Have you been constantly asking yourself ‘what is my cell tower lease rate?’ If yes, DO NOT ignore this essential fact sheet by the industry’s best
There is an advantage to knowing your site-specific cell tower lease rate and a huge disadvantage not knowing it. Do you know if you are leaving money on the table when negotiating a cell tower lease amendment or lease extension? When deciding to accept an offer on a newly proposed cell tower or cell site, is it worth encumbering your property without knowing the correct valuation of your lease agreement?
Wireless carriers in the USA are constantly building out and improving their networks. There are hundreds of thousands of Verizon Wireless, AT&T, T-Mobile Sprint, and U.S. Cellular cell towers and cell sites covering the landscape. Many wireless landlords will receive proposals this year to upgrade their sites, expand the leased area, extend the lease, sell the rental stream for a lump sum, reduce the rent, and possibly to consent to have their site decommissioned and leave the equipment on the rooftop in exchange for a one-time payment.
Hundreds of thousands of new additional 5G antenna nodes will be deployed over the next several years in the USA as the fifth-generation wireless network is rolled out. And there are about 25,000 new DISH Wireless cell sites coming to a town or city near you. These cell sites are installed on building rooftops, church steeples, municipal water tanks, and free-standing towers.
Some are for macro-cell site installations and some are for small cells. Macro sites and small cells serve different purposes and have different values. Cell sites installed on rooftops and structures usually have a direct lease with the property or building owner.
The cell sites installed on monopoles, lattice, or guyed wire towers are usually subleased from three large tower management companies, American Tower Corporation, Crown Castle International, or SBA Communications. These firms control about 80% of cell towers in the USA and generally have a ground lease directly with the property owner. Most of the “big 3” tower companies purchased their tower portfolios directly from Verizon Wireless, AT&T, T-Mobile, and Sprint.
Understand what category your newly proposed cell tower and lease falls under to get a better understanding of the value.
- Is the proposed new cell site or cell tower being leased directly with a carrier or is it with a cell tower developer or tower management firm? Who is the “LESSEE” or “TENANT” in the lease agreement?
- Is the proposed lease agreement for a small cell lease or is it for a macro site?
Once you have determined if the proposal is for a macro or small cell site, and if the lease is a direct carrier lease or a tower developer lease, the next step is to evaluate why they chose your location, and what other possible alternative choices they have nearby. The more alternate sites that you can eliminate, the better your chance that your location has of getting a fair deal. The more choices that they have, the less of a chance you have of getting a fair deal. Understanding cell tower lease rental values for your location can also help you to determine whether it is worthwhile to encumber your property with a cell site for the next 15, 25, or 50 years.
Existing cell tower leases being amendment or extended before expiration need to be evaluated closely.
- Is the cell tower lease amendment or lease extension offer being made by a third party or directly by the cell tower company that is leasing the tower?
- Does the lease amendment or extension proposal contain a “guarantee period” or a reduction in rent, rent escalations, or for you to agree to modify certain terms pertaining to the tower company’s use or rights?
- Is the tower a single carrier or multi-carrier site? How many subtenants are leasing or subleasing tower or ground space within the “Leased Premises” or fenced-in area?
- Is the “FLE DATE” (final lease expiration date) in 5 years or less (final term), in 10 years or less (second to the last term), in 15 years or less (usually about 3 terms left) or is there more than 15+ years remaining in your cell tower lease before it expires?
What exactly is a fair cell site lease rental price?
We have been asked thousands of times by landowners and building owners to help them to determine the rental value of the cell site or cell tower being proposed at their location or that already exists at their location.
- What’s the cell tower worth?
- What’s a fair annual rental price?
- What should I ask for in rental escalations?
- Is the price they offered fair?
- Is this a low-ball offer?
- Can I get more?
- Will they walk away if I ask for more?
- What is the price per antenna?
- Is there a per antenna price?
- Is there a square foot price?
- What is the expansion are worth?
- How much should I charge if they want to add a generator?
- Can I charge them more if they want to add additional equipment?
- Should I agree to reduce their rent?
- Will they take down the cell tower if I do not give them a rent reduction?
Request a cell tower lease valuation consultation with Tower Genius.
Our point is, that there are a lot of things to consider and evaluate when looking at a cell tower lease proposal. The person working for the cell tower developer or the leasing site acquisition representative from the wireless carrier is not going to tell you the key information that you need to obtain a favorable cell tower rental agreement.
Why not get the perspective of wireless leasing industry experts before you dive headfirst into your cell tower negotiation? Talk to Tower Genius, the USA’s premier cell tower lease consultants and transactional coaches. We save cell tower landlords time and money and frustration. Schedule a $99 dollar, 30-minute cell tower lease discovery call with Kevin Donohue or Steve Kazella, the Partners of Tower Genius.