What Are We Seeing In the Market In Q1?
The cell tower lease market has been extremely active in the first quarter of 2016. Below we will share with you what we are seeing in different sectors of the market. The goal is to always keep you well informed. There is a huge imbalance of information when it comes to cell tower leases, and landlords like you deserve to know more. That is why we are here to help.
New Leases & Construction Continue
Verizon has been the most active in new cell tower development. We are currently negotiating many Verizon leases on behalf of property owners like you.
We are also seeing T-Mobile active in new cell tower leasing as well, mostly in in-fill urban areas.
We are seeing third party companies propose new cell towers for AT&T and are hearing about new AT&T cell tower lease opportunities, however we believe they still for the most part have their budget on hold until 2017. Beware of companies approaching you with new AT&T leases requesting two to four year options. This is speculative development, and typically not a real opportunity.
Sprint, for the most part, sits on the sidelines in new cell tower development as they try to make the most of their existing infrastructure.
Lease Renewals & Upgrades = Opportunity
We continue to see a high-volume of American Tower and Crown Castle lease extension requests. In certain markets we are also seeing a high number of AT&T, Sprint, and T-Mobile lease renewals. Lease renewals continue to be a time sensitive and often, once-in-a-lifetime opportunity to significantly increase the rent you receive. It is heart breaking when we speak with property owners and they extended their tenants lease for 25 to 50 years with little to no benefit to the property owner. Make sure not to leave money on the table, and contact a cell tower lease expert today.
Upgrades, especially in urban markets with rooftop installations, continue to be a prime opportunity to increase the tenant’s rent. With some tenants we are often seeing them present the projects requesting “Consent” and not offering any additional consideration to the property owner. These projects have significant value to the tenants and they can translate to increased re-occurring income for property owners like you. Have the projects reviewed by an expert today.
Cell Tower Lease Buyout Market On Fire
With the Fed meeting again this week to discuss raising interest rates, we think many landlords are seeing the writing on the wall – if they want to sell, now is the time. Buyout prices are at an all-time high with low interest rates and over 20 buyers in the market. As interest rates rise, and thereby the cost of capital increases, buyout prices are forecasted to decrease accordingly.
One cell tower lease tenant that we absolutely recommend to consider selling is Sprint. Sprint Stock was downgraded last week to strong sell by analysts Vetr. Sprint shares have fallen 56% in the last two years. Their parent company, Softbank, announced last week that it will split into two companies to protect itself from the negative impact of Sprint’s failing stock.
In summary, Sprint is a disaster and with buyers currently offering to buy over ten years’ worth of rent, on a cell tower lease that might not be around for ten years, this is a strong sell. To get the best deal contact us and we will get you in touch with top buyers in the market. Don’t leave any money on the table in 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).