As people become more reliant on wireless services, property owners are increasingly being approached to lease their land for cellular site construction. Most landlords will readily accept a “market rate” offer and consider themselves lucky for the extra stipend. The fact of the matter is 90-95% of cell tower lessors are losing out on 200% revenue or more, due to lack of expertise. The fact of the matter is 90-95% of cell tower lessors are losing out on 200% revenue or more, due to lack of expertise.
Current market rates for cellular sites
The US has over 190,000 cell towers generating an average annual revenue of $45,000 for owners. Land assessment specialists reveal actual revenues could be as much as two folds more. Here we’ve collected sample revenues from leasing consultants and property owners across the nation.
ANNUAL REVENUE GENERATED WITH CELL TOWER LEASES
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State
|
Actual
|
Potential
|
T-Mobile
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New Jersey
|
$15,000 - $18,000
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$30,000 - $36,000
|
Los Angeles
|
$15,600
|
$31,200
|
San Diego
|
$16,800
|
$33,600
|
AT&T
| ||
Pennsylvania
|
$9,000
|
$18,000
|
Virginia
|
$6,000
|
$12,000
|
Verizon Wireless
| ||
New Jersey
|
$19,800
|
$39,600
|
Pennsylvania
|
$6,000 - $7,200
|
$12,000 - $14,400
|
Arizona
|
$14,400
|
$28,800
|
Michigan
|
$6,000
|
$12,000
|
Florida
|
$6,000 - $7,200
|
$12,000 - $14,400
|
Washington
|
$14,400
|
$28,800
|
Clearwire
| ||
New Jersey
|
$13,200
|
$26,400
|
Texas
|
$10,800
|
$21,600
|
Metro PCS
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New York
|
$15,600
|
$31,200
|
Large Tower Companies
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Virginia
|
$12,000
|
$24,000
|
Warner Communications
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Missouri
|
$36,000
|
$72,000
|
The numbers are astounding, and the loss is even greater over 25 years. Our message to potential landlords who are reading this to get revenue figures: market comparison is not the way to go.
Factors that influence cell tower lease rates
Today’s tower leasing rates depend on a number of important factors. Here are some questions to ask when assessing leasing revenue:
1. Can acquisition companies avoid construction fees?
In the case of lease renewals, extensions, and antenna add-ons where new tower construction fees can be avoided, rental rates are higher.
2. Is the area densely populated with heavy traffic?
Dense area makes your location prime for providing wireless service and more valuable to tower companies.
3. Are there alternatives?
A tower acquisitionist is more likely to shop around for lowest bids when faced with other options.
Terms of Agreement affects leasing revenue
Failure to decipher the leasing contract is one of the biggest mistakes for any property owner.
With a contract that spans 20-30 years, the slightest change in terms of agreement will affect revenue remarkably. And when profit figures are a fraction of a million, relying on a telecom leasing specialist in cell tower leases sector is worth the nominal fee.
Strategize to earn more
Don’t get into a poorly negotiated long-term contract you’ll have a hard time getting out of. It’s understandable that owners don’t want to risk losing a leasing deal, but that doesn’t mean they must accept lowballers.
Increasing media exposure has landlords stepping up their game. In response to this, there have emerged a number of independent leasing companies like Lease Advisors, which provide expert consulting to potential and current lease holders.
Most importantly, we hope this call to action will prompt national firms to practice better business ethics and offer all contributors, including land lessors, a fair share of the market.