Cell Site Lease Co-location Rents or ‘Colos’

You want the most out of your cell tower lease? Of course you do. Problem is no cell carrier is going to tell you that you could have a percentage of these very important provisions and you should seek help from a cell lease consultant. You could lose out on 10s of thousands of dollars. Let's get into the sublease provision and why you want some of the action.

Carrier's Right to Sub-lease

All cell tower site leases are going to have the right for the cell carrier or tower company to sublease space on their site. These sublease rents are probably more than your carrier is paying you, maybe a great deal more.

You may be able to negotiate for a portion of those rents. These are referred to as co-location rents or 'colos'. Let's get into an example. Let's say AT&T has approached you and has offered you $1,000 a month for a 100' by 100' site on your property. AT&T will approach other cell phone carriers to try and get them to sublet a portion of the site for $2,000. They may be successful in enticing 2, 3, or more additional cell phone carriers to sublet space. When you negotiate your lease you want to make sure you get a percentage of these co-location rents.

I want to make sure you differentiate this provision when you are negotiating your original lease and when/if you are selling your lease. The confusion arises out of the fact that once your lease is negotiated, you or whoever was to purchase your lease are stuck with the original lease terms for the balance of the original lease term.

Buyout Firms: Co-location Rents

Buyout firms may tell you that you will get some co-location rents when they add a carrier. Fact is they don't have any more right to add carriers than you did until that original lease term is up. After that the new colo percentages that you negotiate with the cell lease buyout firm will be in force.