We are thirty days into 2017 and all we see and hear is progress. AT&T, Verizon, and Crown Castle are all building new cell towers. Occasionally new cell tower construction from T-Mobile will pop up on the radar, however, the market appears to continually be dominated by the steady growth of AT&T and Verizon.
New Cell Tower Lease Rates & Escalators
Rates continue to increase in urban markets and remain flat in rural areas. Verizon continues to propose new leases with annual rent escalators of 2%, rates that will not keep up with inflation. One source states that inflation for 2017 is forecasted to come in around 2.4%. You never want to agree to a rent escalator that will not keep pace with inflation. The value of the rent you receive should keep pace, or exceed annual inflation.
Increasing Cell Tower Lease Rates With Renewals
Many cell tower leases were signed in the 1990’s and are now up for renewal. Proceed with caution and consult a cell tower lease expert to ensure you are not leaving money on the table. We have seen many offers from large tower companies just offering signing bonuses, with no proposed increase in rent. In a few unfortunate examples we saw landlord’s agree to renew leases for over fifty more years for a one-time check of $500.00. The amount of money that was left on the table in those scenarios is staggering!
Cell Tower Lease Buy-out Prices
For now cell tower lease buyout prices remain high. There is concern however with the forecasted three hikes in the federal interest rate to take place in 2017. In the event the Fed continues to hike the interest rate the cost of capital will increase and buyers will adjust paying less for cell tower leases.
On a separate note, we have already noticed a pull back from buyers on pricing Sprint leases to purchase. This is a great concern that Sprint will be acquired in the near future and the future of their network, and the associated cell tower leases, will be in jeopardy.
How Can We Help?
We are currently working on many new cell tower leases, lease renewals, cell tower lease buyouts, and even expert witness work. With over thirty-five posted Success Stories, our results speak volumes to our ability to help you with your cell tower lease.
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