Negative Interest Rates: Fixed Rate Investments: Cell Tower Leases


Why Negative Interest Rates

Curious why rates have been trending down? Well, here’s my take on it. With an eighteen trillion dollar debt, America would not be able to pay the interest and the only way the debt maintenance can be sustained is to follow the rising debt with inversely proportionate decreases in the rates of interest as controlled by the Federal Reserve. This is, in my mind, the only way the Feds can continue to pay our debt.

S&P Downgrades US Debt

Bloomberg in an article published June 10, 2015 stated the following:

“S&P cut its rating on the U.S.’s debt in August 2011 for the first time, amid gridlock in         Washington over the debt limit and government spending. That didn’t cause borrowing       costs to rise, though. At the time, 10-year U.S. Treasury yields were at 2.56 percent.           Within a year, they fell as low as 1.38 percent.”

The Case for Fixed Rate Investments

Fixed rate bonds, for example go down in price as interest rates rise. The relationship is inverse. So when interest rates trend down (as they must, to be able to stay out of default), fixed rate investments, like bonds, real estate and especially cell tower leases will rise.

Simply Because the Yields Are Disproportionately High

The history of the cell tower lease markets is relatively new; 20 to 25 years old. The yields began, for the cell tower investors in the 8 to 9% area. There was a risk of a smaller carrier (cell phone provider) being gobbled up in a buyout or merger. There have been tens of thousands of these leases being terminated. Giants like AT&T, Verizon and Sprint have grown geometrically through these buyouts and mergers.

Rates paid to property owners for use of their land or rooftops have gone from 90 to 120 times the monthly rent to 200 or more times the monthly. Where the base rents were in the $400 to $600 a month area, they are now hovering around 200 times the base rent.

Base Rent for These Leases Escalates an average of 3 to 4% Annually

Unlike almost any other investment, excepting real estate, the rent escalates 3 to 4%, adjusted each 1 to 5 years. Some are adjusted annually, some each 5 years, depending on how clever your negotiator was/is.

I’ve negotiated a mountain of leases, all towards the very top of these parameters. Very few can make this claim. Having a 3rd party as a negotiator is paramount to achieving the best terms and conditions. The nomenclature, the possibilities are just mind boggling if you have not been around and learned all the ins and outs of the telecom industry. Remember the endgame reward, upwards of 200 times the monthly rent when you get ready to sell your lease.

There are untold possibilities when selling. You can sell only a portion of your lease and turn the management of the lease over to a telecom investor. The purchase price would be calculated at the then monthly rent. So as your base rent increases, so does its value. And as interest rates fall, the values for will rise to new monthly multiples. This is why a properly negotiated lease is paramount.

Andrew G. Kellerman, President and CEO of, Inc., areas of expertise: Real estate, mortgages, Stocks, Bonds, Options, Insurance products, Cell tower lease negotiations and sales, V.P. Thompson McKinnon Securities.

Contact info: private line (760) 460-1782 Email


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Cell Tower Leases: “This balloon is due for a correction and here is why”

September 1st, 2015, early morning – I’m sitting here watching the DOW. It’s been down since the beginning and appears to be headed lower, much lower. I was a stock broker in 1987 and watched in awe, not believing that this could actually happen. It kept dropping and I learned that ‘down is faster’, much faster. I’ve since coined this phenomena as economic gravity. It always works.

Rising Interest Rates  = The Unknown


Markets DO NOT like the unknown, especially with serious signs of a potential collapse. I remember these ominous signs like it was yesterday. Smith Barney, where I was employed as a rookie, had a very well known market ‘chartest’ (charting investors emotional reactions to market conditions ad finding graphical patterns that have shown historic potential up and down side moves). He may have warned us of this potential. I didn’t have the understanding of what he could have been telling us. Besides, the few clients I had wouldn’t have been impressed as the markets were and had been rising for sometime. Then WHAM, on the 3rd Friday of the month, options expiration time, the market started the biggest percentage decline in all of history.

What does this have to do with the bond markets and fixed rate securities like cell tower/rooftop leases? In the first week of April 1987 U.S. T-Bonds began to sell-off. Toward the end of that year T-Bonds had plummeted 20% from January 1, 1987.


Bloomberg 01/01/15

“Yet to most economists, there’s no need for the Fed to wait as jobs and spending continue to pick up. Three-quarters of those surveyed by Bloomberg in August say the Fed will lift the upper bound of its target rate to 0.5 percent at its Sept. 16-17 meeting. The median forecast sees four more increases over the next year.”

Fixed Rate Securities Move Inversely to Yields

When interest rates rise, the fixed rate investment goes down. It costs less to buy a bond that yields, say 6%, when the market is at 7 or 8%. By buying it for less, the yield for that bond has risen, following the new water level of like investments.

It is the same for cell tower leases. when interest rates rise the value of tower leases will go down relative to where they are.

To be continued—-

Andrew G Kellerman, President of, Inc. experience: Real estate broker, Mortgage broker, Stock Broker (VP of Thompson McKinnon Securities); Commodities broker, US Bond and Corporate bonds, Options coordinator, Cell tower broker and consulting.

Please feel to phone me with any questions. Cell – (760) 470-1782

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8/31/15 Another Dire Warning Re Inflation: Fixed Rates (Cell tower Leases)

It’s Monday and the markets are again worried about the uncertainty about the world ‘s economy and the extreme inflation suppression that has gone on for 2o years. Will it explode? Will the feds HAVE  to raise interest rates? The markets do not like the unknown and often react violently.

“Posted on 8/30/2015, 9:00:45 PM by blam
Sam Ro
August 30,2015
US futures are trading in the red, signaling more volatility for the US stock markets when they open on Monday
Dow futures are down 177 points, S&P futures are down 22 points, and Nasdaq futures are down 46 points.
This follows what’s being interpreted as hawkish comments from Stanley Fischer, Vice Chairman of the Federal Reserve.
“Given the apparent stability of inflation expectations, there is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” Fischer said on Saturday during a panel at the Kansas City Fed’s Economic Symposium in Jackson Hole, Wyoming.”

Fixed rate investments, even ones that adjust yearly in an attempt to keep up with inflation, act in reverse to interest rates.


History has proven over and over again that ‘down is faster;. All things are affected by gravity, even economics. All bubbles eventually burst.

Andrew G Kellerman has a unique financial background: real estate, mortgages, securities, US and corporate bonds, options, and insurance. that gives him an understanding of cell tower/rooftop leases that few consultants can match.

He can be contacted at 760) 470-1782 of reached by email at


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Fixed Rate Investments: Cell Site Leases Could Get Pummeled!!!

Aug 24, 2015

As I awoke this morning the Dow futures were down 1,000 points. This is not a real big deal yet, but may portend the great collapse that many doomsayers have been predicting for years. I believe that someday all markets tend to find their true value, devoid of hype, over optimism and sheer greed.

An hour after the markets opened the vacuum had subsided. The reaction seems to be the worldwide financial pessimist realization that China IS REALLY in trouble due to major slowdowns in exports, a housing bust due to extreme overbuilding and the ensuing panic the US experienced just a decade ago.

Greece maybe ejected from the European Union, Spain, The UK all suffering pain and pessimism is growing. The financial markets don’t like the unknown. Fear, when born is the harbinger of PANIC.

How will this affect interest rates and fixed rate investments like cell tower leases? My take is that interest rates will rapidly rise and this will affect the fixed rate cell site leases as these are fixed rates (adjusted minimally by contract escalations). As interest rates rise, fixed rate securities will go down. It is just not the mathematical recalculations that may make these a losing proposition, but markets (investors) do not like the unknown and may choose to sit this one out.

Andrew G. Kellerman’s financial experience includes: stocks, bonds, commodities, insurance, options, real estate, mortgages, cell tower lease sales and telecom financial consultant dealing with many Fortune 500 companies., Inc. Initial consultation is free and can save or make you lot of money by helping you make the right decision. 760-470-1782 or Email

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Cell Tower Lease: Sell, Joint Venture or Refinance

Cell Tower Lease: Cash It In or?

There are several ways of turning your cell tower or rooftop lease into cash without giving up title. Just like any other real estate you can opt to sell your lease, joint venture your lease or just recently, the option to refinance your lease is now possible.

This gives you, the lessor, more alternatives than you’ve ever had to get the cash you need, when you need it no matter why you need it. Let’s explore these and see if one of these are for you.

Sell Your Cell Tower Lease

For the past twenty years or so, selling a cell tower lease was the sole method of converting that cash flow into a lump sum. Private and Wall Street buyers paid cash for the leases giving investors an income stream that was above average. There were risks that some leases would become worthless due to mergers and acquisitions of carriers, but these were discounted and the reward proved to be worth the risk.

As this set of telecom based assets has evolved the risks have achieved a downward bias and buyers are prone to paying more for the basically same assets. There are also more players that are willing to further bid up the purchase prices that are actually assignments of these leases ranging from 30 to 99 years. For these time periods the buyers get the benefit of receiving the income that is produced. They also take the risk of a partial or complete loss if a carrier or set of carriers choose to abandon or terminate a tower or rooftop.

Joint Venture Your Tower Lease

What? Yeah, sell a part ownership in your lease or sell part of the time you have remaining on your lease. Just about anything is possible, as long as it makes sense to someone who is willing to pay for the reward they could receive. Remember, you own a cash flow and that can be sold if it is discounted enough to make it possible for another to make a profit.

What I like best about the JV (joint venture) possibility is, you get to get your cake and eat it to. Sell half and keep receiving half the income. Here’s the sweet part; you have a builtin professional manager that is going to handle this lease until, forever if planned right.

When it comes a time for a renegotiation of the lease, your ‘manager’ is going to do the best they can because they have an interest (same as yours). Any other carriers your ‘manager’ can attract, the more income you will get.

AND you have a builtin buyer should you ever decide to let go of the balance of your lease.

Refinance Your Cell Tower Lease

This is new and huge. Until recently, a bank would not loan you a nickle on your cell tower lease for one good reason; it had a termination clause. this meant that the cell carrier, your lessee, could, for any reason, with as little as 30 days notice walk away from the lease.

We have discovered a source that has learned the risk/reward calculations (probably former cell tower buyers) and are willing to lend money to construct new towers, loan money to purchase a tower lease or even a group leases. They will lend up to $25M for the right project., Inc. Initial consultation is free and can save or make you lot of money by helping you make the right decision. 760-470-1782 or Email

Andrew G. Kellerman’s financial experience includes: stocks, bonds, commodities, insurance, options, real estate, mortgages, cell tower lease sales and telecom financial consultant dealing with many Fortune 500 companies.

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Cell Tower Financing: Cell Tower Refinance

Cell Tower Financing is Available

We are delighted to announce that we now have financing for the cellular industry to build, buy or refinance existing telecom assets. Until recently this was only available to the major carriers, larger lease aggragators and tower builders.

Cell Tower Construction Financing

Our financial connection is not keen on spec building, but if you have a firm commitment from a major carrier or two, they want to talk. They will lend up to $25M on the right deal.

Refinance Cash Out or Leverage for More Locations

Many may wish to just refinance to get getter terms or get some cash without selling part or all of your tower lease. Always wanted to be a cellular tower mogul? Use your refinance to purchase another tower site lease.

Get a quote and explore the possibilities. Cell tower finance inquiry form.

Andrew G Kellerman’s financial background includes: Real estate, mortgages, stocks, bonds, commodities, insurance, cellular consulting and sales.



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Cell Tower Lease Buyers: What Will They Pay?

Cell Tower Lease Values

I get the question, “What is my cell tower/rooftop lease worth”?, all the time. Problem is, there is no pat answer. Different buyers will pay different prices for different leases at different times. In other words, each lease needs to be taken apart, piece by piece.

Location of the Tower/Rooftop

A cell tower’s location is intricate in the evaluation of the lease’s value. Some older towers may have become less important to cellular phone carriers because they have filled in their coverage by buying another carrier’s cell site. They may have made a deal to locate their equipment on a competitor’s site or even purchased an entire carrier and this site, your site, may have become redundant. Whether your site is considered a necessary part of the coverage now and in the future is a fundamental of pricing when buyers bid on your cell site. What the prevailing rent is in the area paid by a carrier or its competitors is also a factor in the calculation of the value.

Remaining Term on Your Lease

Most buyers are not going to let you know that the less time you have on your tower lease, the more the lease is worth. Since most leases are sub-par when it comes to monthly rent, escalators and co-location, buyers know that historically they will be able to re-negotiate the lease. Often times they will be able to double the rent, improve the escalators and add participation in the sub-leases they may have with other carriers who house their equipment and antennae.

Rent, Escalations and Co-location Rents

Rents, escalation clauses and co-location rents are all negotiable to a point. You need to understand the importance of that cell site to the carrier(s) occupying the tower/rooftop. Some sites are more important than others. Cell site lease buyers will take this into account when bidding on a lease.

Know the Cell Tower Buyers

Remember you are dealing with companies that are in business to make a profit and their sales people get paid more if they can purchase your lease for less. Having been introduced and trained in the cellular tower business by one of the top buyers in the business, I am very familiar with the whole sales routine. I withdrew from the buyers’ side of the business and decided to put myself in the middle, helping sellers get through the many, many ploys and tactics that I thought were not upfront and transparent. Don’t get me wrong, there are some great companies out there, including the one that trained me. the problem gets back to the less that is paid for a cell tower lease, the more the sales person is paid.

I can tell you that most sales of tower and rooftop leases are under priced. And I can also tell you that there is a surefire way to make sure you get the most out of your site lease, without getting yourselves into buyout that you will pay for the next 30 to 99 years.

Using a Cell Tower Consultant

A cell tower lease adviser/consultant or even a cell tower broker will make you money. The sales people hired by cell site lease aggregators are well trained, motivated and will take advantage when they can. You need representation to get the most out of your lease.

Andrew G. Kellerman background includes: Stocks, Bonds, Insurance, Options, Commodities, Real estate sales and syndication, tower lease sales and brokering and as a Financial Adviser involving many Fortune 500 companies.

Give me a call before you negotiate! 760-470-1782 or fill out an application to get an idea of what your cell lease is worth.

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Connect to the Internet Using Your Cell Phone

Each is Becoming the Other

Last week e talked about using your cell phone to use the Internet and using your computer for verbal communications like using a phone. The functions for the devices are becoming similar and each is becoming the other. Not only does this seem to be a competitive disadvantage for each it seems to me to border on being duplicitous.

Cell Phone as Internet Router

Cellular phone manufacturers, in their fever to be everything to everyone, have now figured how to turn the cell phone into an Internet router or even a ‘hot spot’ for multiple computer connections. Using USB cables or BlueTooth, I can use my cell phone same as I would an Internet wireless router.

Hook My Cell Phone to Internet Router

I can also hook my cell phone up to my Internet wireless router to surf and download data. I’m not even going to try to explain the ‘how to’ in this article. there are many websites that can do this much better than this blogger. My only interest in this is from my prospective as a financial consultant in the cellular industry, advising those who wish to renegotiate or sell their cell tower or rooftop leases. That interest is: what’s going to happen to these leases, now and in the future.

Valuations of Cell Tower Leases

In order to stay ahead of what’s coming I need to get a sense on where the two industries (cellular vs WiFi) are headed. Here are my questions hen I look at the evolution of the relationships between computers vs cellular bring. Will the need for cell towers diminish or increase? Will cellular transmission of WiFi continue to grow? Will VOIP continue to cut into cell phone business? Or will each industry merge with each other or grow separately into to unique forms?

We haven’t got into television yet. Will we get TV over our cell phones? Be able to make calls on our TVs? That discussion is for another day.

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Cellular on Your Portable: WiFi on Your Phone

I tell my two teenagers to use WiFi (wireless fidelity) when they use their cell phones in our home when they use the internet. WiFi is normally a flat fee vs the carrier fees they use when they download data via cellular minutes.

The two methods used on our devices are becoming interchangeable to the point that our cell phones can be our computers (Internet receptions) and our computers can become our phones. You can get Internet on a cellular phone and make calls on a portable device or desktop computer.

You can use your computer to talk to friends or business associates or you can get an actual hand held phone for home or business use complete with a phone number to communicate with the world. There are a plethora of each of these programs/devices available.

Want to talk or video chat using just your computer? Yahoo Messenger or more than 80 other programs that will allow ‘phone calls’ or video and chat capabilities.

The only point is that each medium is becoming the other and they are both becoming the same.

What will this do to cell tower and cell tower lease values?

It is this telecom consultant’s opinion that in the near future WiFi will dominate the telecommunications industry for both data transmission and voice communications.

Presently the cellular industry has the coverage advantage and are very aggressive in extending their lead. Sometimes the aggressive is the enemy of the wise. In an attempt to maximize income on their cell site (rooftops or towers) they allow competition to infiltrate their bases by way of microwave equipment that can send/receive data, thus allowing WiFi competition.

Dead zones or poor reception areas are being ‘filled in’ with the advent of smaller cells instead of the looming towers. “While giant macrocell sites have been the industry norm for years, carriers are increasingly turning to a range of smaller cell site options as a way to reduce costs and speed network expansion. These include microcells, picocells and femtocells.”1/28/15 – Michael Harris –

Coverage and cost seem to be the two keys in this battle of reception of the Internet and verbal communications. Who will be the winner? My guess is that it will be us, the public.

Now, how about security? That’s an entirely different problem. Stay tuned.

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Tower Lease Values: Record High Monthly Multiples

More Competition for Tower Leases Means Higher Prices

I get two or more new cell tower lease buyers each month asking to be put on our list for scheduled lease auctions. This is leading to higher prices for cell tower financial assets like leases rights of ways and easements. Sellers are enjoying the ride, but there is an end to the balloon. Maybe not now, but a balloon always pops.

Sometimes it is Best to Try to Re-negotiate Your Lease First

Cell hone carriers are changing their tactics as the cost of constructing new towers as expenses soar with the addition of new technology and stricter regulations are implemented. Carriers need longer commitments so they can take advantage of the growing lack of new towers that other carriers need to fill in their dead spots.

Even if you have 10 years or more left on your original lease, it is my opinion that the lease may be able to be enhanced. With a better lease, the value goes up tremendously and that’s what counts if an owner wishes to cash in. Even if selling a cell tower lease is not an option at this time, a better lease will bring more monthly revenue.

There are no promises, but I think it is worth looking at.

Andrew G Kellerman has a unique financial background in Real Estate, Mortgages and Securities that gives him an understanding of cell tower/rooftop leases that few consultants can match.

He can be contacted at 760) 470-1782 of reached by email at
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