How much do cell tower companies make in subtenant rents from the wireless carriers subleasing space on the cell tower is a common question that property owners have when it comes to trying to understand the value of the cell tower either to be installed on their property or already occupying their land.
However, this information, or sometimes misinformation, is held closely by the cell tower companies as a mystery for most property owners.
On average, a cell tower company can get paid between $1,500 to over $5,000 per month by a wireless carrier to occupy and use space on the cell tower. In contrast, most property owners around the United States receive cell tower lease rents that equate to less than twenty percent (20%) of the total sublease revenues that are being garnered by the cell tower company leasing their land.
This disparity, unfortunately, is only widening over the life of the cell tower lease agreement, as cell tower company revenues continue to increase, while property owners, who are leasing their land to a cell tower company, rents remain stagnant at best.
How does a property owner prevent this from happening?
A property owner needs to not only focus on the rent he or she is being offered under the cell tower lease agreement, but also needs to focus on the overall structure of the cell tower lease agreement to make sure that he or she is pulled up as the cell tower company continues to generate more and more money from the use of their land.
This upward mobility can be from the property owner negotiating certain revenue share provisions in the cell tower lease agreement, or the ability to renegotiate the cell tower lease agreement based upon the wireless carriers modifying or upgrading their telecom equipment located on the property.
Cell tower companies sometimes use a trick showing a property owner how much money is going to be paid to the property owner over the life of the cell tower lease agreement. Sometimes that number looks pretty good, and that is what a cell tower company is relying upon.
However, there’s one question a property owner needs to ask the cell tower company. How much money is the cell tower company going to be making over the life of that cell tower lease agreement?
Moreover, what is the value they’re getting from using a property owner’s land? Cell tower companies need particular locations, and without the right location/property, their cell tower is worthless.
A property owner would be wise to understand the true value of their property to the cell tower company.
Don’t worry about what they offered you, understand what you’re offering them.
If you have questions regarding a new cell tower lease offer or an existing cell tower lease agreement, contact us today!!!
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