What if you could build one piece of infrastructure and collect rent from Verizon, AT&T, and T-Mobile for decades?
In this episode of JackQuisitions, Jack Carr breaks down the business of developing cell towers and why he regrets not getting into it years ago.
Jack covers the startup costs, revenue potential, 80%+ site-level margins, long-term carrier leases, and why a tower with three tenants can potentially generate around $80,000 per year in site rent. He also explains the biggest mistake new developers can make: building the tower before finding demand.
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In this episode, Jack covers:
• How the cell tower business actually works
• Why carriers rent space instead of owning every tower
• The economics of a $275,000 cell tower
• How three tenants can generate around $80K per year
• Why site-level margins can exceed 80%
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I've made a lot of business mistakes, but my biggest business mistake was not buying this business. I'm talking about cell towers because there is a business out there where you can spend a few hundred thousand dollars to build a giant metal pole, rent some space on that pole to companies like Verizon and ATT and T-Mobile, and you can collect checks from them, mostly passive, for absolutely decades. Because a well-located cell tower with three tenants can potentially generate around 80k a year in site rent and have margins north of 80%. But before you just go out there randomly buying land and putting towers on it, there's one thing you need to understand about this business. And by the end of the video, I'm gonna show you exactly why the best cell tower developers don't actually start with the tower or even start with the land.
Most people assume that Verizon and ATT, they own all these towers. Well, they don't. But there are giant independent tower companies like American Tower and Crown Castle, whose business is basically this vertical real estate. They control a site and a lease and then they lease different sections of the tower to different wireless carriers. Think of it as like an apartment building for antennas. Verizon might rent the space at the top, and ATT rents beneath them, and Team Mobile rents another section
down. And this is where the economics get super interesting because American Tower alone has published illustrative examples of a US macro tower that costs them $275,000 to build. And with one tenant, that example produces $20k a year in revenue and around $8,000 in gross margins. You might be thinking, dude, Jack, that honestly sucks. But you add a second tenant and the total revenue jumps to 50 and the operating expense doesn't move, right? There's no extra work that needs to be put in it. So now the gross margin is roughly 37,000. And then you add that third tenant, and the tower becomes 80,000 in revenue with 66k in gross margin. So that's 83% site level gross margin. That's the entire business. The land's already leased, the tower's already there, you built a fence around it, the road already goes up there. Almost all of these are long-term leases. So like they're non-cancelable, and the US leases they have escalators built in around 3%. So imagine this: like Verizon comes in, they buy a long-term lease, their rent increases every year. It doesn't matter whether they they need to redesign and leave, they still have to pay, which is super different from buying an apartment complex where you're hoping Chad is gonna make rent this
month. There are giant catches to this business, and the first is customer concentration. Like Crown Castle says that Team Mobile, ATT, and Verizon represent 90% of their revenue in 2025. So yes, they're enormous companies, but these three whales make up 90% of your customer concentration. If you lose one, you lose 30%. That being said, they're they're in long-term contracts, so it's mostly a non-renewal that you'll see coming, but still like bad news if they don't renew. Second, location is everything, and it's the key to this business. You can't just find a cheap piece of land on the side of the interstate and go, cell phone tower there, I'm gonna make 80k a year. You know, these carriers they have engineers deciding on where their networks need coverage and where they have gaps and they have capacity concentration problems. And so, like, the tower needs to solve an actual networking problem. You need to be understanding of that to be able to buy the right land and put the tower in the right spot. Third is zoning, right? You can't just go and throw up a tower next to anything you want. People love cell towers when they get service, but they don't love living next to cell towers. So town can spend years claiming about terrible reception, but at the end of the day, when someone builds that 180-foot tower next to it, you're gonna start getting complaints. Not to mention you have engineering, FFA considerations, environmental issues. Lastly, this isn't a $10,000 side hustle. The opportunity for a small entrepreneur isn't becoming like the next American tower or a castle, it's developing individual towers and securing some anchor tenants, adding a few co-locations and eventually keeping the cash flow and selling to a large drop or like sell to the American later on. They can get some great multiples on this business. I I love this business. I missed out on this a long time ago and I regret
it. And if I wanted to start this business now, I wouldn't start by buying the land. And I would definitely not start by buying the land and building a tower. I would start by finding the demand. I would identify like where the carrier actually needs coverage and secure control of a suitable site through maybe an option or a ground lease. I'd get the zoning and double check what the zoning and permitting is, see if I can grab that before. And then ideally, I'd have an anchor tenant committed before I spent the first dollar on the tower. So I have the lease, I haven't spent any money on the tower. I have a low monthly pay payment on the lease, and then go out, find the tenant, build it. Day one, I start making
money. That's why I like this business, though. It's boring infrastructure, and it's somewhat one of the few like passive, actual passive income opportunities. Is once that's all set up, you gotta mow the grass, probably check a few things every couple weeks. But really, the amount of problems that you're going to get from the towers are extremely minimal. If you had do own one of these, and I am way wrong, and you're saying, Jack, there's so many issues, you don't understand the amount of issues. Please comment. Write me a DM. I want to know about this. This is super cool to me. If you like what you heard, if this is interesting to you, like, subscribe, follow so I can keep making this content. Comment below if there's another passive income business that you want me to deep dive, and I'll see you next time.
