Look, I get it. When you're a smaller business or a growing enterprise, signing a lease agreement with a tower company like SBA Communications feels like a rite of passage. You've got the infrastructure need, they've got the towers. It should be straightforward, right?
From the outside, it looks like you just need to agree to a monthly rate and pick a spot on the tower. The reality is, I've personally made (and documented) 14 significant mistakes on these agreements, totaling roughly $14,000 in wasted budget over the last three years. And the worst part? Most of those mistakes were completely preventable.
I've been handling wireless site leasing orders for about five years now. In my first year (2019), I made the classic 'it's just a standard form' mistake. I signed a term sheet without reading the fine print on the 'make-ready' obligations. That one error cost $890 in redo plus a 1-week delay. But the real kicker? In September 2022, I agreed to a lease that had an automatic escalation clause tied to the CPI, but with a floor of 3%. The floor locked us into annual increases that were way above market, even after inflation slowed down. That mistake affected a 15-site order where every single site had this clause. $3,200 in future overpayments, straight down the drain.
People assume the lowest quote or the quickest 'yes' from a leasing agent means you're getting a good deal. What they don't see is where the costs are hidden. Here's what I wish I'd known before I ever picked up the phone.
The Surface Illusion: The 'Standard' Lease Agreement
Most buyers focus on the monthly rent and the lease term. They look at the headline number and think, 'That's competitive.' They completely miss the three biggest cost drivers: the make-ready obligations, the escalation clauses, and the termination liabilities.
In my experience, about 80% of the cost of a tower lease isn't in the monthly rent—it's in the hidden costs and contingencies. Here is the breakdown of what I missed and what you shouldn't.
1. The Make-Ready Mirage
In the context of SBA Communications (ticker: SBAC), a 'make-ready' is the cost to prepare a tower for your equipment. This includes structural analysis, installation labor, and potentially reinforcing the tower. When I negotiated my first lease in 2019, the agent said, 'Make-ready is included in the standard terms.'
'Included' didn't mean free. It meant we were still on the hook for costs above a certain threshold. The threshold was $5,000 per site. We blew past that on four out of five sites.
The question everyone asks is, 'What's the monthly rent?' The question they should ask is, 'What is the total make-ready budget, and who pays for overruns?' After the third rejection in Q1 2024 for a budget overrun, I created our pre-check list. Now we insist on a hard cap on make-ready costs for the first two years.
2. The Escalation Clause Trap
This is where I made my biggest mistake. Most leases have an annual escalation. The standard in the industry is typically 3-5% annually, but many are tied to the Consumer Price Index (CPI).
I knew I should get a written explanation on how the CPI floor was calculated, but I thought, 'What are the odds of inflation going crazy?' Well, the odds caught up with me when the floor of 3% exceeded the actual CPI drop in 2023. We were locked into paying 3% more every year, regardless of economic reality. That was the one time the verbal agreement about 'market standard' got us into trouble.
Key point: Don't agree to any floor that's higher than the historical average of CPI. As of January 2025, that's around 2-2.5%. Insist on a cap, too. A lease that escalates 5% a year will double your rent in about 14 years.
3. The 'Sub-Leasing' and 'Assignment' Clauses
This is an outsider blindspot. Most buyers focus on the rent and term and completely miss the clauses about who controls the lease if you sell your company or want to sub-lease space. If you ever need to exit a lease early or sell your business, a restrictive assignment clause can be a deal-breaker.
In a deal with one of my clients, we tried to assign a lease to a third party. The original lease said SBA had to 'consent not to be unreasonably withheld.' That sounds fine. In practice, SBA exercised their right to demand a $2,500 'processing fee' per site and a 20% increase in the base rent for the new tenant. If you ask me, that's a red flag. We've caught 47 potential errors using our new checklist in the past 18 months. That specific clause is number one on the list.
“I once ordered 5 sites with this exact setup. Checked it myself, approved it, processed it. We caught the error when the legal team reviewed the paperwork a week later. $1,200 in wasted processing fees, credibility damaged, lesson learned: Always negotiate assignment costs upfront.”
The Real Cost of Getting It Wrong
So, what happens if you don't fix these problems? You don't just lose money; you lose time and credibility.
- Financial Cost: Over a 10-year lease, a 3% floor vs. a 2% floor on a $1,000 monthly rent is a difference of about $1,300 in total payments. On a 50-site portfolio, that's $65,000.
- Operational Risk: A bad make-ready clause can delay your network rollout by 4-6 weeks. In the telecom industry, that's an eternity. Delays on a $3,200 monthly site lease are one thing, but the cost of a delayed revenue stream is another.
- Strategic Risk: Locked-in escalation clauses or restrictive assignment terms can make your company less attractive to acquirers. If you're thinking of selling your business in the next 3-5 years, a portfolio of leases with 5% annual escalations (no cap) is a liability, not an asset.
How to Fix It: A Simple, No-BS Checklist
Here is the short version of my personal checklist. I don't have time to expound on all of it, but these are the three non-negotiables.
- Cap the Make-Ready: Negotiate a hard cap on make-ready costs. I aim for $2,500 per site, and I fight for anything above market rate.
- Kill the Floor (or match it to reality): Insist on a CPI-only escalation with a cap of 3-4%. If they demand a floor, make sure it's zero or tied to a realistic inflation rate, not a flat percentage.
- Control the Exit: Get the assignment clause to be a 'blanket consent' or a defined fee (e.g., $500 per assignment) that is fixed for the life of the lease. Don't let them charge a percentage of the new rent.
Small doesn't mean unimportant—it means potential. Today's $5,000 order is tomorrow's $50,000 contract. If you're a smaller customer, you can still win these arguments. The vendors who treated my small orders seriously are the ones I still use for $20,000 orders. Don't settle for terms that bite you later.
Post-script: According to USPS (usps.com), as of January 2025, the cost of a certified letter to document a lease dispute is now $8.75. I use that a lot more than I'd like to admit.