What are the average cell tower rent rates in my area is a common question that is asked by property owners who have either been approached for a new cell tower lease or asked to extend or modify an existing cell tower lease agreement.
Let us get this settled. While there may actually be an “average cell tower lease rent rate” in your area, it should not be used by a property owner to negotiate a new cell tower lease or renegotiate an existing one.
Don’t Follow Market Rents
A property owner should be the exception and not the rule when structuring a cell tower lease. Following so-called comparable cell tower rents in your “market” not only results in a property owner being undervalued on the first day of the cell tower lease agreement, but throughout the lease term.
Cell tower companies will try to get a property owner to follow a traditional real estate model when they are asked to structure a cell tower lease. This includes trying to get a property owner to agree to a standard price per square foot, which is especially the case either when a property owner is asked to lease space on a rooftop or add additional areas to an existing cell tower lease agreement. A property owner should always be focused not so much on the square footage being occupied or used, but on the value being derived from the space being leased by the cell tower company.
Remember, cell tower companies are always wanting you to follow the path that is most advantageous to them and actually pay many of their site acquisition consultants enticing performance bonuses for getting unsuspecting property owners to sign cell tower lease agreements that tie up the property at low rent rates and terms that provide the cell tower companies with the ability to have unfettered used of the property owner’s land with unlimited upside without paying the property owner one more dollar in rent.
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.
As for existing cell tower leases, wireless carriers and cell tower companies are continuing to work hard to get property owners to lower their cell tower rents even though the cell tower companies revenues and profits continue to grow. Cell tower companies employ third-party contractors to aggressively attempt to renegotiate/reduce rent rates on existing cell site agreements across the United States and based upon tactics that include misinformation regarding the demise of the wireless industry or the potential relocation of the cell tower if the property owner does not take up their offer to reduce rents.
The rent you collect under a cell tower lease agreement should never depend on the average cell tower lease rates of neighboring properties, but on the value of your one site.
We Are Ready To Help You
Vertical Consultants works with property owners across the United States to both maximize the cell tower rents that they receive under any cell tower agreement, with a proposed new lease or an established existing one.
Vertical Consultant is ready to help you understand the opportunity and risks that comes with leasing your land to a cell tower company.
Contact us today to get a free cell tower lease review and follow-up phone consultation.
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