In our recent blog on cell tower base rent, we reviewed rent for a cell site lease agreement.
There is another form of rent that is generally available to you in a cell site lease agreement. This type of rent is often referred to as “revenue share” or “colocation revenue.” If your lease includes revenue share, the tower company pays you a portion of any monthly rent they receive if they add other communication companies’ antennas to the tower. That revenue share is additional income for you over and above the lease’s base rent.
How much you may be paid in revenue share is negotiable. The availability of revenue share will also depend to some extent on whether you’re negotiating with a communications company that does not typically enter into a lot of colocation on its towers (e.g., Verizon Wireless), or a tower operator such as Crown Castle that will seek to have multiple tenants on the same tower.
Revenue share is an opportunity to ensure that you participate in the financial upside of your tower lease – but you have to ask for this provision.
We have successfully negotiated revenue share in our clients’ tower lease agreements and can do the same for you.
TIP: the best times to seek revenue share in your agreement is when you’re negotiating a new lease, or if you’re negotiating a lease amendment.