Answer
Jun 29, 2016 - 09:49 AM
Interest rates have been and will continue to be a hot-button issue for the wireless carriers. We are not seeing as aggressive as an approach as you are suggesting- whereby the carrier wants to remove altogether the annual rent esclation. The exception to this observation is with tower build to suit contracts- where there seems to be a surplus of companies willing to agree to substandard BTS deals in order to get towers to build. In that case, low rents and low escalation are prevelant. Thus, if you are referring to build to suit tower leases, escalation is simply one part of a compeitive bid. If you are referring to proposed ground leases for new towers, the emphasis still is on site uniqueness. A good site location will command above market rent and at least market escalation. If you are refering to collocation leases, the same applies. A good site will command above market rent and decent escalation or vice versa. If the tower isn't unique, then you may have to stomach a lower escalation.
One comment I do have is that the market for cellular site leases isn't directly tied to the general real estate market. Just because rental rates are rising in other sectors doesn't mean they should within cellular leases. Those other markets aren't subject to the technological and competitive market changes that the wireless sector is currently experiencing.
One comment I do have is that the market for cellular site leases isn't directly tied to the general real estate market. Just because rental rates are rising in other sectors doesn't mean they should within cellular leases. Those other markets aren't subject to the technological and competitive market changes that the wireless sector is currently experiencing.
Add New Comment