Getting an accurate cell tower valuation of what your cell tower should be worth or the value of your rooftop cell site is not as easy as talking to a real estate appraiser. Most real estate appraisers know nothing about vertical real estate. There are no databases of cell tower lease rates from surrounding towers or cell sites. That information is site-specific and proprietary, and real estate appraisers don’t have access to it. In fact, even seasoned real estate attorneys have little or no idea what the appropriate asset values ​​for cell towers are once the steel is in the air. This is the basic cell tower valuation formula we use to determine rental rates for owners in the US and Canada.

High demand for coverage + Low supply of available cell sites = Greater profitability for the lessor.

To determine the value of a particular cell tower site, it is crucial to look at how that specific cell site links to the carrier’s wireless network. Since each wireless carrier, while using the same monopole or rooftop tower locations, has different criteria for meeting its radio frequency and coverage goals, just as each set of frequencies offers various levels of signal penetration within buildings and coverage areas, so the values ​​of the leases will also differ in most cases, when taking into account other aspects such as zoning, land use, topography and supply of land. alternative locations. High demand for operators with a low supply of available sites that can be leased equals a higher rental price for the lessor. We’ve seen major wireless carriers pay as little as $100 per year for a cell tower (yes, $8.33/mo) all the way up to $14,000 per month for a single cell site.

Typical questions and answers about cell site assessment…

Q: Our rooftop cell site has multiple operators that lease space. Technicians are constantly in and out of our building, and some of these rooftop antenna leases have changed hands more than once. I have no idea what infrastructure we have up there, and if we’re getting the right amount of rent, it seems to me that they keep adding more equipment?

HAS: This is a typical question we hear every week. Our answer may surprise you, but we’ve found that at least 30% of all rooftop cell sites are not honoring the terms of their leases, and as a result, landlords are not being adequately compensated. We have also encountered many problems with cell tower leases, although not as frequent or severe as the problems seen with rooftop antenna sites that we have seen in the United States and Canada. We estimate that approximately a quarter of cell phone leases are incorrectly valued for this reason. When there is some deviation in the work in favor of the lessor, the latter obtains an advantageous position from the negotiating point of view. A properly performed cell tower audit or rooftop cell site audit can significantly affect the future value of a wireless lease to the lessor and impact the actual value of the lease to their carrier.

Q: You may be wondering what your monthly rental rate should be on your tower or rooftop site if the carrier is trying to expand or upgrade to 4G LTE antennas. Do you determine the square footage upgrade value of the expansion in proportion to the area they currently occupy, or do you count the number of antennas you are adding?

HAS: There is no database of cell site lease fees, and cell phone carriers are not comfortable with publicly disclosing the rent they are paying on a given cell site lease. If you look hard enough, you can see what municipalities get from carriers like Verizon Wireless, T-Mobile, US Cellular, Metro PCS, and AT&T because the towns publish the information. Occasionally, when a landlord plays hardball with a carrier in a negotiation, his real estate department or his attorneys will release a short list of addresses of properties where they’re paying $1,000 a month, for example. But these lists are never accurate or complete if the carrier provides them to owners to sign on the dotted line. The value of the LTE upgrade or 4G upgrades done primarily by Verizon and AT&T can be worth an extra few hundred dollars to owners. However, with site expansions and ALL cell tower leases, lease rates are site specific and should be reviewed on a site by site basis. The determining factor is what they are trying to cover, and the availability of alternative sites willing to accept less money per month than you, and the cost of developing that alternative site. It’s about leverage.

what If my cell tower is so important to the carrier’s wireless network, and they recently added more equipment and raised the rent when they signed the LTE lease amendment, why then are they trying to lower the monthly rent just a few months later?

HAS. Your cell site is probably very important to the carrier’s network, but they’ll never support you because you probably don’t speak telecommunications. Would you think that multi-billion dollar corporations had the foresight to plan 5 or 10 years in advance when they built a cell tower?

Q: What about this Right of First Refusal (ROFR) clause they’re trying to get me to sign? Does that affect the value of the tower in the future?

HAS: Since the lease of a cell site is a commodity and is bought and sold like any other commodity. On Wall Street, when someone wants to buy a Right, they pay money for that option to make the purchase. When you give up the right of first refusal, you are essentially giving up your right to allow the free market to determine the value of your cell tower rental revenue stream. If you’re going to agree to that, shouldn’t it be worth something? Do you think that if a lease buyout company sees that Carrier X has a ROFR on your lease, they will make you an aggressive offer? Why should they? The aircraft carrier with the ROFR just needs to match it.

So what is the real value of your cell tower asset?

Homeowners in the United States, what is the fair market value of your Verizon Wireless, AT&T Wireless, Alltel, Cingular, Clearwire, LightSquared, West Central Wireless, Cricket, Alaska Communications, Cox Communications, GCI Communications, Cellular One, Frontier Wireless , USA Cellular Lease, MetroPCS or Sprint Nextel? Canadian owners, how much is your Aliant Mobility, MTS Mobility, Bell Mobility, Mike (Telus Mobility), Fido (Microcell), Mobilicity, PC Mobile, Primus Canada Wireless, Public Mobile, Rogers Wireless, SaskTel Mobility, Telus Mobility, WIND Mobile rooftop or tower lease rate valued at? How much is it worth if they want to expand the Premise and add an upgraded set of antennas? Good… That’s the sixty-four thousand dollar question, isn’t it?

And don’t expect cell phone carriers to provide you with the answers or any kind of guidance regarding site-specific tower or rooftop leasing values. Landlords will never know the true values ​​of their cell site leases until they have a comprehensive cell tower lease audit.

Leave a comment

Your email address will not be published. Required fields are marked *