Verizon Cell Tower Lease Question

General Landlording & Rental Properties
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Verizon Cell Tower Lease Question

Dave Sparks
La Crescenta, CA · Member since 2013 · 3 posts · 0 votes

I was just cold-called by Verizon asking to lease them space at an industrial building I own in the Phoenix, AZ area for a cell tower. They started at $800/month and quickly escalated to $1200/month at which point I expressed some interest.

Does anyone have experience with these transactions? What is a good rate? Anything else to know/look out for when dealing with one of these companies?

Thanks in advance from a long-time lurker, first time asker. :)

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  • Ryan R.
    Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
    12y

    I used to work for AT&T and I spoke with a few customers who had leased their land for AT&T towers. The rates I heard of were in-line with what you've stated. Never heard complaints from the landowners. In fact some of them asked if AT&T would put up another tower on their property. 

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  • Kevin Costello
    Montclair, NJ · Member since 2013 · 19 posts · 5 votes
    12y

    I have an AT&T tower. They've been a pretty good "tenant". Rate was much higher but this is in suburban Jersey. Lease term is about to expire and they had a third party come to me to negotiate new lease terms. I thought that was odd but overall a good experience.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    By Verizon or one of the tower reps??

    Usually these reps lock up stuff and then put multiple clients on it.

    First you need to see if your land is sitting on a hotspot. They seem to want it bad. Why agree to only one carrier when you could land multiple on the same tower and increase return??

    If they want to build and put the tower up then definitely get much more in rent than 1,200 if they want sole exclusivity. Understand on leases they are generally drawn up with options over 50 years or so. This makes buyers pay 20 cents on the dollar for the future income stream. The reason is the carrier could go out of business, merge, hop to a better tower, technology could render the tower obsolete, etc.

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  • Dave Sparks
    OP
    La Crescenta, CA · Member since 2013 · 3 posts · 0 votes
    12y

    Ryan, Kevin & Joel - thank you for the replies and info. All much appreciated. I will follow up here if anything interesting develops with the situation.

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  • Nick Foster
    Del Mar, CA · Member since 2014 · 4 posts · 1 vote
    12y

    Hi Dave,

    $1,200 a month is too low of a rent for a cell tower in Phoenix. I have negotiated many deals in Phoenix and across the US on behalf of property owners. Typically the way it works is an agent for Verizon will make an initial offer (in this case $800 a month, what's the escaltor 10% term?, asking 25 years?) and they will negotiate upwards depending on how savvy the property owner is. While economics are important so is the fine print. Verizon has a 36 provision lease agreement and you need to understand your rights, your land, and what it is worth.

    In regards to Kevin Costello being contacted to extend a lease prior to lease expiration, this is standard practice. Tower companies want their leases to be secured for the longest term possible and what most property owners don't know is unlike most real estate leases, the landlord has little to no termination rights.

    Despite all this, having a cell tower on your property is a good opportunity to secure a credit worthy tenant paying you reoccurring monthly revenue. 

    Best regards,

    Nick Foster

    President

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  • Account Closed
    Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    Here in the Dallas area Verizon is paying around $2500 per month base on a 25 year lease.

    Joe Gore

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  • William Jenkins
    Real Estate Broker · St. Louis, MO · Member since 2014 · 206 posts · 194 votes
    11y

    I am probably a little late to the game on this thread, but let me know if Verizon is still active.  I typically represent the big 4 carriers and develop sites on their behalf, but I could certainly help you on your deal.   

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