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5 Insider Tips to Increase Cell-Tower Lease Revenue at Your Self-Storage Facility

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By Hugh D. Odom

Adding a cell tower to your self-storage property can generate new revenue. However, many facility owners continue to make the same mistakes when it comes to negotiating and structuring the cell-tower lease—and it’s becoming costly. The average landlord throws away more than $852,400 during the life of a typical cell-tower lease, and this amount continues to grow.

To ensure you’re getting the most from this add-on profit center, here are five tips to maximize the cell-tower lease revenue at your self-storage property.

Tip 1: Level the Playing Field

Property owners sometimes treat a cell-tower lease like a do-it-yourself project, and the Internet like a home-improvement warehouse where they can get all the information they need. The problem is most of the information found online regarding cell-tower leases is incorrect and not necessarily applicable to your situation. It’s like buying a ruler that isn’t straight and trying to build a house with it.

The cell-tower companies not only anticipate this, they rely on it to increase the revenue margins they derive from your property. The numbers don’t lie. In 2016, the three largest cell-tower companies generated more than $12 billion in revenue, but only paid about 16 percent of it to property owners in the form of rent payments. Why? Because the property owners negotiated undervalued cell-tower leases.

Tip 2: Take Your Time

Whether you’ve been asked to enter a new cell-tower lease or extend the term of an existing one, one of the most common tactics these companies use is to set false deadlines. They’ll say an offer is only good for a limited time to apply pressure on you to make a quick decision. Why? Because quick decisions about matters with which you’re unfamiliar lead to big mistakes.

Cell-tower companies will also play the “rent card.” This happens two ways. In the case of a new lease, they’ll say you’ll lose potential rent if you don’t agree. Even more drastic, in the case of an existing lease, they might say that if you don’t sign the offer, they’ll relocate the tower and you’ll be in jeopardy of losing your revenue.

Remember, you’re in the driver’s seat. It’s your property, and they’re knocking on your door because they need you.

Tip 3: ‘Market Rents’ Don’t Exist

One phrase that should never be used when negotiating a lease for a new or existing cell tower is “market rent.” Because most property owners view this type of contract as a traditional real estate transaction when it isn’t (it’s a utility transaction), they turn to familiar pathways to structure the financial components of the lease. This is bad news for you and great news for the cell-tower companies. Why? Because they want you to perpetuate the bad deals that other cell-tower landlords have made over the last 20-plus years.

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