More Particularly, Is A Cell Tower Lease A Good Opportunity To Generate Additional Revenue From Real Estate Whether It Be A Piece Of Raw Land Or A Building’s Rooftop?
The quick answer is Yes.
A cell tower lease agreement, or in the case of a building – a rooftop antenna cell site agreement, that is structured correctly can provide a property owner with passive income for decades into the future. The cash flows that are derived from the cell tower or rooftop lease can not only add passive income to your bottom line, they can increase the overall value of your property upon your possible sale of that real estate asset down the road.
However, a poorly structured cell tower lease can actually end up costing the property owner.
Stay Focused On The Overall Structure
When a property owner is presented with a cell tower lease agreement, most property owners “focus” only on the rent that they are being offered under that lease agreement and not the overall structure of the cell tower lease.
Remember, rent is not structure – cell tower rent is the derivative of the overall structure that you are able to negotiate with the cell tower company.
It’s Not Just A Transaction
This is not a real estate transaction; it is a utility transaction, and, as a result, how you view the occupancy and use of the real estate that is going be leased should be different than if you were leasing space in an office, retail or other type of real estate asset.
Also, it is not a property owner’s fault that the cell tower company representative gets them to narrowly focus on the rent, as that is exactly what the cell tower companies want a property owner to do, and they are very successful in doing just that, as they are actually trained to do just that.
At the end of the day, cell tower companies just want the property owner to focus only on the cell tower rent and not how much the cell tower company will be making over the life of that cell tower lease.
You Deserve Better
On average, a cell tower company is only paying the property owner a fraction of the actual revenues that are being paid to the cell tower company by the wireless carriers occupying and using the property owner’s land.
The cell tower company could be making millions of dollars of cell tower revenue over the life of the cell tower lease, while the property owner is only getting paid thousands in return.
If a property owner structures a cell tower lease agreement incorrectly, the property owner will be the launching pad and the cell tower company will be the rocket. The property owner stays on the ground with regards to revenues being received, and the cell tower company continues to go up in value by increasing revenues it is getting paid by the wireless carriers.
Property owners should clearly understand how to structure a cell tower lease agreement from day one of that lease agreement throughout that agreement’s entire term.
Contact Us With Questions
Every property owner should make sure they get the most value out of that cell tower lease agreement not only in the beginning, but throughout the decades that the cell tower is on their land.
If you have questions regarding a cell tower lease, contact us today.
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