With the continuing and even escalating need by companies like AT&T, Verizon & T-Mobile to add up to a combined one million new cell sites by 2030 for the ever-expanding 5G wireless networks, the need to enter into cell tower and rooftop leases across the United States only increases.
For most property owners, especially commercial property owners such as shopping centers, hotels, and self-storage centers, a cell tower lease agreement can be a perfect source of ancillary revenue that is being generated from areas on their property that would otherwise not be occupied and or used and, most likely, not generating revenue.
If a property owner understands how to correctly structure a cell tower lease agreement, that agreement can be a long-term revenue source that has a ‘Triple A’ commercial tenant such as AT&T, Verizon, T-Mobile, DISH or others that will be paying them each month for decades into the future.
Negative Impacts To Look Out For
That being said – a cell tower lease agreement can have negative impacts on the value of your property if not structured correctly.
Entering into a poorly structured cell tower lease agreement can actually devalue your property by placing certain restrictions on the land and/or building and what you can use the property for going forward.
Also, especially on commercial real estate, a poorly structured cell tower lease agreement can limit the operations that a commercial property owner and its business can perform, not only related to the area being leased by the cell tower company or wireless provider, but on all of the property.
What Is The Correct Structure?
What is the correct cell tower lease agreement structure?
A proper cell tower lease agreement is a cell tower lease agreement that ensures that the property owner is getting properly paid based upon the use of your property and the utility being derived by the cell tower company and the wireless carrier, not just based upon how much space the cell tower company or wireless company is occupying and/or using.
Again, a cell tower lease agreement can be an excellent source of passive revenue that not only generates income today, but for decades into the future, and, if structured correctly, the cell tower lease agreement will not only escalate based upon the scheduled rent escalator, but can be renegotiated several times based upon the cell tower company’s use.
If you have questions regarding a cell tower lease agreement, contact us today.
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