What are the pros and cons of having a cell tower lease? This is a common question we receive here at Airwave Advisors. As the nation’s leading cell tower lease experts, we are here to help!
Pros of having a cell tower lease
- Re-occurring monthly or annual income (rent).
Do you currently have land that is vacant, or is not being used to generate income? If so, having a cell tower lease on your property could be an excellent opportunity for you to generate some passive income. Keep in mind the cell tower developers must contact you, and we do not recommend you reach out to developers in the reverse. If you would like to learn more about getting a cell tower on your property, check out our article “Cell Tower Locations | 5 Things You Need To Know“.
- The ability to sell the cell tower lease rent for a lump sum cell tower lease buyout payment.
Instead of receiving monthly or annual rent checks, some property owners prefer to sell the rent stream for a lump sum payment. The transaction can be structured a number of different ways from selling the property altogether, granting an easement to the buyer, or just assigning the lease to the buyer. To learn more about cell tower lease buyouts check out our article “Cell Tower Lease Buyouts | 7 Things You Need To Know“
- Increased property value due to the occupancy of an income producing tenant (case by case basis).
This statement is on a case by case basis. Generally when you add an income producing tenant to the property it therefor increases the value of the property. There are times when the location of a cell tower can decrease property value, as discussed in more detail below.
Cons of having a cell tower lease
- The area occupied by the cell tower tenant may remove your ability to develop the land for 20 to 30 years.
Do you believe there will be any opportunity to develop the property during the term of the cell tower lease (typically 20 to 30 years)? If so, a cell tower lease may be a bad idea. You would need to negotiate in very favorable redevelopment language into the cell tower lease to get comfortable. Without redevelopment language, you risk being held hostage by your cell tower tenant come time to redevelop the property.
- Increased foot and vehicular traffic by contractors on your property on a monthly basis (as needed to service the tower).
This is a particular concern with cell towers adjacent to residences. Most people do not like hearing or seeing service trucks drive through their property monthly. If that is the case with you, then you may want to second guess having a cell tower tenant as a “close neighbor” to your residence.
- Decrease in property value if installed in close proximity to a residence.
Many people do not want to buy homes adjacent to a cell tower due to the perceived risk of health issues. There is also the aesthetic concern, the eye sore of having to look at the cell tower daily. Come time to sale the property, if the property is priced correctly it will typically sell. Regardless of the proximity of the cell tower to the residence.
Overall the pros typically outweigh the cons and there is a clear advantage to pursuing a cell tower lease opportunity.
Always make sure to have the nation’s leading cell tower lease experts, Airwave Advisors, review your cell tower lease opportunity to help you weigh pros and cons specific to your situation.
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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).