What determines cell tower lease rates?

by Kelly
(Marin County, CA)

I've been looking all over the internet to find "comps" on cell tower lease rates or some data and i am literally tearing out my hair. What are the main factors that determine price? Is it the number of antennas or is it the square footage that they take up for their equipment?

I have an AT&T lease and I have a Clearwire lease both on the same rooftop in California and the rental rates are pretty far apart, however I can understand because Clearwire has less equipment and fewer antennas. Now T-Mobile is looking to go up on a different building we own and I do not know what a fair price should be.

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Mar 31, 2011
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Leverage
by: Steve

Kelly if you have a great site, and the carriers are limited to where they can put their antennas besides your property, then you can really maximize your deal. If you have a rural property and they can go to any of a dozen sites, then you are lucky to get $500 per month with nothing else.

I saw a negotiation recently with a major carrier where the carrier offered $700 on a renegotiation of an expiring tower lease. The owner told them to remove the tower. The carier came back with a list of 7 comps, actual cell tower sites where the carrier was paying $1,000 per month for ground space. It took about 3 months fighting with the carrier, but the landlord walked away with $2,700 per month and everything else we asked for which was equally important to the rent, because due to the zoning ordinance they had no other choices. And this was not in an NFL city, just a small city in the Southeast with a population of about 25,000.

It's all about understanding what leverage you have in the negotiation.

Mar 19, 2011
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Many factors come into play.
by: Kevin - Tower Genius

There are many factors come into play in determining the value of a cell site lease in a given area. Here are the main areas that drive values:

1) Are there many sites of equal RF propagation and ease of construction in the immediate area?

2) What does the local zoning code state. Does it force carriers to a certain type of property or can they go anywhere?

3) Is the site going to be a main coverage site or is it off loading another site from a capacity standpoint? What are the sites objectives.

It comes down to how much do they need this site in their network and the only way to really evaluate that is from a proper review of the site. Some of the major real estate management companies have set prices by region but many times carriers will avoid such properties if they can because the price might be too high or the terms hard to deal with.

Give us a call we can help to establish the values and we can turn around the review of the site and lease within 48 hours. We know what the wireless carriers are willing to pay and what terms they are willing to negotiate on. You can reach us at 888-313-9750.

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