How to Evaluate a Tower Lease Agreement: A 5-Step Checklist for Carriers

Who This Checklist Is For

If you're a carrier network engineer or procurement manager reviewing a ground lease or rooftop agreement from a tower company like SBA Communications (SBAC), this one's for you.

I review lease drafts and site development contracts for a living—roughly 200+ unique documents a year for our national portfolio. In my 4 years in this role, I've seen the same mistakes surface again and again. Not because carriers don't know what they're doing, but because the standard lease form is stacked with terms that look fair but aren't.

Here's a 5-step checklist to walk through before you sign. It's not exhaustive, but it covers the 80% of issues that cause 95% of the headaches.

Step 1: Find the Hidden Escalation Traps

Every lease has an escalation clause. The question is what it's tied to.

The obvious: Fixed percentage increases (e.g., 3% annually). These are straightforward—you can model them easily.

The less obvious: Escalation tied to CPI or some proprietary index. Here's where it gets tricky. In my experience, leases tied to something like "CPI-U plus 2%" have cost carriers more than fixed increases over a 10-year term. Not always—but enough that I flag them every time.

Check for:

• CPI caps (e.g., "not to exceed 5% annually")
• CPI floors (e.g., "not less than 2% annually")
• Reset periods (annual vs. every 3 years)

My rule of thumb: If the escalation formula is longer than the rent amount clause, you need to model it. I want to say I've seen carriers lose 8-12% in real rent growth over a lease term because they didn't model the CPI floor kicking in during low-inflation years. But don't quote me on that exact figure—it varies by market and timing.

Step 2: Understand the 'Cure' and 'Collocation' Rights

This is the one most people gloss over. The lease will say something like: "Tenant may collocate additional antennas subject to Lessor's approval, which shall not be unreasonably withheld." Sounds fair, right?

But read the fine print: what's the process? How many days? What's the fee structure for collocation amendments?

In a 2024 audit, we found three separate leases where the collocation amendment process required a 60-day review and a $2,500 processing fee per amendment. That's reasonable on paper. But it meant that for routine collocations, the carrier either paid the fee or delayed the deployment. On a 50,000-unit annual order (well, lease portfolio), those costs add up fast.

Look for:

• Explicit amendment fees (and whether they escalate)
• Timeframes for approval (and what happens if Lessor misses them)
• Whether collocation is allowed without a full lease renegotiation

One thing I've seen work: A carrier I worked with got a clause added that waived amendment fees for the first three collocations per site. The tower company agreed. That one change saved them roughly $15,000 over two years.

Step 3: Check the Financial Health of the Lessor

You're evaluating a lease from SBA Communications (or another tower REIT). Their credit profile matters. If the lessor goes under or gets downgraded, your lease terms could change or the tower could be sold to a less cooperative operator.

Here's what I check: The Moody's rating for the REIT. SBA Communications (SBAC) is investment-grade—that's good. But I also check the trend. A downgrade can trigger a revaluation of your entire lease portfolio from a risk perspective.

In my experience, a BBB- rated lessor (like SBA Communications, for example) is a different counterparty from an A-rated one. The lower the rating, the more I push for protective clauses like:

• Right of first refusal on any sale
• Limitations on assignment without consent
• Clear termination rights if the lessor's credit profile drops below investment grade

Note to self: I've been meaning to write a quick-reference card for this. Maybe next quarter.

Step 4: Negotiate the 'Hidden' Provisions

Price isn't everything. But in tower leases, the non-price terms often have a bigger financial impact than the base rent.

Examples I've seen actually work:

• Move-in/move-out incentives: Some tower companies offer a free month of rent for a 5-year term if you commit to a minimum number of collocations. I've seen carriers save $3,000-5,000 per site this way.
• Bulk discounts: If you're signing 10+ leases in a region, ask. I've seen 5-10% discounts on rent for portfolios of 20+ sites.
• Sublease rights: If you might sublease space to a third-party (like a small cell deployer), get explicit subleasing rights now. Adding it later is much harder.

The $200 savings turned into a $1,500 problem when a carrier I worked with skipped negotiating the amendment fee schedule. The 'cheap' lease ended up costing 30% more in administrative fees over 3 years.

Step 5: Calculate the Total Cost of Occupancy (TCO)

This is the big one. Stop comparing just the base rent between two lease proposals. That's like comparing the sticker price of two cars without looking at fuel costs, insurance, and maintenance.

Here's my TCO model for tower leases:

• Base Rent: Monthly or annual rent payment
• Escalation: Model out 5 and 10-year costs using the formula
• Amendment Fees: Expected number × average fee. Amortize over the term.
• Collocation Fees: Same logic
• Legal/Review Costs: Your internal time. Literally bill it.
• Termination Costs: What happens if you need to leave early? Liquidated damages?

I know this sounds like a lot—and it is. But I've seen carriers avoid a $10,000 mistake by doing this math before signing. The lowest quoted lease often has the highest TCO because of hidden amendment fees and aggressive escalation.

Common Mistakes I See Carriers Make

1. Assuming all tower leases are the same. They're not. SBA Communications' standard form is different from Crown Castle's or American Tower's. Read each one on its own terms.
2. Ignoring the 'quiet enjoyment' clause. This one matters more than it sounds. If the lease doesn't protect your equipment from interference (like tree maintenance or other tenants), you're stuck.
3. Not checking the 'as-built' documentation. The lease says the tower can support your equipment weight. Have you verified? I've seen carriers sign leases and then discover the tower needs reinforcement—at their cost.
4. Waiting too long to start negotiations. Lease review should start at least 60 days before your deployment deadline. I've seen carriers rush and sign bad terms because they were backed into a corner.

Final thought: The cheapest lease isn't the cheapest if it costs you time, flexibility, or network performance. Always calculate the TCO. Your network ops team will thank you.