Contract Rent and Interest Vs Inflation?

Discussion in 'Design, Development and Standards Discussions' started by John W. Ross, Apr 29, 2008.

  1. John W. Ross

    John W. Ross Friend of the Community

    I am being approach by a phone company for a cell tower on my property. They propose 500 per month and 10% every 5 yrs. Inflation is at least 3.5 % min. average ( w/o including 1978,79,80 ) Should one get at least 3.5% per year---- I also read that rent can be 300 to 3000. Another source said 800 to 2000. For a semi-rural site with excellent "already built accessed road" and during 5-6 days per weak ( friendly parties close by who would act as a guard for security.) Wouldn't you expect to get about say 800 per month at least with
    3.5 % per year for 25 yrs?
    If someone could offer some advise I would greatly appreciated it. Thanks very much
  2. Bob Hardee

    Bob Hardee Friend of the Community

    Hello John,

    I am retired, but I am a former site acquistion manager for a major tower company and a site rep prior to that. I have negotiated hundreds of leases with property owners.
    There are primarily two major ingredients which determine the value of a site to a company.
    The need for a specific location and the zoning situation.
    Most companies attempt to locate at least three potential sites and which one they pick depends on the best site to meet the system requirements assuming it is permitted by zoning codes.

    The rent is usually a smaller consideration than many other factors.
    From your description, you are probably in a good position to negotiate (and it is always somewhat negotiable) as long as your counter offer is reasonable.
    If they have made an offer of $800 a month with a 10% increase in 5 years, they would probably accept a reasonable counter offer of say $1000 to $1500 per month with a 3 percent annual increase.
    Most companies should give you a non refundable payment for an option to lease while they investigate the zoning and building permit requirements, etc.
    If your counter offer is too high for them, just tell them you are willing to listen to reasonable counter offers.

    Good Luck,
    Bob Hardee

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