Cell Tower Leasing FAQs
Q: Who are the carriers that could most likely introduce me to a cell tower lease to trade on my property?
IN: Typically, the wireless carrier will not directly present you with a cell tower lease. One of their real estate or wireless site acquisition managers will usually contact you first to gauge your level of interest. You want to make sure before you enter into a cell tower lease with any of the wireless carriers they do business with (ATT, Sprint-Nextel, US Cellular, Metro PCS, ClearWire, Verizon Wireless, Alltel, T-Mobile) or sign a Contract with any of the big tower development or rooftop management companies (AAT, Crown, American Tower, SBA) that do their due diligence, but don’t expect too much.
Also, if you are lucky enough to be contacted by any of these firms, make sure that neither you nor your attorney negotiates a cell tower lease. Lawyers often start marking up a lease just to get billable hours. If carriers have to waste a lot of time going back and forth, they’ll move to another site that’s willing to do business, and then end up looking at the site instead of charging you rent.
Q: What should I look for in my cell tower lease?
IN: A properly executed cell tower lease should protect your ground space rights, rooftop space rights, and address sublease/sublease issues that are often overlooked by many cell site owners. It will also include fiscal language to protect you from assessments. Additionally, it is critical to properly develop the site (tower height and available ground space) to allow for expansion and siting, which will increase cell tower revenue. All cell tower lease exhibit drawings must be completed by a state licensed architectural engineering firm. I could list a dozen things experienced real estate attorneys regularly lose in cell tower leases, but where’s the fun in that?
Q: I don’t know anything about zoning or construction project management, should I even bother building a cell site on the roof of my building?
IN: Carriers will not select your site if it is not feasible for development from a number of aspects, primarily a zoning and land use perspective. Only enter into a cell tower lease that places the burden and expense of obtaining permits and approvals on the operator or tower company, not on you, the Owner/Lessor.
Q: What happens if cell phone towers become obsolete? What happens then?
IN: Operators are heavily invested in wireless network development. More than 70% of the US population uses cell phones. So if you hear rumors about a balloon or blimp or satellite being used for cellular technology, don’t be fooled, cell phone towers are here to stay. We didn’t stop using Sony Walkmans either, now they’re just called iPods, but people will always want personal music players, and the same goes for personal communication devices.
Q: How long will my cell tower lease be valid for?
IN: When you sign a cell tower lease, the lease term will initially be 5 years with two renewal terms in most cases, and an additional term of ten years after that. Since no one has a 35 year cell tower lease as of yet, we can’t say how long they can be extended, but let’s assume your cell site leases will be extended 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 lease?
IN: Isn’t this always the big question? And our answer is that it depends on how much they need your site and where it is located. The closer you are to the heart of a major metropolitan area, the greater the demand for wireless capacity and coverage, and the more you can get. Rooftop sites vary from ground leases. For example, in Columbus, Ohio, you can get $1,100 per month each of three carriers on your rooftop for a total of $3,300 per month. Whereas if you had a cell phone tower on your property in the same city, you could get $1200 to the first carrier that built the tower, and additional carriers pay rent to the first carrier that co-locates their pole, and then they each pay you to you $900 for floor space rights, or a total of $3,000 per month.
Q: Shouldn’t my attorney be able to guide us?
IN: Leasing a cell tower is a very complex and specialized contract that is heavily weighted in favor of the cellular operator. But think about it, it has to be that way. Building a cell tower on your property is like Donald Trump saying, “I’d like to own a small piece of your land and I’m going to build a structure on your property that costs hundreds of thousands of dollars.” MY expense, and can potentially bring you $1-2 million in rental income over a 25-30 year period if we can develop it properly. But I will only do this if the contract protects my investment. And if I don’t like it, no hard feelings, the guy next door has 2,000 square feet of space and could use the retirement money.”
Now, 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 an average lawyer or would you get a top lawyer? And that’s where we find a shortage of talent in the market. Those who can afford it hire a cell tower leasing attorney, those who can’t cross their fingers and hope to get a good deal.
That’s why developing and leasing cell towers on your own is challenging and why homeowners who can find a partner to work with are well served in both the short and long term.
Q: How can I get a cell tower lease signed for a tower on my property or antennas placed on our roof?
IN: Having an uncle who works in the real estate department at one of the transportation companies is your best option. If that’s not an option, submitting your site directly to the operators gives you roughly a 1 in 1,000 to 1 in 10,000 chance of site selection.
This is our inside secret to getting a cellular operator interested in your site, revealed for the first time anywhere. First, pray to the gods of Radio Frequency. Then print a dozen 18 x 24-inch “bandit signs” on your property that say in bold “I want a cell tower on my property.” Your neighbors will likely steal them, but keep them posted on your property in a visible area. If a site acquisition consultant drives that way, you should get a call.
Last Question… (Extra Credit)
Q: What is the difference between signing a cell tower lease at $2,000 per month with 2% annual increases compared to $2,000 per month? the same monthly rent amount with anticipated 3% increases over a 25-year cell tower lease term?
IN: The difference is $132,000 over 25 years. WOOF!! Are you happy or are you kicking yourself?