What you need to know about cell site leases

Cell site leasing happens every day. Oftentimes, mobile operators or carriers rent spaces on rooftops or land to install cell phone antennas or telecom towers so that they can provide more signal and better coverage to the population. Read more to know about the process, applied regulation and the permissions required.

What is a cell site lease?

Nowadays, the concept of a cell site lease is quite popular. More and more people need to make calls and connect to the internet without interruption. That is why more cell sites are needed to enable this real-time connection.

Operators need the right space — whether it be rural or urban — to install these antennas.

Operators usually build antennas or towers on third-party properties, signing lease contracts with the landowners. The owners, in turn, receive a periodic rental payment in exchange for the installation of the tower or antenna on their parcel of land or on the roof of their building. This is a common practice.

This arrangement can be beneficial for both parties for a period of time, as the operator can then deploy or expand its network and provide coverage to more users, without having to purchase the land to install the antennas, while the land or building owners benefit because they, on the other hand, receive a periodic rent for as long as the contract is in place.

The importance of location

A key element for network deployment is the location of each cell site. Operators know where they need to install the cell sites, which can be in rural or urban areas.

When mobile operators decide to deploy or upgrade their network, time is of the essence. They must start right away to be able to offer the best service possible.

Aside from the site conditions to install the cell sites, different factors affect the future lease contract between the owner and the operator. These factors include interest rates, the number of operators that will be physically on the site, inflation, current bandwidth, the rent to be paid and various other considerations.

Cell sites regulation

The installation of new cell sites falls under the responsibility of the Federal Communications Commission. This commission is the organization that defines the criteria for the location of antennas as well as the characteristics that individuals must comply with for their installation, authorizations, land use permit, etc.

The municipality’s construction department must authorize the installation and ensure that is in compliance with the established requirements. This affects installations on both rural land and urban buildings.

How much do operators pay for installing an antenna or a cell phone tower?

Before starting the process of leasing land to install an antenna or a cell phone tower, the first question a landowner may ask is how much money operators will pay. The answer is that this will depend on the factors mentioned above and subsequent negotiations.

Once a landlord has entered into a lease with an operator, they then  have an alternative to the non-guaranteed rent offered by the operators.

This alternative is also known as a lease buyout. It consists of offering the landowner an upfront guaranteed lumpsum in exchange for the right to manage the lease contract, and receive the rent associated with the contract for a determined period of time.

This alternative applies to parcels of land as well as to urban buildings, and condominiums alike. Whenever there is a lease contract associated with the antenna or a cell site, an agreement might be made to purchase the rent associated with the site.

The terms of the agreement are agreed upon with the necessary legal agents, so that both parties can be certain that everything complies with the established regulations. This ensures that the owner can exercise the right to sell their land or real estate in the future in a normal manner.

Although the risks associated with the lease of the antenna or cell site persist, either because of a possible dismantling or a future decrease in rent, with a lease buyout, the owner no longer assumes those risks. APWireless accepts them thanks to its diversified portfolio of assets.

Do you have any questions about how a cell site leases, how suitable your property may be for a cell site or, if you are an existing cell site owner, do you want to learn more about the asset located on your property? Contact APWireless by calling 888 232 2740, or visit www.apwireless.com, and one of our Acquisitions Directors will advise you on your cell site or lease.