Hi, What is the average percentage for revenue sharing if you are being asked to extend the lease for 30 years? (Lease Negotiations and Valuation Equipment Modifications and Lease Renegotiation Lease Negotiations and Valuation Lease Extensions and Expirations)

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Ken Schmidt

Dec 27, 2017 - 05:26 AM

In our experience, Crown Castle offers revenue sharing to entice the landowner into signing a cell tower lease extension when they perceive that there is limited probability of revenue sharing occuring. By offering the revenue share, Crown doesn't have to negotiate better lease rate terms.

There isn't an average revenue share that landowners should accept with lease extensions- every single lease is different. If there is a significant probability of additional tenants, then the landowner might be better off even if they reduce their current lease rate and take a higher revenue share. If there is no possibility of revenue sharing, then you should be negotiating towards the best base lease rate and ignore revenue sharing all together.

In other words, I wouldn't look to the "average" revenue share without looking at all the other factors at the same time. (current rent, escalation, current sublease rights by Crown, length of time to expiration, number of tenants currently on the tower, possibilty of future tenants). I know this isn't the simple answer you are seeking- but there is no right answer to average revenue share for extensions.

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Hi, What is the average percentage for revenue sharing if you are being asked to extend the lease for 30 years?

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