Cell Tower Lease Values
I get the question, “What is my cell tower/rooftop lease worth”?, all the time. Problem is, there is no pat answer. Different buyers will pay different prices for different leases at different times. In other words, each lease needs to be taken apart, piece by piece.
Location of the Tower/Rooftop
A cell tower’s location is intricate in the evaluation of the lease’s value. Some older towers may have become less important to cellular phone carriers because they have filled in their coverage by buying another carrier’s cell site. They may have made a deal to locate their equipment on a competitor’s site or even purchased an entire carrier and this site, your site, may have become redundant. Whether your site is considered a necessary part of the coverage now and in the future is a fundamental of pricing when buyers bid on your cell site. What the prevailing rent is in the area paid by a carrier or its competitors is also a factor in the calculation of the value.
Remaining Term on Your Lease
Most buyers are not going to let you know that the less time you have on your tower lease, the more the lease is worth. Since most leases are sub-par when it comes to monthly rent, escalators and co-location, buyers know that historically they will be able to re-negotiate the lease. Often times they will be able to double the rent, improve the escalators and add participation in the sub-leases they may have with other carriers who house their equipment and antennae.
Rent, Escalations and Co-location Rents
Rents, escalation clauses and co-location rents are all negotiable to a point. You need to understand the importance of that cell site to the carrier(s) occupying the tower/rooftop. Some sites are more important than others. Cell site lease buyers will take this into account when bidding on a lease.
Know the Cell Tower Buyers
Remember you are dealing with companies that are in business to make a profit and their sales people get paid more if they can purchase your lease for less. Having been introduced and trained in the cellular tower business by one of the top buyers in the business, I am very familiar with the whole sales routine. I withdrew from the buyers’ side of the business and decided to put myself in the middle, helping sellers get through the many, many ploys and tactics that I thought were not upfront and transparent. Don’t get me wrong, there are some great companies out there, including the one that trained me. the problem gets back to the less that is paid for a cell tower lease, the more the sales person is paid.
I can tell you that most sales of tower and rooftop leases are under priced. And I can also tell you that there is a surefire way to make sure you get the most out of your site lease, without getting yourselves into buyout that you will pay for the next 30 to 99 years.
Using a Cell Tower Consultant
A cell tower lease adviser/consultant or even a cell tower broker will make you money. The sales people hired by cell site lease aggregators are well trained, motivated and will take advantage when they can. You need representation to get the most out of your lease.
Andrew G. Kellerman background includes: Stocks, Bonds, Insurance, Options, Commodities, Real estate sales and syndication, tower lease sales and brokering and as a Financial Adviser involving many Fortune 500 companies.
Give me a call before you negotiate! 760-470-1782 or fill out an application to get an idea of what your cell lease is worth.