The demand for robust and expansive cellular networks is at an all-time high, making cell towers valuable assets for telecommunication companies. If you’re a property owner leasing space for a cell tower, you may be wondering how to maximize your revenue.
Here are 5 tips to help you increase cell tower rents and optimize the value of your property.
Don’t Follow Market Rates:
Don’t try to follow current market rates for cell tower leases as they will lead you down the the wrong path. Understanding that every cell tower site whether it be a proposed new cell tower lease or an existing one you need to focus on that every cell site has its own individual value. Researching comparable deals only lead a property owner down the path of bad deals that other property owners have agreed to.
Know What Equipment Is On Your Property:
Telecommunication companies value sites that offer additional amenities, as it can improve the overall efficiency of their network. Consider investing in infrastructure enhancements that can make your property more attractive. This may include providing backup power sources, upgrading access roads, or installing fiber optic connectivity. By offering a site that meets or exceeds industry standards, you increase the perceived value of your property, giving you leverage to negotiate higher rents.
Structure Lease Terms Correctly:
The terms of the lease agreement play a crucial role in determining your rental income. Work with legal professionals who specialize in telecommunications leases to negotiate favorable terms. Some key factors to consider include the length of the lease, escalation clauses tied to inflation, and the ability to renegotiate rents at specified intervals. Favorable lease terms not only provide a steady income stream but also position you for potential rent increases as the market evolves.
Subtenant Rents:
Co-location involves multiple carriers sharing the same cell tower infrastructure. If your property has the capacity to accommodate multiple carriers, consider exploring co-location agreements. By allowing multiple tenants on your site, you can significantly increase your rental income. Carriers often prefer co-location as it reduces their infrastructure costs and enhances network efficiency. Negotiate terms that benefit both parties and make your property an attractive option for co-location.
Review and Renegotiate:
The telecommunications industry is dynamic, and market conditions can change rapidly. Regularly review your lease agreements and stay informed about industry trends. When the opportunity arises, be proactive in renegotiating lease terms. This could involve adjusting rents based on market rates, extending lease durations, or incorporating new clauses that align with the evolving needs of telecommunication companies. Regular reviews ensure that you are maximizing your revenue in a dynamic and competitive market. Conclusion: Increasing cell tower rents requires a strategic approach that combines market knowledge, property enhancements, and favorable lease negotiations.
By staying informed, investing in site improvements, negotiating wisely, exploring co-location opportunities, and regularly reviewing and renegotiating lease terms, you can optimize your returns and ensure that your property remains a valuable asset.
