One of the top cell tower leasing questions asked by property owners when negotiating a cellular carrier lease is the big question concerning the future of cell towers. What will happen to rental income in 10 years if we don’t need cell towers anymore? What’s going to happen to my cell tower if cell towers become obsolete? If cell towers become obsolete what happens to your cell tower lease?
Cell Tower Obsolescence... It’s a legitimate question that keeps many wireless landlords awake at night, but rest assured, that over the next decade at least 100,000+ additional macro cellular towers and cell sites will need to be built across the United States to keep up with demand. Chances are 99% certain that your cell tower leases won’t be terminated due to technology changes before. We are stressing this for cell towers in rural and suburban areas. We see that many more towers will remain while advances in technology, namely the deployment of approximately 500,000 to 1,000,000 5G antenna nodes will eventually impact rooftop cell sites in the big cities with densely populated urban areas. We predict that by 2035 approximately 80% to 90% of urban rooftop cell sites will become obsolete.
Simply put, your cell phone is slowly becoming a television, personal computer, personal music device and mobile phones, email and web surfing device. Cell phones and cell towers are here to stay. The Internet of Things IoT is also going to drive demand for additional capacity and coverage. In our opinion, the majority of cell towers are not going to be replaced by a weather balloon, little 5G repeaters on top of wooden telephone poles also known as small cells, satellites or anything else in 95% of the USA's territory. Nations like Finland and Hungary in Europe have cutting-edge world-class wireless networks and are about 7-8 years ahead of the USA, and they aren’t taking down or replacing any cell sites yet. Emphasis on the word YET. Now in 2021 we see changes coming in the urban markets in the next 5 to 10 years that could impact rents in the urban areas.
Here in the USA, many of the cell tower leases signed in the late 1990’s are being re-negotiated prior to their expiration and extended because the carriers need these sites. When entering into a cell tower lease agreement the initial term will for 5 years and they’ll usually offer four 5-year renewal terms so you can expect to be receiving rent for 25 years.
We suggest not to worry about whether or not cell towers become obsolete in 10 or 20 years, but to seize the moment, and make sure you don’t waste time making a decision about your cell phone tower lease. If you blink to long you’ll lose the site to one of your neighbors.
Have you been contacted by a cell phone company about putting antennas on your building or about putting a tower on your property? We can review your cellular lease agreement in 24 hours and help you to get the upper-hand in the lease negotiation process with our consulting and transactional coaching service.
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