Q: Who are the operators who might be able to provide me with cell tower rentals to negotiate on my property?
A: Generally wireless carriers will not give you cell tower rentals directly. One of the wireless site acquisitions or their real estate manager will usually contact you first to gauge your level of interest. You want to make sure before signing a cell tower lease agreement with one of the wireless carriers that do business (ATT, Sprint-Nextel, US Cellular, Metro PCS, ClearWire, Verizon Wireless, Alltel, T-Mobile) or signing a contract with one of the tower development companies. or a major roof management (AAT, Crown, American Tower, SBA) that does your due diligence, but don’t wait too long.
Also if you are lucky enough to be contacted by one of these companies, make sure that you or your attorney do not negotiate yourself from a cell tower lease. Often lawyers start marking lease agreements just to get billable hours. If an operator has to waste a lot of time going back and forth, they’ll move to another site that’s willing to do business, and then you’ll see that site instead of collecting rent from it.
Q: What should I look for in my cell phone tower rental?
A: A properly executed cell tower lease should protect your ground space rights, roof space rights, and address the subleasing/subletting issue that many mobile site owners overlook. It will also include tax language to protect you from judgment. Also, it is very important to develop the site properly (tower height and available ground space) to allow expansion and collocation which will increase cell tower revenue. All cell tower rental exhibition drawings must be completed by a state-licensed architectural engineering firm. I could write a list of a dozen things experienced real estate attorneys with cell tower rentals often miss, but where’s the fun then?
Q: I know nothing about zoning or construction project management, should I bother building a mobile site on the roof of my building?
A: Operator will not select your site if it is not suitable for development from several aspects, especially zoning, and land use perspective. Only entering into cell tower leases places the burden and cost of obtaining permits and approvals on the carrier or tower company, not on you the Owner/Owner.
Q: What if cell towers become obsolete? What happened then?
A: Operators are heavily invested into the development of wireless networks. More than 70% of the US population uses a cell phone. So if you hear rumors about balloons or hot air balloons or satellites being used for cellular technology, don’t be fooled, cell towers will still be around. We haven’t stopped using the Sony Walkman either, they just call it iPod now, but people will always want to have a personal music player, and the same goes for personal communication devices.
Q: How long is my cell tower rental period?
A: When you sign a cell tower lease, the initial lease term is 5 years with two extensions in most cases, and an additional ten years after that. Since no one has had a cell tower lease for 35 years, we can’t say how long it can be extended, but assume that your cell site lease will renew as long as you own the site and people need to talk to each other on wireless devices.
Q: How much can you get for your cell tower rental?
A: Isn’t this always the big question… And our answer is that it depends how much they need your site and where you are. The closer to the heart of a major metro area, the greater the demand for wireless coverage and capacity, and the more you can get. Roof sites vary from land rent. For example in Columbus, Ohio, you might earn $1,100 per month each for the three operators on your roof for a total of $3,300 per month. While if you have cell towers on your property in the same city, you might get $1,200 for the first operator to build the tower, and for the additional carriers paying rent to the first carrier to be put together on their pylons, and then each paying you $900 for land space rights, or a total of $3,000 per month.
Q: Shouldn’t My Lawyer Be Able To Guide Us?
A: Cellular tower leases are very complex and specialized contracts that greatly benefit the cellular operators. But think about it, it’s necessary. Building a cell tower on your property is like asking Donald Trump to say, “I want to own a small piece of your land space, and I’m going to build a structure on your property that costs hundreds of thousands of dollars in MY expenses, and that could potentially earn you $1-$ in rental income. 2 Million over a period of 25-30 years if we can develop it properly. But I will only do this if the contract protects my investment. And if you don’t ‘don’t like it no hard feelings, the guy next door has 2,000 square feet of space and can use the pension.”
Now there is nothing against Mr. Trump, because he is an icon of success, but if you were going to sign a deal with him, would you use a regular lawyer or get a high-end lawyer? And that’s where we run into a talent shortage in the market. Those who can afford it hire specialized cell tower rental attorneys, those who can’t cross their fingers and hope they get a good deal.
That’s why cell tower development and leasing itself is a challenge and why property owners who can find partners to work with are well served in both the short and long term.
Q: How can I get a signed cell tower rental contract for the towers on my property or our roof-mounted antennas?
A: Having an uncle who works in the real estate department at one of the operators is your best bet. If that’s not an option, submitting your site to the operator directly gives you roughly a 1 in 1,000 to 1 in 10,000 chance of site selection.
Here’s our inside secret to getting mobile operators interested in your site, revealed for the first time anywhere. First, pray to the god of Radio Frequency. Then print a dozen 18″ x 24″ “bandit signs” on your property that say in bold “I Want Cell Towers On My Property”. Your neighbors may steal it, but keep it on your property in a visible area. If a site acquisition consultant happens to be driving that way, you should get a call.
Last Question… (Extra Credit)
Q: What’s the difference in signing a cell tower lease for $2,000 per month in 2% annual increments vs. the same monthly rental amount with an initial 3% increase over the 25-year cell tower lease term?
A: The difference is $132,000 over 25 years. WOW!! Are you happy or are you kicking yourself?