The Rates & Rents of Cell Tower Leases for 2021 & 2022

On the planet of telecommunications regulation, one query persistently rises to the highest of the record: What’s the going fee for lease or hire of a cell tower lease? Hold studying to be taught the reply. You can also find answers to other common cell lease questions in our many cell tower lease advisories.

Market Fee

The reply comes from tower administration firms, which personal or have the leasing rights for as much as half of all United States cell tower websites. Serving as middlemen, these firms lease the land or rooftop website from the property proprietor and hire it to cell firms or different suppliers. With professional employees and website possession within the tens of hundreds, these billion-dollar firms have bargaining energy akin to that of the cell firms they’re renting to. That is in stark distinction to an atypical property proprietor negotiating a lease with a cell firm. 

Because of this equivalence in market energy and the share of cell websites they management, the rents these firms negotiate are the most effective indicator of what the going or honest market fee is for a cell tower lease.

As a result of some of these firms are publicly held, they’re required to file annual reviews known as 10-Ks with the Securities and Trade Fee. Once you look at filings for 2021 and divide earnings by the quantity of leases reported, it reveals the common rents charged to cell firms vary from $34,000 to $61,000 yearly. Whereas some cell lease rents could also be larger or decrease, this common vary gives a very good information for rents in 2022.

These charges additionally correspond with what we’ve seen from purchasers whose lease phrases entitle them to a share of the hire being charged to cell firms by tower administration firms. Hire checks acquired by our purchasers affirm administration firms are charging charges within the $34,000 to $61,000 per 12 months vary, though some got here in as excessive as $80,000. It vital to notice these hire figures are per lease and may assist property house owners in cell lease negotiations.

A number of Antennas

Many websites have a number of leases as a consequence of two or extra cell firms having antennas on the tower or rooftop in query. The annual reviews word this, indicating that such firms might have a median of 1.5 to 2.5 leases per website. This implies their precise revenues per website might be multiples of the previous rents. Property house owners also needs to take word of this and try to get corresponding multiples if there are a number of cell firms on their tower or rooftop.

Lease Renewals

Understanding common rents is especially vital for property house owners whose cell lease is developing for renewal. Why? As a result of as soon as a tower is constructed, the cell firm with antennas on it wants the tower proper the place it’s. Ought to the tower go away, there could be a spot in protection (or gaps if there are a number of cell firms on the tower). Even when firms attempt to relocate the tower, it prices effectively over a quarter-million {dollars} and may take a 12 months or extra to discover a website very close by that can fill the hole. To not point out the time it can take to choice and allow it, get zoning permission (which isn’t assured for a replica tower), lease it and construct it. Common rents are much less related for a proposed new tower if the lessee can lease one other website close by for much less.

Lease Phrases

Please needless to say with any lease or lease renewal, worth is simply half the battle — phrases are equally vital. In a renewal, for instance, the corporate will sometimes ship a lease modification with a web page or two of wonderful print including phrases of their favor. That is your alternative to evaluation it fastidiously, strike dangerous phrases and alter any phrases within the unique lease you don’t like. Above all, make sure the lease doesn’t hurt the use, growth or gross sales worth of the property with the lease. There are methods to perform this, however that’s for one other advisory.

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