(this article was updated on October 15, 2019)
5G marketing hype can be found on TV, online, and in the news. Yes, the carriers are transitioning to 5G, but it will take time – potentially years to complete all the upgrades. Unlike previous generations of wireless technology, 5G is designed to embrace billions of devices that aren’t handsets. This includes cars, factories, and even cities.
Similar to previous deployments, the technology will first arrive in major US cities before rural America. Think cities that have NFL teams. As of September 26, 2019, here is a list of every 5G city and region for every major carrier in the US.
What Does This Mean For Your Cell Tower or Cell Site Lease?
Rooftop Cell Sites
If you have a rooftop cell site lease this means upgrades are coming. With upgrades comes requests from your rooftop tenant for you to sign consent letters, or to approve plans. STOP!
Don’t approve anything in writing without first having the project reviewed by a cell tower lease expert such as Airwave Advisors.
Often we review tenant’s projects and find that they have either (i) breached the current lease area, and/or (ii) the proposed plans WILL breach the current lease area. Both breaches, as you can expect, are not disclosed by the tenant representative. They just want to get the job done as quick as possible through the path of least resistance. They are looking out for their client’s best interest, not yours.
Upgrades are time-sensitive opportunities for landlords like you. We can capitalize on the opportunity to lease additional area to your tenants and thereby increase the net operating income on your property for years to come!
If you have a cell tower and the language in the lease allows for upgrades, then there may not be an opportunity for you.
Typically, with a land lease agreement, you are leasing them land only and therefore they can add new equipment on their tower at no additional cost.
Exceptions do exist. If your cell tower lease tenant needs to lease more land area from you, they will need to pay to lease the additional real estate.
Another exception is if you own the cell tower (which is rare). If you own the cell tower and if your lease allows it, you can charge the tenant for additional equipment they are adding on your cell tower.
5G upgrades may present you an opportunity to increase your cell tower or cell site lease tenants rent. Cell tower leases and patience go hand-in-hand. The industry moves slow, although it seems fast with constant site upgrades.
When your tenant contacts you regarding any project, have the project reviewed by a cell tower lease expert such as Airwave Advisors. Don’t leave money on the table!
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About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).