Self-Storage as a Cell-Tower Site: Pros, Cons, Laying the 'Groundwork'
Copyright 2014 by Virgo Publishing.
By: Steve Kazella
Posted on: 08/25/2009



 

For self-storage operators, cell towers can be a godsend, providing decades of steady rental income from grade-A tenants, or a bust, depending on how the cell-tower lease is drafted and the site developed. Self-storage facilities are outstanding places to install cell towers for several reasons. First, many are in high-traffic areas on main commercial arteries. In addition, they usually have the space, proper zoning and setbacks required to obtain cell-tower approval.

If you’re interested in having a cell tower on your storage site, there are three ways to connect with a carrier:

1. A carrier might “stumble across” your facility and make you an offer.

2. You can work with a large, multi-national tower corporation that knows local carrier requirements and builds sites. The corporation will pay the property owner a few hundred dollars monthly, and space is then sublet to various carriers. In this case, the tower company receives all revenue from the carrier leases.

3. You can partner with a property-management company that has contracts to represent, market, promote and manage the development and location of cell-tower sites. The management firm is usually compensated with a percentage of the lease revenue.

The biggest myth about getting a cell-tower built at your site is that you can contact carriers directly. You’re actually better off posting a “Cell Tower Wanted” sign at your facility. You probably have a one in 10,000 chance of getting the right people to review your site by making contact yourself. The carrier industry is controlled by a small number of individuals who are in the know.

Time Is of the Essence

If self-storage facilities make such great cell-tower sites, why don’t more operators have them? If it were easy to get a cell tower built on your property, everyone would. Leasing a monopole at your facility requires luck, patience, the proper professional guidance and some work on your part.

Wireless telecommunications carriers outsource all of their site-selection work to site-acquisition contractors whose job is to find properties and execute leases at locations suitable for development. Dealing with a larger self-storage firm often requires the consultant to go through his out-of-state corporate real estate department. It’s always easier to find a different site with a local owner than deal with out-of-state attorneys and property managers who knew nothing about a wireless carrier’s needs.

Cell-tower leasing contractors are compensated for bringing in a lease and sometimes have time-bonus incentives, so they’ll always choose to provide a site to a carrier that will be leased the fastest. So it’s imperative for any storage-facility owner to be prepared to move quickly with such a deal, and make sure the leasing contractor understands you have the ability to get the lease executed in a reasonable time.

Benefits of Cell Towers

A three-carrier cell tower whose lease has been properly crafted can generate anywhere from $2 million to $3 million in revenue over a 30-year term. Besides the obvious financial benefits of leasing space to a carrier, there are many other advantages to having a cell tower at your facility.

Enhanced emergency service is perhaps the most important benefit to your community. Your neighbors will benefit from your cellular site even if they aren’t a wireless subscriber. Most police and emergency services transmit via wireless communications.

Paramedic transport vehicles use cellular technology, which requires cell towers.  In the event of an emergency, wireless phones are often the only reliable technology.

Large and small businesses alike need wireless technology to flourish. A municipality with good wireless infrastructure will attract more businesses than a town with poor coverage. The trickle-down effect should yield higher, long-term occupancy rates at your facility.

Cell towers improve public safety, save lives, increase business productivity and provide a better overall quality of life.

Drawbacks of Cell Towers

Improper tower placement is a big issue. It's imperative that the proposed site not encumber any future development or in any way hamper your primary business as a storage facility.

The public is misinformed about the health effects of cell towers. The wireless industry has done a lousy job of explaining that cellular technology is not a health hazard. Would you be surprised to learn that your car alternator or computer emits greater electromagnetic fields than a cell tower? In fact, in a worst-case scenario, a cell site generally operates at levels equal to or less than one half of 1 percent of the allowable federal standards.

If a property owner isn’t properly advised during the cell-tower lease negotiation, the profitability of his site can be negatively impacted. Since the vast majority of lawyers are not wireless-leasing experts, even a good real estate attorney often will not catch things carriers slip into the contract. All cellular-site leases are heavily slanted toward the carrier, and there’s minimal wiggle room on most terms.

Attorneys often negotiate their clients out of deals. The carrier then goes next door or across the street, and you lose the additional income. Proper professional guidance is required to maximize revenue, reduce liability, and provide a mutually beneficial agreement for the carrier and property owner.

Attracting a Carrier

The previously mentioned options for obtaining a wireless agreement at your facility are all viable, but you need to be realistic about your site. For example, don’t waste your time if the site is a short distance from an existing tower, has environmental issues, is home to an endangered species, or is on a historical registry. And regardless of how you promote your facility to carriers, it’s imperative that you have a single point of contact to address any inquiries you may have.

First, confirm that your facility can support a carrier. Rooftop installations require 400 square feet of exterior or interior space, and towers need 600 to 2,000 square feet of ground space. Have copies of documents like property deeds and underlying ground leases, site plans or surveys at the ready. This will assist carriers in providing a timely design for the proposed equipment. If you operate more than one property, provide the carrier with a complete list for review.

If you’re approached by a carrier, don’t contact the municipality for its opinion. Carriers are experts at zoning these sites; leave any contact with municipalities to them.

Wireless carriers are actively seeking new cellular sites in all 50 states. In fact, more than 100,000 new cell towers need to be built across the country in the next decade. Self-storage operators who take advantage of this growth stand to benefit considerably.

Steve Kazella is the president of AirWave Telecom Property Management, a New Jersey-based firm that develops and manages cell-tower and rooftop wireless-communications sites. For more information, call 888.313.9750; visit www.airwavesites.com .

Related Articles:

Cell-Tower Lease Income for Storage Facilities : Tips for capturing this niche of long-term ancillary profit

Legal Perspectives: Cell Tower Leases and Your Facility

Ready For Your New Cell Tower? [Self-Storage Talk]