and the tenant is currently down on the expected lease payments, i.e., the tower is not profitable for them and the landowner stands a good chance of killing the lease if they fail to extend at reasonable (lower) rates. Also there is a chance that the tenant has decided at a corporate level to lower rents as a matter of course.

There are numerous factors that contribute to these decisions most of which the average landowner does not even know about, yet alone understand. Fortunately, we have negotiated lease extensions with all the major carriers and a tower company. We know how to evaluate a site and to ascertain the difficulty and the expense in building a new site to replace it.

We also have an understanding of the rough estimated income on the tower and what the likely expenses are so that you have a good idea of how hard you can push. Our goal is to assist you in getting as much for your expiring mobile site lease as possible-- the operative word being "get". We keep our advice reasonably couched so we don't put you in a situation where the lease may be terminated.

And that's where the fine art of negotiating comes in; we know how hard to push before the tower owner decides to move the tower. Without the basic information of what the relative value of the expiring mobile site is to the carrier or tower company, you are not negotiating, you are just blindly stabbing for the correct lease amount.

SiteXcell has assisted many clients with lease expirations. Our services can be retained on a negotiated basis in many cases or under our normal hourly consulting rates.

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