Message from Kevin F. Donohue, Managing Partner at Tower Genius.
Cell tower lease scams... Are "Cell Tower Lease Optimization" and cell tower lease "Rent Guarantees" considered to be cell tower lease scams? Decide for yourself.
Yes this is an angry ranting content page about cell tower scams. In the past 7 or 8 years, every year we have spoken with DOZENS of family members of elderly cell tower landlords who have been bullied by tower companies and their minions into accepting horrendous deals and who have been scared with hollow threats of having their towers taken down if they don't accept a rent reduction or "take the deal" that is being offered. Doing the math, we have personally been made aware of HUNDREDS of theses types of sad cell tower stories. Shame on you tower companies. Shame on you. You know who you are.
Sadly, landlords and property owners call us every week complaining of what they consider to be grotesque and blatant violations of their rights being allowed to happen under the noses of the wireless carriers, and which they feel are outright cell tower lease scams. The question is, are the practices of cellular “Lease Optimization” and “Rent Guarantees” actual cell tower leasing scams, or are they simply cutthroat ways that the cellular carriers reduce operating expenses and increase profits?
Tower Genius, that's who.
Probably not. Most of you are not going to have your cellular leases terminated. Think about it. Wireless carriers are NOT going to terminate your lease and take down the cell tower on your property over $200/month or $500/month. There is less than a very small chance that your tower needs to be taken off-air due to industry consolidation or coverage or capacity redundancy. Unfortunately, although small, the chance still exists. So the letters that landlords receive that sound threatening and intimidating are just that - however there is a small amount of truth mixed into them making this barely legitimate.
Try this... hire an attorney and have them send the carrier a nasty-gram and have the carrier sign an affidavit with an RF Propagation study that clearly shows that your specific cell tower is no longer needed. Of course, they will never give you an answer.
The need for coverage and capacity is constantly increasing, especially due to the fast growth of the smart phone market. They need your site. Period.
So in all likelihood, the answer is an overwhelming NO. Besides, why don't they simply go to the other co-locating cellular carriers and have them increase the amount of money that they are paying to rent space on their tower? Why don't they get overhead like T-1 costs or the costs of Electricity reduced at their sites? It's a lot easier to get uninformed landlords to give in to their hardball tactics and fall victim to threats. So, are these cell tower lease scams, or just the carriers telling you how much they appreciate being able to rent space from you?
For example. Let's pick a completely random carrier. Let's look at a typical cell tower located in a metropolitan area. Let's say it only has 1 carrier, which is for argument's sake, T-Mobile. They pay the landlord $2,000 per month for leasing the cell site space. We will dumb this down for the cellular consultants living in the San Diego area. Let's be very conservative. The carrier is paying $1,000 per month for the power, $800 for the T-1 line to the cell site and $2,500 per month to repay the bank who financed construction of the cell tower.
The CTIA estimates that well over 70% of all Americans own cell phones. (If we add in all of the illegal immigrants, that number is probably closer to 80%.) The average cell phone bill is well over $100 per month. Usually, there are THOUSANDS of people living and working around any given cell site.
Additionally, when additional carriers co-locate (rent space) on the same cell tower, let's use AT&T Wireless as the example, AT&T will pay T-Mobile who is the anchor carrier tenant at least $500 to rent space on the tower, which significantly helps their bottom line.
So the lease optimization companies want you to believe that you need to have your rent decreased.
Wireless landlords are contacted by 3rd party “Wireless Consulting” firms who get paid a lot of money to take money out of your pocket by wireless carriers.
They use their own letterhead with a photo copied logo of the particular wireless carrier they are representing. The carriers of course do not contact the property owners themselves so they can have some plausible deniability in the matter.
These nameless companies hunt down property owners and essentially threaten them with phone calls and letters explaining that due to “industry consolidation” and “advances in technology”, there is a reduced need for cell towers IN YOUR AREA, and that they can guarantee the amount of rent you receive if you agree to new terms on the cell tower lease.
They send a quote to “optimize your lease” or provide you with a “rent guarantee”, but always, 100% of the time, take money out of your pocket, and transfer it to their own pockets in the form of the commission they receive for saving money for the carrier. The carriers pays them a commission in proportion to what they reduce your rent by.
Yes, they save the carriers hundreds of thousands of dollars. We've even heard that number to exceed 7 figures monthly on "optimized cell sites". You are never on an even footing in the negotiation. You can't negotiate "up" only down. They offer "protection", but this is equivalent to a shake-down, bullying and thug behavior. This is like the big kid stealing lunch from the little kid.
A “rent guarantee” is what the Chicago thugs did to the neighborhood grocery store. It’s not “lease optimization”, it’s lease transfer. We have seen the letters from upset building and property owners, who are terrified that they can risk losing their towers and cell sites. Kind of sounds like collusion. Smells like a cell tower lease scam.
Now that being said, if the wireless carriers and cell tower companies are able to find landlords willing to accept significantly less rent than you are already receiving, this may justify them in relocating the cell tower to save money long term. So this is a new strategy being employed by the lease optimization consulting firms.
Here’s the scoop. Lease Optimization, Rent Guarantees, and any other fancy name they come up with ALL have the appearance of being cell tower lease scams - even though they are run as legitimate businesses and the carriers approve of them. If it quacks like a duck... If the carrier is going to make a change to your lease, it’s likely going to happen via Registered mail, not through one of these firms or in this manner.
Is Rent Reduction and Lease Optimization considered to be fraud? These so-called wireless consulting firms call tower site owners all over the country, all day long. They look for low hanging fruit to prey on. They are numbers-oriented sales organizations. Their telemarketers have a script that they read and need to stick to.
We know the inside scoop on how these firms operate, and we know the game that these bottom feeding companies are playing. We know the Carrier RF Engineers (Radio Frequency Engineers) and in-house Carrier Attorneys who CRINGE when they hear about these threatening letters going out to property owners. Sadly, cell tower lease optimization and cell tower rent reduction and rent guarantee programs appear to be nothing short of fraud on a mass scale, but will likely never be proven unless an internal whistle blower comes forward.
Why do we think it may possibly be a cell tower lease scam? The wireless landlords being called by these companies have cell sites that are often 2 to 4 years old. Let's use T-Mobile and AT&T as examples again. Would T-Mobile and AT&T be telling us that when they signed their cell tower leases three years ago and spent hundreds of thousands of dollars developing cell sites that they didn't anticipate the operating costs? If this were true it would be a classic Bait & Switch in our opinion on a nationwide scale.
Remember... NEVER accept a cell tower lease buyout or restructuring offer based upon fear of industry consolidation or advances in technology unless you receive a signed affidavit from the cellular carrier's regional director of technology or real estate in your area stating that this is true. (They are looking forward to their pensions and will never purger themselves to save a few hundred dollars a month on rent.)
If you have been contacted by one of these firms and need an advocate to intervene on your behalf, please fill out the contact form on this site.
Find out from Tower Genius how we help landlords and property owners in the USA maximize cell site lease values and get the best possible terms for:
(We value your privacy. Your information will never be shared with any third party.)