Advice for Getting a Cell Tower on Your Self-Storage Property and Making Money From the Lease

Adding a cell tower to your self-storage location can generate some nice additional revenue for your business; however, there are some things you need to know before you sign the lease agreement. Consider the following advice from a telecom expert.

Hugh D. Odom, President

December 9, 2020

5 Min Read

Thousands of business owners are trying to figure out how to get a cell tower on their property and add revenue to their bottom line. Most are convinced their site is perfect for one, either because they have the highest land in their area, the cell service in their vicinity is poor, the property has a high traffic count, etc. For whatever reason, they believe a telecommunications company should be interested in using their location.

The truth is cell-tower companies don’t build their wireless network around specific locations. Rather, they find properties that fit in with their existing plans. Your self-storage facility may not be a good candidate, even if you think otherwise. If you wish to add a cell tower to your site, here’s some advice to help you determine your odds, submit your information to a carrier, understand the lease and more.

Things That Impact Your Chances

The number and types of cell towers in your immediate area greatly impact the odds of your self-storage property being selected for a new installation. First, establish what cell sites exist within a two-mile radius of your facility, then figure out exactly how many wireless carriers are occupying them. This’ll help you determine if there’s a need for a wireless carrier to add a new tower.

Zoning is also a factor. Counties and cities have varying regulations regarding the construction and operation of a cell tower. Before you approach a company about placing equipment on your property, determine if your land meets the requirements. You can conduct an online search to see if your property qualifies, or call your local zoning office and ask about the requirements and prohibitions related to cell-tower sites in your area.

With limited exceptions, cell towers aren’t allowed near residential areas unless there are significant setbacks. Properties zoned for commercial or industrial use have a better chance of being usable.

Finally, wireless coverage is still an issue in some areas. Mobile phones have morphed into small computers capable of transferring significant amounts of data. When considering the carriers in your market, research the capacity of their networks—for example, 4G vs. 5G—by exploring their websites.

Submitting Your Property for Consideration

There are currently about 400,000 cell sites in the United States compared to approximately 150 million privately owned parcels. That means that less than half a percent of properties are being used for cell sites. One ray of sunshine is that with the 5G boom coming over the next five years, the circumstances may improve.

To increase the odds of getting a cell tower on your self-storage property, consider reaching out to a wireless carrier directly. To help move your location up the company’s list of candidates, you’ll need to provide the following information:

  • Your name, phone number, email and mailing address

  • Your property’s street address

  • Total property size

  • Building height and total roof-surface size

  • Latitude and longitude, plus GPS information

  • Zoning classification

If You’re Site Is Chosen

If a cell-tower company is interested in your self-storage property, you’ll be contacted by phone or, more likely, by letter. It might not come from the cell-tower company directly but from a third-party entity working on its behalf. The letter will likely state:

Your property has been identified as being a suitable candidate for a proposed cell-tower site. The project would entail the leasing of a small portion of your property from you for the placement of cell tower and associated equipment within a small fenced compound surrounding the cell tower. You will be paid monthly rent in the amount of $____.

Notice how the offer emphasizes that you’re a candidate. This is to let you know the company is interested, but you aren’t its only option. Next, it focuses on the use of your land. The carrier will usually need 1,000 to 2,500 square feet. The wording is designed to defuse any concerns you might have about how the cell tower could impact your overall property. Lastly, there’s the bait: paid rent. The company hopes you’ll chase it all the way to signing an agreement that’s best for it, not you. From its initial contact, the cell-tower company will attempt to get you to focus on what you’re being offered, not what you’re being asked to give up in return.

Maximizing the Lease Value

One phrase that should never be used when negotiating rent for a cell-tower lease is “market rent.” Most property owners view a cell-tower lease as a traditional real estate transaction, so they turn to familiar pathways to negotiate. Well, it isn’t a real estate transaction; it’s a utility transaction.

Every cell-tower site has its own individual value. Using “market rent” in a lease that has a typical term of 20 to 25 years can cost you $1 million or more throughout the life of that agreement. For example, if you sign a lease that pays $1,200 per month with a 3 percent escalator every year, then you’re effectively getting paid the same amount every year (taking inflation into account). No matter how much value the cell-tower company makes from the use of your land, you won’t see another dime. Why? Because it got you to focus on rent, not the financial structure of the lease.

Again, a cell-tower lease is a utility agreement. Your rent should be based not solely on how much space is being used but on how valuable that use is to the cell-tower company, either by the services it’s able to generate from the tower or additional revenue it garners from other wireless carriers subleasing space.

Whether you’re tempted by the money or afraid you’ll lose out on an opportunity that someone else will snatch up, always remember that no matter how much research you’ve done or even how much you may know about real estate, the cell-tower companies negotiate agreements every day. They make money by getting you to leave it on the table. Don’t let that happen. Know the value of your self-storage property so you’re offered a lease that’ll benefit you for years to come.

Hugh D. Odom is president of Vertical Consultants, a telecommunications-lease consulting firm currently working with approximately 4,000 self-storage facilities across North America, including Extra Space Storage, Life Storage, StorageMart and Simply Self Storage. Hugh has more than 22 years of legal and telecom experience. He was an AT&T attorney for more than 10 years. For more information, call 877.456.7552.

About the Author(s)

Hugh D. Odom

President, Vertical Consultants

Subscribe to Our Weekly Newsletter
ISS is the most comprehensive source for self-storage news, feature stories, videos and more.

You May Also Like