Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/443516
17 January | February | 2015 CCIM.com company can be used to locate owner infor- mation. In addition, cell tower lease consul- tants of en have proprietary databases or industry contacts that can provide market rent estimates. Periodic Escalators. A low rent escalator — usually considered less than 2 percent annu- ally or 10 percent every f ve years — should be renegotiated at the earliest opportunity as a low escalator can adversely af ect a cell tower lease value. It is usually advisable to negotiate consumer price index plus 1 percent with a guaranteed 3 percent minimum annually. Collocation. Many cell towers have more than one tenant, increasing the tower owner's prof t margins through multiple rents. Col- location also provides a great opportunity for the property owner to receive a portion of the additional rents, assuming the lease includes a revenue sharing clause. Revenue Sharing. Revenue sharing agree- ments vary considerably but generally provide a revenue split between the tower owner and the property owner for rents received from tower tenants; however, revenue sharing will ideally occur with one or more current ten- ants, not just future tenants "potentially" leas- ing additional ground or tower space. Expansion Area Option. Carriers some- times want to acquire additional land on an existing site. Generally speaking, expansions command the same rent on a price per square foot basis as the initial ground lease area, and they are of en implemented in conjunction with new collocates. Property owners should seek an option fee for future expansion areas during initial lease negotiations. Rooftop Antennas. Rooftop antennas historically have been decommissioned at a higher rate than towers, giving them a lower market value in relative terms. Location. Limited worthwhile tower and rooftop locations exist, especially in high-density urban markets, where space is limited and signal and bandwidth demand is always increasing. Towers and antennas located adjacent to interstates, major inter- sections, and other high traf c roadways are considered premium locations. Adjacent Towers. Close proximity of like-kind cell sites can reduce a tower's desir- ability. Redundant towers of en occur as a result of carrier or tower company mergers or acquisitions and are one of the primary causes of site or tower decommissioning. Selling Term and Lease Rights. T e dura- tion of current and successor lease rights can range from a few years to perpetuity and the lease rights sold can vary greatly. When negotiating the sale of a cell tower lease it is important to consider the total duration of lease term sold and future property objec- tives, as the sale of cell tower lease rights can restrict a property unnecessarily if not care- fully evaluated. Jame ennedy is a cell tower lease consultant to individuals, corporations, and municipalities. Contact him at support@celltowersecrets.com. The CCIM Institute's new preference-matching property marketing platform helps you do more business. Log on at CCIM.com/dealshare . (Formerly MailBridge) s Searchable property archive s Geo-coded listings s Customizable dashboard s Email digest options s Posts by CCIM Institute candidate members New features include: