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Cell Tower Rent (The Sleight of Hand)

Tower Lease 101 > Rent: The Sleight of Hand

Cell Tower Land Rental Rate

When a Site Acquisition Specialist representing a wireless carrier approaches a property owner with an offer to place a cell tower on their property, most are fixated on the amount of rent they will get for the tower. This is the first topic of discussion practically all landlords raise with us. They want to know if they can get more rent than what is offered. Wireless carriers, after leasing tens of thousands of cell towers nationwide, know this about property owners. So they are very calculating as to how they approach property owners with the offers. We agree that rent is an important factor in all tower agreements, but we never let it distract us from other very important terms that will have contractual and property rights implications impacting our clients’ future income or how they use their land in the future. Terabonne’s team consists of experts who have worked as employees of wireless carriers designing and developing cell sites since 1995. We know all the tactics. We’ve designed, leased, and zoned thousands of those mobile cell towers. We understand the operational requirements and use this knowledge to negotiate the best terms for our clients, beyond merely negotiating rental rates alone.

How Your Land Qualified For A Cell Tower

For a property to qualify as a candidate on which to build a cell tower, dozens of criteria must be met. In the early stage, the property must be within the Search Rings meeting RF engineering requirements. If your site meets the location requirement, there usually are about a dozen other properties that can be identified within the same search radius. Additional criteria are placed to assure that your property can pass zoning conditions, including zoning designations (agriculture, commercial, industrial), size of your property, setback from property boundaries, zoning code, fire, police, environmental, etc. There will be historical preservation reviews and environmental reporting on the property. Then the project will require a construction permit where additional restrictions are placed on the project. Any of these factors can terminate a project if conditions are not met or not managed properly. All this is before any discussions on rental arrangement occur with wireless carriers.

Propagation Model Predicts Coverage Signal Strengths Based On Engineering Parameters

Cell Phone Tower Rent - What Questions to Ask

Carriers know that rent is a priority for property owners and will negotiate it while distracting the landlord on all the other terms. It is good to have a lot of questions: Why are cell tower leases 30 pages long? What property rights am I handing over to the wireless carrier? What limits can I place to protect my property? What limits have the carrier placed on me? Who have I allowed to access my property? What happens if someone gets hurt on my land while working on the cell tower? What insurance coverage is required? Are there environmental hazards and if so, what are they? What if the carrier assigns the cell tower project to a lesser-funded company that struggles to pay rent? All these issues are only a portion of what is covered in a wireless agreement. Our advice to property owners is not to focus only on cell tower rent rates alone as you may risk losing out on the rest of the terms, particularly involving other financial opportunities other than rent. Our second advice is not to focus on the lease at the start of the project until the details of the project is understood. Just like purchasing a house – before negotiating the purchase price, it is important to understand the size, conditions, amenities, quality, and structure of the house first. Terabonne is skilled and proficient in wireless engineering, tower lease negotiations, and everything in between. Our goal is to take on the heavy lifting for our clients and get you the most out of your cell tower and rooftop leases.

Renting Ground Space for Cell Phone Towers

Cell tower land rentals rates tend to be the most expensive space when calculating based on a per-square-foot basis. However, tower agreements come with greater intrusion and risks on the property than normal commercial arrangements, so we never use per-square-foot as the rental calculation basis. For example, the negotiated space is sensitive to the tower design, number of wireless carriers, the rental income, and any royalties the property owner is to derive from future revenues. The tower agreement also defines the access easement and utility easement outside of the exclusive cell tower space to be operated by the wireless carriers. Without restrictions and conditions placed on the wireless carriers’ rights, property owners will discover years later that it will be very hard, if not impossible, to exert property rights against these wireless carriers when the terms were not negotiated early on. Vehicular traffic, parking, turn around space, weed control, fire buffers, defensible space for fires, road erosion, tower expansions, property damage, interference, open gates, sound pollution, site aesthetics, technology upgrades, garbage accumulation, 2:00 AM site construction activities, etc. are all examples of areas that we anticipate and negotiate at the start to the benefit of our property owner clients. At Terabonne, we do not limit ourselves to negotiating a single term in the tower agreement. Our expertise dictates that we negotiate the entire tower agreement, not just rent amounts alone.  This is the reason why many lawyers and law firms retain Terabonne to handle all cell tower negotiations for themselves, or their clients.  People who only see the wireless world from the pages of a lease can easily misunderstand the depth required to navigate this technology lease correctly. 

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A ROFR grants the tower owner the right to match an offer by some third party who makes an offer to purchase your lease that you accept.

Crown Castle, American Tower ATC, SBA Towers are the “Big Three” tower companies.

Attorneys retained by wireless carriers authorized to review legal terms but never allowed to negotiate financial nor technical terms of the lease because they lack the technincal skills.

A person who specializes in land use matters well knowledgeable in its jurisdictional requirements.

A person hired by the wireless carrier to contact property owners to discuss lease terms. This role has evolved to be landlord facing rather than lease negotiations.

Geographical areas depicted in a circle (ring) drawn by radio frequency (RF) engineers defining the areas requiring new cell towers and technical parameters surrounding such designs.

Companies who build towers and lease back to wireless carriers.  These companies almost always receive Search Rings from wireless carriers defining where carriers need towers to be built.

Radio Frequency engineers who specialize in the radio wave propagation. These are the engineers to define cell tower locations. 

Companies that purchase cell tower leases with the purpose of repackaging (aggregating) them in a larger portfolio and selling them for a profit at a later time.