Market Rents – how are they determined – site installed revenue potential.
Posted on February 23, 2015
There are now 35 million cell phones across Canada. More phones means more bandwidth (MHz) needed. Cell phones have become a lifestyle.
Whether a cell antenna site is downtown or rural, the value to the carriers can be measured by their installed potential (MHz). Antenna site rents obtained by carriers are usually very low and unrelated to the gross income generated from the site. Rents are often set by the cell site information level of the landlord. Low equals low.
Bandwidth capacity measures the value of the site to the carriers and market rents can include a percentage those revenues. Average sites can generate millions annually. What are you getting? What is fair? A few percent of the gross site revenue should be considered. As traffic and revenue builds – more capacity is needed. Video is creates huge capacity demands and profits.
Capacity is building 42% annually to 2020 according to CISCO. Annual cell gross revenues can approach 10%. Most cell lease agreements provide no rent increases for 20 plus years ignoring inflation.
Not much of a business proposition for the landlord. Landlords need current information.
Contact us for your site’s Rent Index at 604-566-9811.