Steel in the Air has served thousands of property owners across the U.S. with cellular lease negotiations and asset valuation. The highest lease rates that we obtain for our clients occur during renegotiations for leases that are due to expire in the near future (five years). Reviewing the value of an expiring lease is a fairly complex task involving a number of factors that influence how much tower companies and wireless carriers will pay to continue the lease after the expiration date.
When tower companies first develop a tower or cell site, they typically have other parcels that they can consider in lieu of the subject parcel. The difference with expiring leases is that the companies have already invested a significant amount, including the tower itself as well as antennas and ground equipment. In addition, specific towers are connected with and affect one another, so changing one can result in significant changes throughout the network.
Our consultation starts by reviewing the cell site’s intended purpose, including its coverage and capacity. Coverage can be described as signal strength (eg: whether your phone has 1 or 5 bars), and capacity as the ability of multiple subscribers to tap that signal. Capacity deficiencies happen when signal strength is strong but there is not enough bandwidth for all subscribers to access the network at the same time.
Consumers demand strong cellular networks that are seamless, reliable and can handle heavy data transfers, in addition to voice connections. Successful cellular networks require sufficient capacity and coverage to handle the needs of particular subscriber bases. It’s a bit complicated because the demand of each market varies, subsequently affecting the engineering requirements of specific cell sites. Steel in the Air tracks wireless carriers’ infrastructure deployment plans and understands what their particular needs are in specific geographical locations. When we evaluate specific cell towers, we can determine how valuable their are to the carriers’ network as a whole, thereby determining with great accuracy the rent and escalation amounts they are willing to pay.
In addition to the cost of relocation, municipal zoning ordinances can also be a factor in determining how much a tower owner will pay to extend an existing cellular lease. Most municipalities only allow a certain number of towers; however, if it’s in their best interests, tower companies will promise to not only remove existing towers, but replace them with more aesthetically pleasing ones, such as Stealth Towers. Alternatively, they might look to lease from the municipality directly in order to avoid the zoning process altogether.
Depending on coverage and capacity requirements, rooftops, water towers or even telephone poles may be used to replace existing cell towers. Evaluating the wireless carriers and/ or tower companies’ infrastructure goals helps us to understand whether or not they might consider splitting up their cell sites into smaller cell sites.
Then, we review our lease rates database to determine the average lease rate for new towers or new rooftop sites is in the area surrounding the subject tower. Because we have thousands of lease rate data points across the U.S., we can tell our clients, with a good degree of accuracy, what the tower company or carrier would offer to pay to lease land on an adjacent property or on a neighboring rooftop or tower.
We independently research the identity of these collocators (many of whom are already in our database) to assess their use of the site. We evaluate the equipment and antennas on the cell site to figure out how much revenue the tower company is making from the operation of the tower.
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