In 2022, cell tower companies and wireless carriers signed cell tower lease agreements with property owners around the United States, for an average of approximately $1,145 per month.
The rates paid across the United States varied based upon the following factors:
- Wireless Network Demand: If an area is either lacking service or has reached or exceeded network capacity.
- Site Supply: How many viable properties/sites exist in the area that can either be used for a cell tower or rooftop cell site?
- Permit/Zoning Restrictions: Does the area have strict zoning permitting requirements that would limit cell towers or rooftop cell sites being installed?
- Type of Cell Site: Is the proposed rent for a new cell tower agreement or an extension of an existing one? Is it a single or multi-subtenant site?
- Cell Tower Lease Maturity: If a cell tower lease was initially signed 15 or more years ago, it may be paying a rent significantly more than one just recently signed due to rent escalators, revenue share payments or other monetary elements of that agreement, so comparing cell tower leases even in the immediate area can be suspect.
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Discover the information that the cell tower companies don’t want you to have. The actual rates in your area and how they impact you.
Average Rent Offer
In 2022, most new cell tower lease offers ranged from $400 per month to $1,800 per month, with the rent rates varying based upon the factors listed above. Cell tower rent rates did increase nominally from 2021, but there was a drop in annual rent escalators from an average of approximately 3% annually to around 2% annually, which on its face seems slight, but over a typical cell tower lease term, which is between 25-30 years, could cost the property owner more than $200,000 over the life of that agreement.
Cell tower values did increase in 2022 based upon the expansion of 5G throughout the United States, resulting in additional/upgraded equipment being added to cell towers across the nation.
This also resulted in existing cell towers being more valuable due to the upgrades and these subtenants committing to longer terms, which prohibits the cell tower companies from relocating the cell tower site.
How Inflation Impacts Value
Lastly, one of the big stories of 2022 was inflation, and cell tower companies were not immune as the average cell tower build cost rose approximately 15% due to rising material and labor cost which results in another barrier for cell tower companies to relocate existing cell tower sites.
The above increase in cell tower value did not prevent cell tower companies in their attempt to either pay lower rent rates for new cell tower sites or to try to reduce existing cell tower rents.
How They Get People To Accept Less
Cell tower companies and wireless carriers employed third-party vendors to aggressively try to renegotiate/reduce rent rates on existing cell site agreements across the United States, and with new cell tower leases site acquisition vendors, who are on the search for new cell tower locations, were directed and rewarded to get property owners to agree to subpar rent rates and cell tower leases with little or no rent escalations over the life of those cell tower lease agreements.
If you have been approached for a new cell tower lease agreement or have an existing cell tower lease agreement, contact us to discuss the true value of your cell tower lease, as there is no such thing as a cell tower market rent, average rate or cell tower rent comparable, as every cell tower lease has its own individual value.
Contact us today to learn more via a free cell tower lease review and phone consultation.
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