What is the Market Price for Cell Site Rent?

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As originally published in AGL (April 2009) – PDF of Full Article
 
WHAT IS IT WORTH?

 

Everyone wants to get paid what they’re worth.

Whether it’s based on principle or pride, it absolutely galls us when someone else gets a better deal, or we lose out to someone who undercuts our asking price. While we steadfastly hold something’s worth as an absolute, we have often come to this determination by a subjective, mind’s eye calculation of what is commonly referred to as “the going rate.”

For cell site landlords, the determination of worth goes something like this: “My buddy is making $1,650 a month on his cell site lease and my site is in a much better location than his so I should be getting $1,800.”

Landlords are often irked and even angered when they are told that’s not the rate that the tenant wants to pay. They think they’re getting gypped. They don’t understand why this tenant is not honoring the going rate. And therein lies the problem: never confuse the “going rate” with the “market rate.” The last house to sell on my street in San Diego almost a year ago has nothing to do with what a different buyer will pay for my house today.

The real market rate for cell site leases is not what another tenant paid down the street. In today’s business environment, it’s what the competing potential landlord across the street will accept. Thanks to carriers’ escalating operating costs, the public’s voracious appetite for new technology and the network’s evolving engineering requirements, cell site leasing has become a competitive marketplace. Let’s take a look at what landlords can do to protect their income. (Continue reading full article in PDF)

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