Hey, this is Steve, I’m one of the partners here at Tower Genius, LLC, and wanted to talk a little bit about a common question that we get. We see this pretty much every week, multiple times a week, even. And the question is, “What are Average Cell Tower Rent Rates or what is the average cell tower lease rate in my area? What are cell tower rents on average in, whatever, South Carolina or New Jersey or nationwide? And so the question is, obviously, you get a cell tower proposal or you have a cell tower lease agreement and you’re looking to extend it. You’re really trying to figure out, “Well, what do I ask these people? What do I counter their offer with? Where should I be as far as the cell tower annual rent is concerned?”
My business partner, Kevin Donahue and I, we’ve spoken with, gosh, at least 30,000 or more cell tower landlords, or at least people that have been presented offers over the years to put a cell phone tower on their property or cell site antennas on the roof. When we’re looking at these offers, one of the questions that we ask, “Hey, what do they offer you? What’s your current monthly rent?” Or we try to see exactly where that is on the dial of things, so we are very much familiar with what is being charged. But the real question is… Yeah, you can say there’s an average, because there is a bunch of people that got completely ripped off. They got two, $300 bucks a month. We even had a Native American tribe that got $100 a year. Okay? They got brutally taken advantage of.
We see all kinds of crazy, crazy stuff, so as far as averages, it’s not even a fair question. It’s a loaded question, actually, because you can have a direct carrier lease, which is, let’s say, in the same town or city, let’s say here in Fort Walton Beach, where I am, or you could have a lease with a cell tower developer. Now, you could have, any cell tower development company that put up a site and they have a Verizon or somebody as their tenant, but that’s not an apples to apples comparison. It’s important to understand who’s proposing the cell site and who’s on that lease agreement.
Yeah, if you looked across in rural areas of the country, you’ll see offers anywhere from $300 bucks a month to $1,000 bucks a month. But that still doesn’t mean anything, because $300 bucks a month, it could be a developer. It could be, I’ve been seeing stuff up in Idaho and Montana and in Wyoming, in these remote areas, in eastern Oregon, where people are offered dirt cheap prices. I’ve seen some meat farmers up in Idaho getting paid 100 bucks a month from a carrier. It’s a local carrier up in Moscow, Idaho. It’s not an apples to apples comparison. I guess if you average things out, yeah, maybe the average rate is $1,000, but that means zero. It means nada, zilch, nothing. You need to look at your particular location.
Now, you could be one of these sites that maybe you are a church congregation and the church building was built there 50, 100 years ago out in the middle of farm country, and now you have residential property all around you and you are like an island in the middle of it. You’re maybe the only location for a half mile in each direction that is even suitable to have a cell site put up on it, maybe in the steeple or a tower, maybe tucked away in the back of the property or parking lot away from the building. What’s the average lease rate there? Well, we’ve got to look at, what’s the zoning in the area? What is the land use for that particular site? Is there a wireless ordinance? Is it in city limits or is it across city limits? Is it outside city limits in the county?
There’s a lot of things, like how difficult is the process going to be? Is this out in the middle of in a rural area or way outside of a metropolitan area, or is this in Bergen County, New Jersey, or is it in Palo Alto, California? There’s lots of things to consider, so just having a blanket statement, there are average cell tower lease rates, that is really not how you want to go into a cell tower negotiation. You want to go in loaded for bear. That’s what you really want to do. Because if you’re not loaded for bear, you’re going up against these tower companies, these carriers and their legal team, their real estate team, and they’ve done this more than once. They’re experienced and they’ll pick you apart.
They’ll pick your attorney apart as well, because your attorney probably doesn’t know anything about this. Maybe they’ve done a handful, or they’ve seen a handful of cell site leases if they’re in a bigger practice, but they haven’t seen hundreds or thousands of these and they don’t talk to telecom landlords on a daily basis like Kevin and I have done here at Tower Genius for the past 14 years. Previously, we were AirWave Management. We changed the name because of a wonderful competitor, I don’t even call him that, in San Diego, who decided to trademark a name after he followed us on Twitter, but I digress.
Anyhow, forget about average cell tower lease rates. I’ll give you another example. We had a client that had approached us in South Carolina. They had a tower on the property. It was a Verizon tower, paying only $700 bucks a month. Some things happened there and a new lease needed to be completely… It wasn’t even an amendment. A completely new cell tower lease needed to be put in place, and we guided the real estate professional. This was a commercial real estate developer, multi-million dollar property owner, but he had no experience with cell tower contracts or valuations.
I’m not going to give you guys the price, because I’m just not going to do that, but let’s just say they were very happy. The rent was significantly improved, but the tactic used by the attorneys representing the carrier was to come back and present the owner… During the negotiation, they reached out to him and they said, “Look, Mr. Landlord, Mr. Property Owner, here are nine or 10 Verizon ground leases,” or they were Verizon ground leases in this particular county. “Hey, look here. Here’s $700 bucks. Here’s $1,000. Here’s $1,200. Here’s $1,000” yada yada yada.
Well, that meant absolutely jack squat, because they didn’t take into consideration the difficulty in decommissioning and relocating that tower across the street. What are the costs involved with that? Would it even be approved by their planning commission? Long story short, that didn’t work. They could throw around average cell tower lease rates as long as they want, but at the end of the day, a cell tower lease rental value is determined on a site by site basis, and that’s the way it goes. That’s the way it works.
If you have questions, we would like to answer them for you. We help people figuring these things out. This is not something that you learn at law school or at college. I’m not an attorney. I actually worked for Enterprise Rent-A-Car 22 years ago, and I got recruited into this business as a Site Acquisition Project Manager up in the New York metropolitan area for Verizon, T-Mobile, and Sprint. Actually, my business partner, Kevin, owned a site acquisition firm at that time, working on that side of the industry. That’s Kevin’s background, and that’s how I cut my teeth in the industry and just learned it by doing it over and over and over and over. We started this business in 2008, and we’ve helped thousands of cell site landlords answer their questions and solve their problems. If we can help you, give us a call at (888) 313-9750, and we look forward to talking to you any time. Thanks a lot.