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Tool Talk Discussion Forum

OT: Cell tower lease

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genep

10-17-2007 17:58:58




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I have a cell tower on my property and have been contacted about "optimizing" the lease. They want to negotiate the amount down for a guaranteed lease period. Their pitch is that with all the buyouts and mergers in the wireless industry some towers are becoming redundant. Is anyone close to the wireless industry with insight to this innovative way for the wireless companies to sock it to the individual land owner?

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buickanddeere

10-18-2007 15:14:16




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
Get a contract lawyer and save yourself $$$ in the long run. Takes a weasel to know a weasle.



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genep

10-18-2007 15:44:33




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 Re: OT: Cell tower lease in reply to buickanddeere, 10-18-2007 15:14:16  
At this time they are not trying to force it on us. The carrot they are holding out is longer term security for less rent money. We're willing to look at the tower for what they are now paying, but for any less we'll let them take it down.

Why would they offer 12 years guaranteed at any amount if they thought they were not going to use it?



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genep

10-18-2007 09:06:14




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 Thanks for your comments in reply to genep, 10-17-2007 17:58:58  
We're in Central Mississippi so real estate isn't like Dallas/Fort Worth. But this is a 350' tower along a very busy US highway. The lease is structured to renew every 5 years with a 2%/yr escalator at renewals. We've decided not to negotiate with them and let it run it's course.

Thanks to each of you for taking time to discuss this



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railhead

10-18-2007 10:12:40




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 Re: Thanks for your comments in reply to genep, 10-18-2007 09:06:14  
gene, I called him again to get more details. The company that bought his land was a tower builder. I guess they bought it and built a tower so they could lease the tower for cell site equipment. The tower is very close to that Texas Speedway that is outside the FT Worth city limits. BTW this deal took place in 2000. It may go for more or less now, depending on demand. remember 2000 was BEFORE the tech/telecom/internet stock market went south.

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genep

10-18-2007 13:05:36




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 Re: Thanks for your comments in reply to railhead, 10-18-2007 10:12:40  
If they are paying him rent payments to use his tower it's probable that they will try to negotiate with him, too.

I talked to a VP with the lessor this morning. He said that they are trying to improve their profit ratios. I just don't see how cutting their lease expenses by $150/mo per site is going to get them there. Any way, we are going to let it run it's course.



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railhead

10-18-2007 13:47:39




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 Re: Thanks for your comments in reply to genep, 10-18-2007 13:05:36  
No my buddy sold his land out right, money is in his pocket and land belongs to US Tower or whoever. No further negeoation with him.

As for them trying to save by cutting 150 per tower, think how many towers they may be trying to do this to. Accountants can come up with clever ways to cut cost and cook books to make profit look better to boost stock prices and put more money in the pocket of greedy corporate thieves. They have only shareholders to make happy, to h3ll with the small guy. I know FIRST HAND this is true. My entire retirement fund was stolen from me when the tech stocks went bust.

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cat236

10-18-2007 08:11:02




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
Two of my closest friends are in the industry in the engineering portion. Site acquisition is a big part of the game, but making money is the biggest part.Generally speaking they do not take towers down that often to reassemble them somewhere else.They usually "fell" them when coming out of service, that is they remove all salvageable dishes and such, cut the wires and let her fall.You make think you have them by the root end, but you dont.Most moderate towers have a cost between 100g to 150g.To them these are minimal costs as opposed to the monthly outlay of lease costs.That is to say building another tower is not a big scare tactic, they usally can upgrade cheaper by building new.You should make sure to negotiate wisely,you may infact see a monthly decrease but you are now guaranteed a monthly income for x-number of years. A check every month and you dont have to lift a finger,or no check... just my opinion good luck

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railhead

10-18-2007 06:35:35




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
A friend of mine sold a plot of land to a cell company 100 feet by 100 feet roughly 1/4 of an acre for $110,000. No lease. This was just North of Fort Worth, TX close to I-35



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Dusty MI

10-18-2007 06:12:15




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
I feel that not too far down the road they will be going to satelite phones and cell towers will be obsolete. The County must think so also, because in order to put one up in this county the tower people must provite the county with a letter of credit. If the tower is abanded ,not used, for one year then it will come down. Eather the tower company takes in down or the county will use the letter of credit and have it taken down.

Dusty

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buickanddeere

10-18-2007 15:17:04




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 Re: OT: Cell tower lease in reply to Dusty MI, 10-18-2007 06:12:15  
Sat phones will not and can not make cell phones obsolete. A sat phone needs a clear and unobstructed line of sight between the phone and sat. Try that in your vehicle, building or while under a tree.



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Mattlt

10-19-2007 04:07:39




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 Re: OT: Cell tower lease in reply to buickanddeere, 10-18-2007 15:17:04  
Plus, the delay would be really annoying. No one would put up with it.



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oldfarmtractor

10-18-2007 04:24:48




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
I have seen the leases go for typically 3 years. Around northern Illinois they go from $4,000 each month to as little as $1,000 a month.

Remember, when it comes to a contract you want something and they want something. You get the money and eventual site remediation. They get income and location.



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David - OR

10-17-2007 22:00:27




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
Location, location, location.

Cell service requires line-of-sight between the phone and a tower, and this is not likely to change anytime soon. So if you have a hilltop location with a good view along a major highway the tower is not likely to go away easily, no matter what happens with the industry players. If, on the other hand, you are in a completely flat area, and your neighbor could host the tower as easily as you, your site has less geographic value and you have less certitude of a continued lease.

Another thing you can do is to guesstimate the time required to move the tower, perhaps based on how long it took them to set it up in the first place. Say it was a 3 man crew and it took two days, take $50.00 per man-hour burdened cost -- that's $2500 minimum to move it. Suppose the useful life of the broadcast equipment is 5 years, that's $500 per year extra that you can charge them vs. the nuisance factor of moving the tower elsewhere (maybe as much as $1000 per year considering net present value).

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T_Bone

10-17-2007 18:30:58




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 Re: OT: Cell tower lease in reply to genep, 10-17-2007 17:58:58  
Hi gencp,

If they didn't need your tower, it would already loaded on the truck heading for a different sight.

Billions of monthly users paying a huge monthly fee for the uaage. You might as well get your piece of the pie.

T_Bone



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