(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!
Cell Towers
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.
Conclusion
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).
Nick
Thanks always a good read.
Peter
Hi Peter,
Thank you sir. Always good to hear from you.
Nick G. Foster
Hello! We bought a property with a cell tower on it. Come to find out the previous owner sold the rights to the cell tower company for access. If the cell company decides to do any upgrades like install 5g antennas can we as new owners decline? What are my rights?
Hi Vanessa,
You will want to review your cell tower lease agreement and any associated legal instrument, such as a grant of easement, or a lease assignment document, to understand what rights were transferred to the party who now receives the benefits of the cell tower lease.
Nick G. Foster
I have a cell tower lease that gives a yearly payment. On the property is a second tower that is self owned. It has been used for two way radio communication, ham radio communication and previously for paging communication but not cellular signal. Is this tower a possible income opportunity by leasing out? Who would contact for a site review?
Hi Melissa,
Without reviewing the tower, I can’t say for certain if the tower has the height and the structural integrity to accommodate a cellular tenant. However, I wouldn’t recommend spending money on a site review. If the tower is of interest to a cellular tenant they will contact you. If they had to structurally reinforce the tower to handle their load, they likely would. I have AT&T doing just that right now on a client’s tower. If I was in your shoes I would just sit tight. They will come if they are interested.
All the best,
Nick G. Foster
I have a tower lease that renews in 7 years. Crown castle is asking for the new lease to be signed now. What do you charge to review the lease and make recommendations?
Hi Mike,
It was good speaking with you regarding you expiring Crown Castle cell tower lease. Please feel free to give us a call at (888) 443-5101 with any further questions.
All the best,
Nick G. Foster