Lease land for cellular tower - Posted by Greg(PA)

Real Estate Investing Real Estate Law
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Posted by Ken Schmidt on November 19, 2004 at 08:16:53:

I absolutely disagree with this statement. Having performed site acquisition (finding land for towers)for most of the major carriers and having negotiated hundreds of wireless leases myself, I can tell you that going to a commercial broker without specific experience with wireless leases is one sure way to make sure you don’t get a tower on your property and that you get to look at the tower next door.

If a landowner mentioned that he had a commercial broker involved in negotiating a cell tower lease, I would have run. The main reason is that those commercial brokers who have never negotiated a cell tower lease attempt to modify the template lease with their own standard commercial lease language that more often than not is not relevant or destroys the deal.

Additionally, every property is different in terms of value to a cell tower company. If the broker does not have specific knowledge of wireless, they will often times either ask for way too much, thereby killing a good deal or leave money on the table.

If you want to use a broker to negotiate a lease- make sure he has negotiated over 10 cell tower leases and is familiar with the terminology and the technology. Always use an attorney- one that has wireless experience as well.

There are many good sites on cell tower lease negotiations online- do a google search for “Cell tower lease” and check out the attorneys’ who have posted good advice. Then find an expert who deals with these leases weekly- whether it is a broker or a real estate attorney.

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Lease land for cellular tower - Posted by Greg¶

Posted by Greg¶ on November 05, 2004 at 17:36:53:

My mom’s house is on a piece of land on the edge of a river valley. Wanting some extra income, she’s talked to someone about having a cell tower (or some kind of tower) put up. A woman came out the other day and walked around with a GPS and seemed pretty excited. I want to get fully-informed on this before she signs anything.
Does anyone here own land that they’re leasing to cellular companies? Have any personal experiences you can share? Failing that, are there any internet resources where I can learn more? What about putting up the tower yourself and renting it out?

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Thanks to all! - Posted by Greg¶

Posted by Greg¶ on November 07, 2004 at 21:52:09:

I’m back from getting the place buttoned down for winter (or trying to). Thank you all for your helpful comments!

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Re: Lease land for cellular tower - Posted by Robert

Posted by Robert on November 06, 2004 at 10:18:48:

I built cell towers in and around Texas during the boom years. If you have not been in the commercial construction industry for atleast 15 years I would highly recommend that you let the wireless provider worry about it. Too many things can go wrong - pier holes collapse, anchor bolts set too high, too low, wrong orientation, the crane breaks in the middle of erecting the tower, etc.

You could make a ton of money building it but to me it’s not worth the liability. The service provider will already have companies they contract with to build the tower.

If you do proceed with it take all of the suggestions from the previous post. Include everything you can dream of in the lease and then negotiate from there.

Also be sure they have a standard maintenace schedule for your area - someone comes out to check on the beacon at the top at least monthly - FAA regulations that it stay working, that the fencing around the tower stays intact or is immediately repaired, etc.

It can be a great monthly income for you but be sure to get all of the appropriate representation on your side before proceeding.

Good luck and let us know how you make out.

  • Rob
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Re: Lease land for cellular tower - Posted by njdave

Posted by njdave on November 06, 2004 at 06:18:13:

My experience was with a large, cellular provider.
A birddog approached my father who owned the largest hunk of land in an affluent area in Monmouth County which happened to have the highest elevation in an area between two rivers. My Dad wanted no part of it, but I pressed him to at least explore the opportunity.
The birdog was excited enough to write out an agreement that would allow his parent company conduct some tests… and paid $1000 for the opportunity. About a week later, the Company sent out a truck that was equipped with a telescoping, tempory antenna, and conducted tests by checking the signal strength from many points in the intended service area. Following the results of the tests… they made their initial offer to lease a section of land to erect their antennae and construct a small support building, and a 400’ driveway since they needed unlimited access from the street to the antenna, located in a wooded section to the rear of the property. Over the course of a couple of weeks, here is what I was able to negotiate:

To appease my Dad and the neighbors, the tower was to be disquised as an evergreen tree. The support building was to be so constructed that it looked like a child’s playhouse. The 400’ driveway was to be paved with cobblestones and be nicely landscaped.

The Company would pay $1500 per month net (plus any additional real estate taxes or homeowners insurance imposed as a result of the improvements). The lease was for 10 years, the Company held an option to renew for two, additional ten year terms.

All legal fees associated with the drafting of the lease, and identification of the specific parcel property; and all costs to seek a variance from current zoning were paid by the Company.

A landscaping and landscaping maintenance package (lawn service, plantings, mulchings, etc., snowplowing) for the entire property would be paid by the Company for the life of the lease.

And, the Company would pay an option fee of $5,000 or $10,000 just for the right to proceed with the variance application, whether it was successful, or if it failed. I’m sure I’m forgetting some things… but the ‘wish list’ was unreal. Oh. And free cell service for the entire family for the life of the lease.

Was I greedy? I knew that in addition to simply providing cell service, the Company had the ability to lease out space on the antenna to other companies for other wireless services… so the antenna was a money making machine for them.

The Company reps gathered to present the Lease Agreement for signatures. They brought a check. Up until this time, I was the pointman, my Dad hadn’t entered into the negotiations… Then my father essentially killed the deal by demanding a clause such that the Company would agree to pay all medical costs for anyone in the service area who became ill due to microwave transmissions…

Though they didn’t immediately object… they did send a letter about a week later thanking my father, but that the site no longer met their needs.

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Re: Lease land for cellular tower - Posted by David Krulac

Posted by David Krulac on November 05, 2004 at 22:24:15:

Mike’s right on. There are a bunch of issues including zoning, some areas don’t permit cell towers.
A recent Pa. court decision says cell towers have to pay real estate taxes. Some areas have other building issues. One place I know would only allow a 100’ tower at a location where if it fell it would stay on the property it was built on. One location I know of gets $1,200 a month on a 5 year lease. Another gets $1,000 on a 10 year lease and one gets $800 on a 12 year lease. Also some areas are requiring that competing companies put their antennas on the same tower to stop tower proliferation.

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Re: Lease land for cellular tower - Posted by Mike W

Posted by Mike W on November 05, 2004 at 22:16:06:

Before you sign a 60 page lease with a large corporation, the Internet is the WRONG place to get advice. Find a local Commercial Broker (preferably CCIM) to negotiate on YOUR behalf. You may consider a real estate attorney to back you up.

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Re: Lease land for cell tower - Posted by Ken Schmidt

Posted by Ken Schmidt on November 19, 2004 at 08:26:40:

Rob is correct- I have personally developed and owned communication towers and for the uninitiated, it can be a pitfall. The industry standard is that towers need 1.7 (give or take) Broadband Equivalent tenants (fancy way for saying cell phone companies) to make the tower profitable. While many towers have more than 4 tenants (very profitable) many have only one. Without a more detailed analysis of your location, you are running a risk that the tower will actually lose money monthly.

The other problem is that upon suggesting that you would like to build the tower, the carrier that approached you stands a 75% chance of walking next door.

The only time I would suggest building and managing the tower is if there is the potential to create a monopoly of a tower- for example if your property is the only property within 3 miles that a tower can be built on.

Feel free to visit my webpage on towers for more details- www.steelintheair.com

Thanks,

Ken

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Re: Lease land for cellular tower - Posted by Randy (SD)

Posted by Randy (SD) on November 06, 2004 at 09:39:16:

No doubt the medical costs “contingency” killed this deal, I was operations manager for cellular one and worked for Verizon wireless for seven years after that and everything in your lease agreement was acceptable-until you get to the medical costs. Too bad in this could have been a nice cash cow for your father.