More than ever, cell tower landlords are being contacted to extend or sell their current cell tower leases, yet they are not getting true value for these assets. This is another reason why it is vital for a cell tower landlord to understand how the companies who are contacting them determine the value of the their lease, and, more importantly, what the true value their lease is.
When it comes to a cell tower lease extension, property owners may find themselves in a position to decline the extension and take over ownership of the existing tower. This may sound like a radical idea, but in certain situation, it cannot only be done, but should be done.
Why is this alternative sometimes the best choice for a property owner? The main reason is that once a cell tower location becomes an established foundation point for the wireless networks it serves, wireless cell phone carriers located on the tower do not want to leave, as it will not only be extremely expensive, but will have substantial technological barriers. This is when a property owner can use wireless cell phone carriers’ dependency on the site to their advantage.
If a cell tower landlord converts ownership of the existing cell tower through tenant forfeiture or conveyance at the end of a lease term, or builds a replacement tower, the property owner is providing the wireless carriers an easy transition—far easier than a migration by the cell phone carrier to a location even right down street. The best part is that you, the property owner, will pocket all rent received from these wireless carriers, instead of the mere fraction from your current tenant as ground rent.
A cell tower with two or more tenants can garner upwards of $200,000 a year in cell site rental revenue. In contrast, a property owner leasing land to a cell tower company receives somewhere between $10,000 and $20,000 per year. Even if a property owner receives a share of a tower company’s subtenant rents, it would fall far short of the revenue generated from directly operating a cell tower on his/her property.
Seeking guidance from experts in the telecom industry, who have YOUR best interest in mind, will help you determine if taking ownership of a tower is monetarily beneficial for you, and will allow a property owner to establish the relationship it needs with the wireless carriers to accomplish the transition of being the tower owner and structuring agreements with these wireless carriers that can optimize these deals for decades.
Results Matter: In 2020, Vertical Consultants averaged a 302% immediate increase in rents being received by our clients. We get results by being the only full-service telecom consulting firm that can handle your telecom, real estate and negotiation questions all under one roof. No other consulting firm can say that, nor can they match our results. “Advice is Nice but Results are Better”