Volume 1 / Number 2

Cellular Tower Sites in SoCal: Demand Continues to Soar

BACKGROUND
Booming demand for cellular services has cellular providers scrambling for coverage, especially along the highly traveled freeway corridors of Southern California. State and local government agencies have been inundated with applications to locate cellular towers in strategic locations, resulting in a “lessor’s market” as many public and private land owners have found themselves in a position to demand significantly higher ground lease rates for these sites than in previous years. This trend is especially evident within jurisdictions of smaller cities, which can typically provide a more timely approval than larger governmental agencies.

LEASE TERM VARIATIONS
Given the current high demand and poor exchange of infor-mation, lease terms often vary significantly. A recent survey of cellular tower site leases along major Southern California freeway and highway corridors revealed base rents ranging from approximately $1,200 to $3,000 per month. Signing bonuses are not uncommon for leases with five to ten year terms containing options to renew. Some lessors permit sublease agreements, although in many instances the actual terms of a sublease agreement are not stipulated in the original lease agreement, but are negotiated on an ad hoc basis when the situation arises. Terms for sublease agreements also vary widely. While rent escalations vary, many are currently based on the Consumer Price Index (CPI).

AESTHETIC AND LAND USE ISSUES
With the dramatic increase in cellular towers, governmental agencies and the public in general have become increasingly concerned about the appearance of tower improvements. Typically ranging in height from 60 to 100 feet and providing coverage for an area only one to five miles in diameter, their presence is becoming more noticeable. Government agencies have increasingly required cellular site users to disguise their poles to blend in with the surrounding area, resulting in the “mono-palm” and “mono-pine” aesthetics. Some local agencies have instituted bans or moratoriums on new cellular tower construction until long-term land use procedures for the placement of the antennas can be developed.

CONCLUSIONS
Given the currently limited supply of cellular tower sites in Southern California, especially along heavily traveled corridors in densely populated areas, a high level of demand is expected to continue in the foreseeable future. Cellular providers continue to seek realistic and creative ways to procure sites that are strategic for tower placement.

Click to Download PDF Version (80KB file)

ADDITIONAL MARKET MICROSCOPE ISSUES

Volume 1, Number 1
Volume 2, Number 1
Volume 3, Number 1

Home / The Company / What's New / Services / Assignments / Professionals / Clientele / Publications / Contact Us