Cell Tower Lease Rates Continue To Rise!
The bull market of rising rents in 2015 charges forward into 2016! As a cell tower landlord advocate, Airwave Advisors® is on a mission! We have created a proprietary database that tracks thousands of cell tower locations, rents, and buyout prices. Our goal is to empower property owners like you and to contribute to the wealth of the landlord community as a whole. With that in mind, here are four things to look out for regarding cell tower lease rates in 2016:
1. Your Cell Tower Lease Is Worth More Than They Are Telling You
Cell tower lease rates are rising, the lease renewal market is on fire, and your cell tower lease is worth more now than ever. We have dozens of success stories of doubling and even tripling rents for landlords like you – who for far too long have been underpaid. Cell tower lease rates in 2016 do not compare to rents in 2015, and they especially do not compare to rents from the 1980’s and 1990’s. Still, we see representatives for major carriers such as AT&T, Verizon, T-Mobile, and Sprint, trying to persuade property owners to keep rent the same, or even the ridiculous discussion – a rent reduction.
2. Why You Shouldn’t Agree To A Term Escalator
We can all agree that your cell tower lease rent should escalate (even if the carrier would prefer it to stay the same). The primary reason behind built in increases in rent, is for the rent to adjust with, or exceed, the uncontrollable outside influence on the value of your rent – inflation.
Often we are seeing tower companies such as Crown Castle, SBA, and major carriers, propose term escalators – a rent escalation schedule that increases every five years. This is a horrible proposition for the property owner for two major reasons: (i) inflation does not wait five years for you. You are affected by inflation annually. and (ii) by agreeing to a term escalator you are ultimately agreeing to an increase of less money due to the compounding effect of rent increases year after year.
3. Rural Cell Tower Lease Rates vs. Urban Cell Tower Lease Rates
We continue to see a wide spread between rural cell tower lease rates and urban markets. We often receive a call asking us, “what is the average cell tower lease rate?”. If we answered that question it would be a disservice to you. Cell tower lease rates in 2016, just like home prices in 2016, vary greatly from region to region. There is no cookie cutter rent, or lease package, every property is unique as well as the value for every cell tower lease. To truly capture the value of your lease, contact Airwave Advisors to have your lease reviewed.
4. Purchase Prices Remain At All Time High, But For How Long?
Purchase prices for cell tower leases, also known as cell tower lease buyouts, remain at an all-time high. The elephant in the room within the buyout industry is – but for how long?
Last year we saw a long standing cell tower lease buyout company go completely under. We started receiving calls from their management and employees looking for work. The market has become ultra-competitive and something went horribly wrong over there. Can prices remain high, stressing buyout companies, or will there be an adjustment?
All indicators point to an adjustment. As the cost-of-capital increases with anticipated gradual increases by the Fed throughout 2016, we anticipate the buyout prices to decrease. For this reason, we believe if you have considered selling your cell tower lease, now is the time to contact Airwave Advisors to discuss securing top dollar for your transaction!
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About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).