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 hire a tower for painting.
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.