How 5G Will Impact Your Cell Tower Lease
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. T-Mobile is building 5G out in 30 cities, and its customers will be able to access it in 2019 around the time the first 5G phones become available.
What Does This Mean For Your 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. Don’t do either without first having the project reviewed by 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. Upgrades are opportunities for landlords. Opportunities to lease additional area to your tenants and thereby to increase the net operating income on your property!
If you have a cell tower and the language in the lease allows for upgrades, then there may not be an opportunity. 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 they need more land area from you, they will need to pay for 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 may present you an opportunity to increase your tenants rent. Cell tower leases and patience go hand-in-hand. The industry moves slow, although it seems fast. When your tenant contacts you regarding any project, have the project reviewed by a cell tower lease expert such as Airwave Advisors.
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