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Q and A cell tower assessment

Getting an accurate appraisal of the value of your cell phone tower or rooftop cell site is not as easy as talking to a real estate appraiser. Most real estate appraisers don’t know anything about vertical real estate. There are no databases on cell tower rental rates for towers or surrounding cell sites. This information is site specific and proprietary, and property appraisers do not have access to it. In fact, even seasoned real estate lawyers have little or no idea of ​​the proper value of cell phone tower assets once the steel is in the air. Here is the basic cell tower valuation formula we use to determine rental rates for homeowners in the United States and Canada.

High demand for coverage + low supply of available cell sites = higher owner profitability.

Analysis of how that specific cell site relates to the operator’s wireless network is crucial in determining the value of a particular cell tower site. Since each wireless operator, despite using the same rooftop or monopole tower locations, has different criteria for meeting their radio frequency and coverage goals, just as each set of frequencies offers different levels of radio penetration. signal in buildings and coverage areas, therefore lease values ​​will also differ in most cases, when considering other aspects such as zoning, land use, topography and l ‘offer of alternative locations. A high demand for carriers with a low supply of available sites that can be rented equates to a higher rental price for the owner. We have seen large wireless carriers paying as little as $ 100 per year for a cell phone tower (yes $ 8.33 / month) up to $ 14,000 per month for a single cell site.

Typical Questions and Answers on Cell Site Assessment …

Question: Our rooftop cell site has rental space from multiple carriers. Technicians are constantly coming in and out of our building, and some of those rooftop antenna leases have changed hands more than once. I have no idea what infrastructure we have up there, what if we get the right rental amount because it looks to me like they keep adding more equipment?

A: It’s a typical question we hear every week. Our answer may surprise you, but we have found that at least 30% of all rooftop cell sites are not in compliance with the terms of their rental contracts and therefore landlords are not adequately compensated. . We have also seen many issues with cell phone tower leases, although not as frequent or severe as the issues with rooftop antenna sites that we have seen in the United States and Canada. We estimate that the values ​​of about a quarter of cell leases are misjudged for this reason. When a gap is present on the site in favor of the owner, the latter acquires an advantageous position from the point of view of negotiation. A properly performed cell tower or cell site rooftop audit can have a significant impact on the future value of a wireless lease to the landlord and impact the actual value of your operator lease.

Question: You may be wondering what your monthly rental rate should be on your tower or rooftop site if the operator is trying to expand or switch to 4G LTE antennas? Do you determine the value of the upgrade relative to the square footage of the expansion in proportion to the square footage they currently occupy, or do you count the number of antennas they add?

A: There is no database on cell site rental rates. Additionally, mobile operators are uncomfortable with publicly disclosing the rent they are paying for a given cell site lease. If you look closely enough, you can see what municipalities are getting from carriers like Verizon Wireless, T-Mobile, US Cellular, Metro PCS, and AT&T as cities release the information. Sometimes when a landlord plays hard with a carrier in a negotiation, their real estate department or attorneys will disclose a short list of property addresses where they pay $ 1,000 a month, for example. But these lists are never exact and are not complete if the carrier provides them to the owners for you to sign on the dotted line. The value of the LTE upgrade or 4G upgrades that are primarily done by Verizon and AT&T can be worth a few hundred dollars more for owners. However, with site extensions and ALL cell phone tower leases, rental rates are site specific and should be reviewed site by site. The determining factor is what they are trying to cover, and the availability of alternative sites willing to take less money per month than you, and the cost of developing that alternative site. It’s all about leverage.

Q. If my cell tower is so important to the carrier’s wireless network, and they recently added more equipment and raised the rent when they signed the LTE lease rider, then why are they trying to lower the monthly rent a few months later?

A. Your cell site is probably very important to the operator’s network, but the operator will never admit it to you because you are unlikely to speak Telecom. You would think that multi-billion dollar corporations had the foresight to plan 5 or 10 years in advance when they built a cell phone tower?

Question: What about that right of first refusal (ROFR) clause that they are trying to get you to sign? Does this affect the value of the tower in the future?

A: Since a cell site lease is a commodity and is bought and sold like any other commodity. On Wall Street, when someone wants to buy a right, they pay money for that option in order to make the purchase. When you give up the right of first refusal, you are essentially giving up your right to let the open market determine the value of your cell tower rental income stream. If you accept that, shouldn’t it be worth something? Do you think that if a lease buyout company finds that Carrier X has an ROFR on your lease, they’ll make an aggressive offer to you? Why should they? The transporter with the ROFR only has to match it.

So what is the real value of your cell tower assets?

Owners in the United States, what is the fair market value of your Verizon Wireless, AT&T Wireless, Alltel, Cingular, Clearwire, LightSquared, West Central Wireless, Cricket, Alaska Communications, Cox Communications, GCI Communications, Cellular One, Frontier Wireless, US Cellular Lease, MetroPCS or Sprint Nextel? Canadian owners, how much is your Aliant Mobility, MTS Mobility, Bell Mobility, Mike (Telus Mobility), Fido (Microcell), Mobilicity, PC Mobile, Primus Canada Wireless, Public Mobile, Rogers Wireless, SaskTel Mobility, Telus Mobility, WIND Mobile rates rental of the roof or tower valued at? What is it worth if they want to expand the premises and add an improved antenna array? Good… that’s the sixty-four thousand dollar question, isn’t it?

And don’t expect mobile carriers to provide you with answers or advice regarding site-specific values ​​for tower or rooftop leases. Landlords will never know the true value of their cell site leases until they perform a full audit of their cell tower leases.

Source by Steven Kazella

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