If a property is determined to be suitable for a Ithum tower the next step will be an engagement of the property by and through a site acquisition agent or a turf vendor. That agent of the tower company will typically have a low-ball starting lease rate in mind when they contact a property owner. So what factors does that representative use to determine a lease rate for your property?
1. The primary factor is what similar property owners have already agreed to. Site acquisition agents are local in nature as they generally have years of experience a local or region where they are deployed to acquire a new cell tower location. They have guidelines and more importantly incentives to get the best deal for the tower company.
2. An experience and skilled site acquisition professional will have already examined the area and chosen the sites that best match the cell tower location requirements (area, space needed, etc.) provided by the wireless carrier or tower company.
3. A good site acquisition agent should know whether a property selected will work under local zoning regulations, FCC & FAA requirements, and whether the site will be cost advantageous or prohibitive.
4. Site acquisition agents will perform a competitive analysis of the targeted area to establish whether there are multiple properties that serve as options and that meet the cell phone carrier’s or tower company’s requirements.
All this being said, these agents and representatives will not provide you with the information they have acquired, why? they work for the tower companies and you should always remember that. Cell Tower Lease Rates: Directly Related To The Availability of Options So like any basic negotiation price is determined by supply and demand. So what should a property owner know to make sure it optimizing the value of it site:
1. Cell tower lease rates trend higher in more populated areas, some urban areas command completely different lease rates even though they are similar in demographics but this not the only factor.
2. Zoning and permitting requirements play a very important factor in the value of a site. The more liberal the permitting standard the easier to it is to find several sites that meet a cell phone carrier or tower company’s criteria. Subsequently, a cell phone carrier/tower company will need to pay more for a cell tower lease in an area that has more stringent standards than it would in one that has more lax standards no matter the population of the area.
Other Factors That Influence Cell Tower Lease Rates
1. Construction Limitations – A site acquisition agent will conclude both if a site has suitable access and space necessary for construction of a tower. An optimal site will have level terrain with minimal or no ground or airwave obstructions (i.e. tree cover); as the more obstacles the more expensive it for a tower company to construct on a site. A tower company/carrier will sometimes be willing to pay higher rent for a more suitable site in order to avoid more expensive construction costs on a similar site.
2. Zoning/Permitting Restrictions – Prior to a cell phone carrier/tower company getting approval to build on a site they must first get a conditional use permit or special use permit to construct their facility. Most local governments have permitting requirements that will establish parameters on where a tower may be constructed, therefore one property may be able to skate through the approval process while other very similar properties in the same immediate area may not. What does this mean for a property owner? If its property is that one that works that property owner may be able to ask for a premium when it comes to a cell tower lease rate.
3. Access to Power and Telephone Service – All tower locations need utility and telephone service. As a result, the farther the distance to telephone service and power, the higher the price tag to the cell tower developer. So a site acquisition agent will always factor this in what they can pay for rent.
4. Ground Elevation – Topography is important, but not the most important factor by far as cost will always outweigh elevation. If you have the highest point in the city or county that is not a guarantee you will be chosen. The cell phone carrier/tower company always has the option to build a taller cell tower at a lower evaluation as it may be extremely expensive at the end of the day.
5. Cell Tower Site Alternatives – All cell phone carriers build tower sites to fit inside their network. Cell towers are very similar to pieces of a puzzle that, at the end of the day, have to fit together. The cell towers are set up to “transfer traffic” from one cell tower to the other. The cell phone carriers have an exact “search ring” that they use when constructing a cell tower, so that it will be able to easily transfer phone traffic. These search ring areas can be as small as.25 mile to as large as 5 miles. If a property owner know the alternatives a cell phone carrier/tower company may have, as this will give a property the information they need to optimize the value of your property.
What Is The True Value Of My Property? A property owner needs to determine what fair rent should be for a cell phone carrier’s/ tower company’s occupancy and use of its property and also make sure the tower lease is structured in a manner in order for you to optimize the value of your property. A property owner also needs to determine what alternatives that company may have in your immediate area and what other locations they may have as it relates to the construction of a cell tower. You should also evaluate not only all of the factors listed above but also delve into the specific issues that are relevant to the area where your property is located.
It is advisable to have a company assisting you in making the best decision possible when it comes to having a cell tower lease on your property. That company should work on your behalf to make sure that you receive such things as
1) market rate rent escalations; 2) revenue sharing from the tenants sublet of the property; 3) proper reimbursement of all expenses associated with a cell phone carrier being located on your property; and 4) pointing out the non-monetary concerns that should be addressed based on the location and type of cell tower equipment being installed on your property.