I have Cell Tower Ground Lease questions

[durds]

A cell company wishes to rent a quarter acre of my land for cell tower use. Their opening offer is laughable, $500 per month adjusted for inflation, in five year terms renewable for seven terms.

Should I not insist on a percentage of the gross as they sublet to other cell companies or as the tower generates increasing cash flows?

I would appreciate any advice or experience in this matter.

dave.

[GSMFan]

I personally would take what you can get... because if you don't your neighbor will!

[Redmen34]

you should have them throw in at least discounted service for you if not free service. that one thing i would ask for. if they want to use my land to build a cell tower the least they can do is give me some free service or a great discount on service. which company is it?

[RadioConsult]

Five hundred per month, 5 years renewable, is petty much the standard amount for a ground lease. Cellular companies normally pay at lest a year in advance, so 6000 per year is a pretty good Christmas present. When a cell company identifies a search area they usually narrow it down to three choices, so if you don't sign then your neighbor will be celebrating Christmas for the next several years. I would add a stipulation to the agreement that when the cellular company no longer needs the site that all the improvements, building, tower, etc. will revert to you. Cell companies are constantly growing their networks and requirements change, that way if they used your land for a few years and move on at lest you can retain ownership of the building and tower.

[larry]

What they are willing to pay depends on how bad they need the tower and how profitable the surroung area could be. I have seen leases all the way up to $1500 per month in high traffic areas.

[durds]

Thanks for the input. My research since posting the question has turned up a similar amount.

[durds]

One source claims that cell towers initially are money losers but quickly turn into cash cows throwing off $50,000 - $200,000 per month. I would not rent out a retail business space for a firm, fixed price for the next 40 years and don't see why anyone would do the same for a tower lease. I am not shrugging off $6K per year if the tower's contribution to cash flow is minimal; I merely wish a reasonable cut of the action as profits climb.

[Trevor10]

check with spectrasite communications www.spectrasite.com

[larry]

Originally posted by: durds
One source claims that cell towers initially are money losers but quickly turn into cash cows throwing off $50,000 - $200,000 per month. I would not rent out a retail business space for a firm, fixed price for the next 40 years and don't see why anyone would do the same for a tower lease. I am not shrugging off $6K per year if the tower's contribution to cash flow is minimal; I merely wish a reasonable cut of the action as profits climb.

Also most leases come with a annual increase of about 2%-3% a year to keep up with inflation.

[h,hah]

I leased a piece of land to a large carrier, and it has turned out to be the worst mistake I have ever made. I leased a given area for a given price, the carrier seized far more land than agreed, ignored the surveyed plat, refuses to comply with contract and taken every step possible to date to delay resolvement of the issue...........to say the least, a land lease has left a bitter taste in my mouth, and I look forward to forcing contract compliance.........so to all landowners considering a land lease to a carrier, beware!!!!!

[wirles]

Originally Posted by larry

What they are willing to pay depends on how bad they need the tower and how profitable the surroung area could be. I have seen leases all the way up to $1500 per month in high traffic areas.

Even that is cheap. In an area like Northern VA/Metro DC a standard 10k sq. ft. footprint with ingress/egress easements will easily go for $2k/month.

A quarter acre is 10,890 square feet, so they are basically getting a standard 100' x 100' plot for the tower and multiple carriers. If they are only offering $500/month you need to push for more money and/or a piece of any additional equipment leases in the future, because I guarantee they will lease to other carriers and get more than $500/month (granted it will include tower space as well).

Of course, if it were me, I would build and own the tower myself then charge the lease fee for the ground and tower space. Now that they have confirmed the interest in your location for coverage, it is a good risk to spend the money. Where are you located?


Here is an example of how much you can squeeze into that space (this site is a little larger, but you get the point):

https://ftptower.americantower.com/S...06_10_13_8.pdf

[jones]

Originally Posted by larry

What they are willing to pay depends on how bad they need the tower and how profitable the surroung area could be. I have seen leases all the way up to $1500 per month in high traffic areas.

Yup depends on the Area,
I'm sure they will rent it to Other Carriers to Recoup their Costs,
Like Tower Construction.
How about Negotiatiing to Get a Percentage if
they Sublease to other Carriers.
If this is a Rural Area
then they will Have other Choices
like your Neighbor or Electrical Transmission Towers.

[BradQue]

Our daughter and son-in-law just completed a ground lease with a major cell provider in SC. $900/month plus annual escalation IAW a predetermined inflation index. Took some discussion but that's the ending deal.

[h,hah]

did you carefully inspect the site and insure all contract lease/plat survey parameters were complied with?

[hillbilly44]

Originally Posted by durds

One source claims that cell towers initially are money losers but quickly turn into cash cows throwing off $50,000 - $200,000 per month. I would not rent out a retail business space for a firm, fixed price for the next 40 years and don't see why anyone would do the same for a tower lease. I am not shrugging off $6K per year if the tower's contribution to cash flow is minimal; I merely wish a reasonable cut of the action as profits climb.

The price you've been quoted is based on where you are located. If you're in a rural area with a small population then $500 a month isn't bad. Also, if there is only one wireless company on the tower then yes it's a money loser. It takes at least two companies on a tower to make a small profit. The return it's as big of a cash cow unless you're in a high traffic area. Also no tower company is going to give you a cut of the action. They'll just move the site to an alternate location

[chuikov]

Like the others said, it depends where you are and how many other properties might meet the company's needs. If landowners ask for too much money or if they have a lawyer make too many changes to the lease language, the offer can evaporate very quickly.

I've seen many landowners lose deals because they hired over-zealous lawyers who wanted to change every paragraph in the lease to favor the land owner. This can be more damaging than a high rent demand. Some portions of the lease are "deal killers" if the land owner demands that they be removed. Demanding early termination rights or limiting the ability of the company to assign the lease to another firm are two examples.

Delays are another deal killer. If you drag your feet or if your lawyer hangs onto the lease for a few weeks, it can cost you the deal.

A good way to get extra money in the long run is to ask for annual increases of at least 3%. 3% annual is much better than 15% term. And negotiate for reasonable revenue sharing for future collocators.

[SSteen]

I also have cell tower ground lease questions. I've been reading the thread, and since I have 20 acres of land and no cell phone reception where I am, I'd like to approach companies about putting up a tower on my property. But how? Who do I approach within a company? Any suggestions about how to start? Thanks.

[Rollindown95]

Isnt having one on ur property a bit dangerous, i mean with the radiation and all, arent there rules to where they can and cannot put them?

[jones]

Originally Posted by Rollindown95

Isnt having one on ur property a bit dangerous, i mean with the radiation and all, arent there rules to where they can and cannot put them?

Cell Phones have Radiation so Stay Away from them.

[hillbilly44]

Originally Posted by jones

Cell Phones have Radiation so Stay Away from them.

Leave it to Jones to come out with an idiotic comment.

[hillbilly44]

Originally Posted by Rollindown95

Isnt having one on ur property a bit dangerous, i mean with the radiation and all, arent there rules to where they can and cannot put them?

You get more radiation from a light bulb that from a cell site. besides the antennas are at leasr 100ft above you so you should have any worries. Also some areas require "fall" zones so there is a distance between you and a tower.

[hillbilly44]

Originally Posted by SSteen

I also have cell tower ground lease questions. I've been reading the thread, and since I have 20 acres of land and no cell phone reception where I am, I'd like to approach companies about putting up a tower on my property. But how? Who do I approach within a company? Any suggestions about how to start? Thanks.

Steen, try companies like SBA, Crown Castle, American Tower. Give them latitudes/longitudes as a starting reference. Hope this helps.

[SSteen]

Thanks, Hillbilly44. I'll start with those.

[Isgrimnur]

I know Cingular has a list of contacts for their Real Estate and Construction managers that they can provide you for your particular area. They want you to have the property address including county, size (area), latitude/longitude, and map survey (last two if available).

[SSteen]

Wow! Thanks! I'll work on it today!