Questions about your lease? Get a call back from us.

Click Here
×

Cell Tower Rental Rates & How To “REALLY” Calculate Them!

Cell Tower Rental Rates & How To "REALLY" Calculate Them!
Steve:
Hey, YouTube. It’s Steve with Tower Genius coming to you from Fort Walton Beach, Florida. Every year, Tower Genius gets hundreds of requests from property owners and landlords who are trying to figure out if the cell tower proposals that they received are fair offers or not, either from offers received either directly from a carrier for a new cell tower to be built on their property or from a cell tower developer looking to put up a cell site on their land. We often get contacted by building owners that have an existing rooftop cell site, or again, carriers looking to place antennas on the roof. These are not apples to apples comparisons, so you can’t just give a blanket range for what a cell site is worth in Texas or in Florida or New Jersey, because not all offers are alike.

If you’re contacted by developer, for example, the developer is going to have their name on the lease as the lessee. They are the actual company that you’re signing the lease with and Verizon or AT&T or Sprint or T-Mobile will become their tenant, and those carriers will pay the developer and the developer will pay you out of those proceeds. So, if a developer is only going to get $2,000 a month from Verizon or T-Mobile, you’re not going to get a monthly rental of $2,200. It just doesn’t work out mathematically.

So, general rule of thumb, if you’re out in the countryside, out in a rural area, most likely your initial offers are going to be somewhere between $300 and $600 a month with 7.5% increases every five years, which is below the rate of inflation. No opportunity to co-locate or sublease, and a lot of times these representatives are going to try to get deals anywhere with a 40 to 99 year term. So, these are really bad deals. You want to avoid them and obviously get a better offer.

Now, a carrier proposal’s a different story. You’ll generally get a better offer from a carrier, and they’ll tell you that they can’t do a lot of the things that we know that they do, because that’s the way that they’re programmed.

So again, if you’re trying to figure out, well, what is the value of this tower lease behind me? Well, I’m looking at it from a camera, but let’s see here. There’s a bunch of parabolic antennas there, a few carriers. It looks like we would have to see exactly who the tenants are on this site. There are multiple. It looks like they’re obviously using this as a repeater site. They’re connecting with back haul to other towers. This is a pretty big tower here in town, so it communicates with other sites as well. And again, once these sites are tied into fiber, it really kind of eliminates the need for these big dishes on the site.

What’s the value of a cell tower lease? If you’re looking at a tower like this that’s owned by Crown Castle or SBA Communications or American Tower, the property owner, the landlord could be getting anywhere from $600 a month up to $18,000 a month. And I’ve seen Crown Castle leases and American Tower leases, SBA leases where they just negotiated a very good deal and they were getting a percentage of the revenue and those towers were loaded. So, those are obviously the exception, but you can see those. Especially on municipal properties or utility company owned properties, electric companies, water districts will have the ability to negotiate much better terms, because where else are these guys going to put their towers?

So, one of the things that we help property owners do and the value that we can add that can really benefit them is to figure out how much leverage they actually have in the deal to negotiate and obtain favorable terms. So, if you have any questions about cell tower lease rates, give us a call at (888) 313-9750.
Steve Kazella

I was recruited out of Enterprise Rent a Car in 2000 by Kevin Donohue, who is my business partner today, to be a real estate site acquisition manager in the NYC Metropolitan Area for his company that was contracting for Verizon Wireless, T-Mobile and Sprint. In 2008 I founded a consulting firm know today as Tower Genius, LLC where Kevin and I have helped many thousands of people and existing cell tower landlords get the help and information they need to succeed at the cell tower negotiating table.

Carriers & Tower Companies Have Their Hired Guns. Shouldn't You?

Negotiating a cell tower lease, trying to figure out what the correct cell tower rent value for your property needs to be, or evaluating the broad range of proposals and offers received by most cell site landlords in 2022 can be very confusing. Connect with Tower Genius or submit your info below, and we'll evaluate your situation, answer your questions and even make a few recommendations you may benefit from.

Request a call back from Tower Genius...

We are here to help you, please provide a working phone number and valid email address so Tower Genius LLC's Managing Partners Kevin Donohue or Steve Kazella can get back to you as soon as possible.
  • Where is your cell tower or future cell site property located, street address, city and state, or best description that you can provide.
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *