Pros and Cons of Having A Cell Tower on Your Property

Have you been approached to place a cell tower on your property, or have you recently acquired a property that has a cell tower on it?   Are you curious about the potential impact of a cell tower on your property in the future? Here at Steel in the Air we have assisted around 3,500 clients across the US since we started this business in 2004.  We have identified the top 5 pros and the top 5 cons about having a cell tower on your property.

Top 5 Reasons to Have a Cell Tower on Your Property

  • Revenue.  The average proposal for a new cell tower lease in our database for 2018-2019 was $1050/mo.  Over the course of a standard 25-year lease, this would result in cumulative income to the landowner of $459,386.   If a new tower has to be added to the area, it is probably better to be the landowner receiving revenue from it than being on a neighboring property and having to look at it while receiving nothing.
  • Highest and Best Use.  This is an appraisal term which means that it is rare that landowners to receive more income from other non-cell tower uses on the same property.  The typical land lease is 2,500 to 5,000 square feet. In many cases, there aren’t other uses that would pay the same lease rate for that limited space.  
  • Credit Grade Tenants.   The companies leasing the space on your property are credit grade tenants and the default rate on cell tower leases is very low.  
  • Low Maintenance Tenants.  Unlike commercial tenants or residential tenants, there is no maintenance burden (or very little) when it comes to cell tower tenants. They maintain their own lease area.  They insure themselves. They pay for their own infrastructure and buildout. 
  • Transferable Asset.  In most cases, the lease can be sold in the future.  Lease buyout companies typically pay 15 times the annual lease rate or more for a lease buyout.  Where else can you sell a lease for that multiple of annual income?  

 

Top 5 Reasons to Not Have a Cell Tower on Your Property

  • Long Term Lease Agreement.  Most cell tower lease agreements are 25 years or longer.  These lease agreements almost never give the landowner the right to terminate while the tenant is allowed to terminate with limited notice.   This impacts your future development potential on the property.  
  • Difficult to Move.  Once a tower is constructed, it is costly to move.  If you need that land again in the future, you might think it would be easy to relocate the tower.  In that regard, you would be wrong. We have assisted clients in the past who determine that they wish the tower was not on the property and want to move it.  Towers typically cost $300,000 bare minimum to move assuming the tenant will even consider relocation.  
  • Aesthetics.  Towers aren’t attractive and they can have a negative impact on the remainder of the property especially in residential areas.  Some of our clients in the past have received complaints from their tenants about the presence of a tower on the property. Some prospective tenants won’t rent from a landowner with a tower on the property due to perceived health risks.  
  • Potential to Disturb Neighbors.  When a new tower is proposed, there will almost always be people that are upset.  The industry calls them NIMBYs- Not In My Back Yard. In some cases, the neighboring property owners will even go so far as picketing the landowner considering a tower.  On more than one occasion, we have had a client contact us after signing a new lease to if and how they can get out of the lease due to significant resident opposition to the tower.  While these are typically church or school clients, there occasions where even private landowners receive opposition.  
  • Frequent Calls and Solicitations.  While there may be no maintenance or other obligation on the landowner’s behalf towards the tower, that doesn’t mean that the landowner won’t be contacted frequently.  Some of our clients are contacted on a weekly basis about their tower leases. These requests range from modification requests, to renegotiation requests, to requests to add equipment on the tower, to requests to extend the lease or request to buy the lease.  And it’s not just from the company leasing the property but other third-party companies as well. 

 

If You Need Help with A Cell Tower Lease Proposal- Call Us.

If you have been approached by a company to put a tower on your property, please call us.  We can answer your questions about having a cell tower on your property and help you understand its specific impact on you.  All before you spend a dime on our services. We will also look at the proposed lease rate and other fiscal terms and let you know whether we can help you improve the lease.   Our quotes are free as are the initial phone call, so call us. You don’t have anything to lose and we can assure you that you will leave the call with more information than you had before you reached out.   

 

If you are looking for help getting a cell tower on your property, that’s nothing something we can help with.  However, you can submit your property directly to tower companies and wireless carriers for consideration

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