A few weeks ago, storage operators at the New Jersey Self-Storage Association convention were informed of a unique additional revenue stream for their businesses. Attorney Neil S. Levinbook delivered a seminar on cellular tower leases, positioning them as an ideal long-term, reliable income opportunity for storage facilities. While the association between cell towers and self-storage is not immediately obvious, this is an interesting opportunity for operators willing to lease a different type of space at their facilities.
Levinbook explained that as the cellular service industry grows, demand for cell tower sites continues in turn. Cell sites have popped up across the U.S. over the years, as Americans increasingly depend on cell phone usage. The concern is that local zoning codes and NIMBY (not in my backyard) opposition from businesses and residents limits where cell sites and towers can stand.
Tower owners are turning to storage facilities as a logistic solution for several reasons. Facilities utilize commercial zoning, and are ideally located near residential areas. Owners are easy to get in touch with, and easy to work with. Bulky storage units hide much of the cellular equipment that sends NIMBY-ers up in arms. In some leases, the equipment area is designated within an actual unit (however, no separate compensation is given for any units occupied).
In urban areas, leasing to a cell tower will earn your storage facilities anywhere from $750 to $2,000 a month. Figures vary widely depending on the carrier tenant you work with, the timing of the relationship, and your facility’s location. Over the length of a lease (ideally about 20 years), the value of your lease should only go up— to nearly $450,000 total on a $1,000/month lease.
If you are approached by a cellular provider to lease your land, respond quickly with information for the tenant, providing existing land plans or surveys. But don’t agree to an offer at the first meeting, Levinbook urged. Instead, negotiate to improve the lease they provide. Restrict their right to sublease, reduce the square footage they’re requesting, and ask for 3% escalation on the rent per year.
To obtain a lease yourself, start by submitting your site directly to the carriers. For more details, visit http://celltowerattorney.com. Through these unique, somewhat unexpected partnerships, even the smallest-scale mom-and-pop storage operators can enjoy a hearty revenue stream from this extra lease on their property. Thanks for reading the self-storage blog!