Rooftop Cell Site Development Increases
Rooftop cell site development in the United States has increased each year for the last three decades. With recent 5G expansion and new carriers such as DISH Wireless coming to the market, the result is the need for rooftop space for the installation of new 5G equipment.
As of January 1, 2022, there were approximately 500,000 cell sites in the United States, with up to another 1,000,000 new sites to be added by 2030.
AT&T, T-Mobile and Verizon are all in a race to build their 5G networks not only in larger urban areas, but also in smaller communities.
Benefits of Hotels as Cell Sites
Many hotels are among the tallest buildings in the immediate area. Ground elevation is crucial for telecom equipment placement, which makes your hotel potentially a prime location for a cell site installation.
Hotels owners are looking to add additional ancillary revenue, and a rooftop cell site can do just that. However, one common mistake that hotel owners make is trying to determine “cell site market rents”. There is no such thing as cell tower market rents.
There is no one-size-fits-all answer for cell tower or rooftop leases. Some cell site leases pay a few hundred dollars a month, while others garner their rooftop landlords several thousands of dollars a month.
What Determines The Cell Lease Rate?
Several factors come into play, the amount and exact type of equipment that a wireless carrier is installing and how it benefits their wireless network in the immediate area; access to alternative sites and the differences between those alternative sites and yours; the population density in the area and the related constant and variable of the wireless usage in the area.
Every cell site has its own individual value, and understanding what you are offering the wireless carrier is crucial.
The next factor a hotel owner should consider in maximizing rent is the amount and configuration of the space that is granted for the cell site. For example, if Verizon is leasing your rooftop, and you can add T-Mobile and AT&T, then you have potentially tripled your rental income from your rooftop space.
Factors To Consider
A hotel rooftop usually has enough rentable space for multiple cell site tenants, so make sure you do not sign an agreement that doesn’t allow other wireless carriers occupancy and use of your property.
Lastly, understand how to structure a rooftop cell site lease to be able to renegotiate based upon what an AT&T, Verizon or T-Mobile has on your roof rather than how much space they are occupying. How do you do this? Place a gate in the lease. What does this mean? A rooftop cell site lease should require consent for cell site modifications. This cell site lease “gate” allows you to bring the wireless carrier back to the negotiating table whenever the wireless industry evolves.
A good rooftop cell site lease garners a hotel owner additional revenue, but great rooftop cell site leases not only garner a hotel owner a source of rent, but unlimited upside gain based upon the value the wireless carrier adds over the life of the cell site agreement.
If you have been approached for a new cell tower lease agreement, or have an existing one, don’t take on the cell tower companies without assistance. Remember, the cell tower companies have experts working for them, shouldn’t you?