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July 20, 2024
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Gus Dahleh, Los Angeles Real Estate Developer, Weighs Pros and Cons of Cell Tower Leases

Have you been approached by a cell tower company to lease your land to set up a cell tower? Are you trying to find out whether it would be a good investment or not? 

Well, you have come to the right place! In today’s article, Gus Dahleh will be sharing the advantages and disadvantages of turning your land into a cell tower site. 

Before we jump into the pros and cons of cell tower lease revenue, let’s talk about cell tower companies and cell tower lease contracts. 

With the increased use of cell phones and mobile networks, telecommunication companies are always searching for the perfect place to set up a new cell tower. To reduce the amount of network blind spots, telecom service providers are constantly installing cell towers in rural and urban areas. Generally, the cell tower company searches for an ideal location and approaches the landowner to sign a lease agreement. The telecom company pays a monthly or yearly rent to use the landowner’s land as a cell tower site. 

The telecom companies make it sound like a great opportunity for the landowners, which it is, but there is still a catch. Gus Dahleh is one of the most reputable real estate investors in the Chicago, Illinois area. He says that the telecom service providers would use misleading tricks for rushing the landowner to sign the lease without properly understanding all the jargon in the agreement.

Gus Dahleh also believes that the cell tower companies have the upper hand in the agreement as they have access to the database of cell towers, but landowners don’t. So, there is no actual way to determine if the landowner is being paid the right value of the cell tower site. But, despite that, leasing your land to a cell tower company is a great way to generate a passive income.

If you are planning to sign a commercial cell tower lease, you need to measure both the merits and demerits of setting up a cell tower on your land. Let’s discuss four advantages and disadvantages of turning your land into a cell tower site. 

Pros 

Rental Income

A cell tower lease contract is a lucrative way to generate extra money every month. If you have an unused space, you can convert it into a cell tower site. The majority of cell tower companies or your potential tenants are multi-billionaires that will pay you the rent on time for many years to come. Gus Dahleh recommends the landowners get the lease that allows an annual raise in the rent. Being a landowner, you can also negotiate the rent value if a new subtenant is added to the cell tower.

As it is challenging to judge the real value of your cell tower site, Gus Dahleh suggests hiring an expert like himself to provide you an estimation of your cell tower lease. 

Improved network reception

Adding a new cell tower to your property will automatically improve the network reception in your area. If your area was in a network bling spot, it would greatly relieve the people living around your cell tower site. Gus Dahleh is sure that the new cell tower will not only enable your neighbors to have hassle-free conversations, it would also improve the safety of the neighborhood as they can quickly call any emergency services to get immediate help.

Lease buyouts

Once you have signed a cell tower lease, it will become an asset for you that can be sold at any given time, and you can get paid a lump-sum amount. In a lease buyout, a potential buyer would propose to pay an amount in exchange for your cell tower lease agreement. When you sell your contract, the new owner will start receiving the monthly or yearly rent of the cell tower.

Increased property value

Gus Dahleh says that the biggest pro of signing the cell tower lease is that it will automatically increase the property’s overall value because a cell tower can generate hundreds of thousands of dollars during the term of the lease.

Cons

Impacts aesthetic value

Having tall cell towers on your land can kill the aesthetic look of your property. In certain jurisdictions, cell tower companies can only set up concealed towers so that tall structures won’t impact the area’s natural beauty. Some of the companies have even started designing their towers to look like a tree or a building.

Impact on your property value

Gus Dahleh believes that the value of your property can either go up or down depending on the terms of your agreement. The drop in the value could be either because the potential buyer didn’t like the property’s aesthetic or if the cell tower lease doesn’t permit any development on the property.

Maintenance

For proper functioning of the cell tower, the telecom companies will perform regular maintenance, which means they will regularly visit your property. 

Health Hazard

There are a plethora of health concerns associated with installing the cell tower on your property. Many studies and researches have shown that the rays emitted by cell phone towers are linked to high rates of cancer and congenital disabilities. 

About Gus Dahleh

Gus Dahleh is a real estate entrepreneur who specializes in commercial real estate development with a primary focus on distressed assets. Since 2010, Dahleh has acquired over $50 million of commercial real estate assets and entered into long term leases with JP Morgan Chase Bank, AT&T, Walmart, Sam’s Club, and CubeSmart. Gus Dahleh has also developed a niche in the cell antenna industry by selling lease revenue to publicly traded REITS which include American Tower and SBA Communications Corp. Gus Dahleh began his financial markets career as an equity options trader at the Chicago Board of Options Exchange. Gus Dahleh has developed proven option strategies for the U.S. 30 Year Treasury Bond and Gold Futures based on seasonal and technical patterns. Gus Dahleh has a proven track record for providing direction on how to maximize the value of the commercial real estate and financial market investments. For more information, visit GusDahlehBlog.com or follow Gus on LinkedIn, Twitter, Instagram, Youtube, and Facebook.

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