The excitement of receiving a cell tower lease from a cell tower developer is quickly replaced in many cases once property owners realize that the nice person talking to them doesn’t have their best interests in mind. interests, nor are they interested in selecting the best site from a zoning and coverage perspective, they are just looking at which owner will accept the lowest and worst offer.
There is a dearth of professionalism among tower developers and they are interested in the fact that in today’s bad economy many homeowners are too scared to walk away from a low offer, which is usually in the $500 per month range. with rent increases. ranging between 0% and 10% each 5-year term. They are not surprised when the property owner asks them the simple question of why they would encumber their beautiful piece of land with a tower for that small amount of money. The bottom-feeding parasite…um…the cell tower leasing rep usually smiles and walks across the street or looks for a spot next door, leaving the landlord scratching his head and wondering what went wrong, as now they are forced to search the cell tower for the next 25 years instead of charging you rent.
One of the buzzwords for tower developers is that they can get you a better rental price if you return a “clean lease” to them, meaning a “clean lease” is a cell tower lease that is unmarked, has few or no change, is completely one-sided in favor of the cell tower companies, and that is usually taken advantage of by the property owner. The sales tactic used by most of these tower developers is fear. It’s not illegal, just repellent. It is practiced primarily in the central United States, and now even some of the major carriers are getting away with rental rates that are below fair market value.
Most of these small cell tower development companies have owners or partners who came out of one of the big carriers like AT&T, Verizon Wireless, T-Mobile or Sprint, and are trying to cash in on the cell tower boom. Many of them have friends still working on the inside who give them proprietary information from the inside and are backed by some silent partners or private investors. they are told where the open “search areas” are where carriers need to build a tower, again not public information, and they build some towers as cheap as possible with as many “clean rents” as possible, and change their tower companies and small tower portfolios for their friends were the biggest tower companies, and they walk away with seven figures.
When a tower developer offers you just $500 (or less) per month to encumber your property with a cell tower, and they kick and scream when you tell them you want a piece of the sublease proceeds, you should know they’re making money they hand over the fist on their site, and they’re only paying you a very small portion of what they’re making from all their cellular carrier tenants.
What can a property owner do if approached by a local cell tower developer with a low cost cell tower lease offer? They can tell the representative that if they don’t reconsider their offer, as soon as they leave, they will contact other big tower developers like Crown Castle, SBA, American Tower, or GTP, who are more likely to make a friendly offer. Also, many times the cell tower lease fee will be slightly negotiable, but not by much. Property owners are then faced with the dilemma of hiring an expensive attorney to review the lease for a few thousand dollars that they may not even get, since the tower’s acquisition representative is trying to get the property owner to settle. hurry up and sign the lease.
Last year we negotiated a cell tower lease for an East Coast property owner with a major wireless service provider within a major city at a critical coverage site. The site’s acquisition representative originally offered the landlord $500 for a cell tower land lease, the owner wanted $1,500 but was willing to accept $1,250, but the operator was only willing to go up to $1,000, walked out on the deal, and instead done, he had a tantrum. like a two year old would when he can’t get his way. The purpose of the cell tower site was to cover a 70,000 seat NFL stadium. Instead, the carrier ended up spending nearly $10,000 per home game plus ground rent (nearly $100,000 in 2010) to provide a temporary COW cell on wheels to make sure the venue was adequately covered. Yeah, they spent $100,000 because the leasing rep was haggling over $250. The carrier went back to the landlord this year and the first question they asked was, “We still like your property, are you going to work with a cell tower consultant? Here’s a clean lease.” Well, you can’t fix bullshit, I guess.