Monthly Archives: March 2019

Cell sites are locations where antennas and electronic communications equipment are located to create a cell in a mobile phone network (cellular network). Cell sites are normally erected on property that is not owned by either tower companies or wireless carriers. Tower companies and carriers gain access to property through a lease or license with a property owner. Property owners have discovered profitable returns in building and leasing cellular towers on their properties.

Many cell site antennas are mounted on buildings rather than on towers. Some towers are hidden inside artificial trees, preserved trees, or structures that look like sculptures; they are referred to as concealed sites or stealth sites. Many cell sites are on roof tops, and many of these are stealth in form. Sometimes antennas are located in church steeples and mock chimneys.

A site hosting just a single phone company may house several base stations, each to serve a different air interface technology. A site is composed of a tower or other elevated structure for mounting antennas and one or more sets of transmitter/receivers transceivers, digital signal processors, control electronics, a GPS receiver for timing, regular and backup electrical power sources, and shelter. Cell towers always set aside part of their available bandwidth for emergency calls.

Cell sites are grouped in areas of high population concentration, with the most possible users. Cell phone transfer through a single tower is limited by the tower’s capacity; there is a fixed number of calls that can be handled at once. This constraint is another aspect affecting the spacing of tower sites. In low density areas towers are usually spaced 1-2 miles apart; within dense metropolitan areas they may be only 1/4 to 1/2 mile apart. Each tower overlaps other cell sites.

When phones are moving from place to place, they also have to change from site to site. Cell tower sites are linked to phone exchange switches, which connect to the telephone network or another switch of the cellular company. There is multiple independent access in each tower, so an early stage of handoff is to reserve a new channel for the phone on the new base station which will serve it. As a phone user repositions from one vicinity to another, the switch routinely commands the phone and a site with a stronger signal to go to the new frequency; it then moves from the channel on its current base station to the new channel. When the phone responds through the new site, from that point on communication takes place from the new tower.

For property owners, sites can add considerable value to their property, and in some cases the site is worth more than the property itself. In recent years, a large number of companies have formed with the singular purpose of acquiring these leases from property owners. These buyout companies offer lump sum payments to property owners for both rooftop and tower sites. This can be a viable option for site owners that want to cash out their leases.

Q: Who are the carriers who could likely present me with a cell tower lease to be negotiated at my property?

A: Generally the wireless carrier will not present you directly with a cell tower lease. One of their wireless site acquisition or real estate managers will usually contact you first to gauge your interest level. You want to make sure before entering into a cell tower lease agreement with any of the wireless carriers doing business (ATT, Sprint-Nextel, US Cellular, Metro PCS, ClearWire, Verizon Wireless, Alltel, T-Mobile) or sign a contract with any of the large tower development or rooftop management companies (AAT, Crown, American Tower, SBA) that conduct your due diligence, but don’t wait too long.

Also if you’re lucky enough to be contacted by any of these firms, make sure that your you or your lawyer don’t negotiate yourselves out of a cell tower lease. Often times attorney’s start marking up a lease agreement just to get billable hours. If carriers have to waste a lot of time going back and forth they will move onto another site that’s willing to do business, and then you will wind up looking at the site instead of collecting rent from it.

Q: What should I look for in my cell phone tower lease?

A: A properly executed cell tower lease should protect your ground space rights, rooftop space rights and address subleasing / subletting issues that many cell site owners often time miss. It will also include tax language to protect you from assessments. Also, it is crucial to properly develop the site (height of tower and available ground space) to allow for expansion and collocation which will increase revenues on the cell tower. All cell tower lease exhibit drawings should be completed by a state licensed architectural engineering firm. I could write a list of a dozen things that seasoned real estate attorneys miss regularly on cell tower leases, but then where’s the fun in that?

Q: I don’t know anything about zoning or construction project management, should I even bother with getting a cellular site built on my building’s rooftop?

A: The carriers will not select your site if it is not feasible for development from a number of aspects, mainly zoning, and land use perspective. Only enter into a cell tower lease that puts the burden and expense of obtaining permits and approvals on the carrier or tower company, not on you the Owner/Landlord.

Q: What if cell towers become obsolete? What happens then?

A: Carriers are heavily invested into the development of the wireless network. Over 70% of the U.S. population uses cell phones. So if you hear rumors about a balloon or blimp or satellite being used for cellular technology don’t be fooled, cell towers are here to stay. We didn’t stop using Sony Walkmans either, they just call them iPods now, but people will always want to have personal music players, and the same holds true for personal communication devices.

Q: How long will my cell tower lease be good for?

A: When you sign a cell tower lease the lease term will be initially for 5 years with two renewal terms in most cases, and an additional ten year term after that. Since no one has a 35-year cellular tower lease as of yet, we can’t say how long they can be extended for, but assume that your cell site leases will be extended for as long as you own the site and people need to speak to each other on wireless devices.

Q: How much can you get for your cell tower lease?

A: Isn’t this always the big question… And our answer is that it depends how badly they need your site and where you are located. The closer to the heart of a major metro area, the greater the demand for wireless coverage and capacity will be, and the more you can get. Rooftop sites vary from ground leases. For example in Columbus, Ohio you might get $1,100 per month each for three carriers on your rooftop totaling $3,300 per month. While if you had a cell tower on your property in the same city you might get $1,200 for the first carrier who built the tower, and to additional carriers pay rent to the first carrier to co-locate on their pole, and then each pay you $900 for ground space rights, or a total of $3,000 per month.

Q: Shouldn’t My Attorney Be Able To Guide Us?

A: A cell tower lease is a very intricate and specialized contract that is weighted heavily in favor of the cellular carrier. But think about it, it needs to be. Getting a cell tower built on your property is like having Donald Trump saying, “I’d like to have a small portion of your ground space, and I’m going to build a structure on your property that costs hundreds of thousands of dollars at MY expense, and it can potentially bring you $1-2 Million in rental income over a 25-30 year period if we can develop it properly. But I’m only going to do this if the contract protects my investment. And if you don’t like it, no hard feelings, the guy next door has 2,000 square feet of space and could use the retirement money.”

Now nothing against Mr. Trump, because he is an icon of success, but if you were going to sign a deal with him would you use an average attorney or get a top-gun attorney? And that’s where we run into a shortage of talent in the marketplace. Those who can afford it hire a specialized cell tower lease attorney, those who can’t cross their fingers and hope that they are getting a good deal.

That’s why cell tower development and leasing on your own is a challenge and why property owners who can find a partner to work with are well served in both the short and long term.

Q: How can I get a cell tower lease signed for a tower on my property or antennas placed on our roof?

A: Having an uncle working in the real estate department at one of the carriers is your best bet. If that’s not an option, submitting your site to the carriers directly gives you roughly a 1 in 1,000 to 1 in 10,000 chance for site selection.

Here’s our insider secret to getting a cellular carrier interested in your site, revealed for the first time anywhere. First, pray to the gods of Radio Frequency. Then print up a dozen or so 18 inch x 24 inch “bandit signs” on your property that say in bold letters “I Want a Cell Tower On My Property.” Your neighbors will probably steal them, but keep them posted on your property in a visible area. If a site acquisition consultant happens to be driving that way, you should get a call.

Last Question… (Extra Credit)
Q: What’s the difference in signing a cell tower lease at $2,000 monthly with 2% yearly increases vs. the same monthly rental amount at 3% early increases over a 25-year cell tower leasing term?

A: The difference is $132,000 over 25 years. WOW!! Are you happy or are you kicking yourself?

Lightradio, the new technology that Alcatel-Lucent recently unveiled. In a nutshell, Lightradio technology uses components that are much smaller than those used in cell towers today. Furthermore, these components have the capability to be placed almost anywhere (walls, poles, roofs, etc.) to provide wireless communication.

Naturally, this development is fueling speculations that cell towers are approaching the end of their time, which will have a major impact on Leaseholders. The reasoning used is simple – because Lightradio equipment is much smaller than what are being used now, they won’t need as much space on the tower anymore. And since they can be placed virtually anywhere, some cell towers may even be rendered useless.

If you’re wondering how probable that can be, perhaps some more detail regarding Lightradio will help.

Lightradio technology basics

Lightradio technology is designed to replace two main components of a cell tower: the large cabinet-like structure at the base of the tower known as the base station, and the protrusions near the top known as the antenna elements. In their place will be two small devices that can each be held on the palm of one’s hand.

One of these devices is the baseband chip, which will take care of processing tasks that are done in the base station in the current set up. The other device is the Lightradio cube, which will function as an antenna with power amplifying capabilities.

One cube can work on its own or it can be stacked together with other cubes to form different kinds of cell sites such as macrocells, picocells, and femtocells. In addition, whereas today’s cell towers typically house separate cell antennas each supporting a different standard such 2G, 3G, or 4G, a single cube can already support all of them.

As a result, when a cube or a stack of cubes is placed on a tower, the space they’ll occupy will only be about one-third or one-fourth of the space currently occupied by today’s antenna elements.

There’s more. Remember those baseband chips mentioned earlier? They don’t have to be placed anywhere near the tower anymore. Instead, they’ll be made part of what is known as a cloud network. That practically gets rid of those bulky base stations.

So assuming the wireless companies are going to implement this technology, does that mean we’re going to have to say goodbye to those towers?

How will it affect the future of cell towers?

If we look at it from a business perspective, it wouldn’t make sense to just take down structures that cost Billions of Dollars to build. Besides, the tower companies have also already committed billions of dollars for their next build outs. They couldn’t just scratch that out just because a new technology has come along.

From a technical perspective, getting rid of towers is the last thing you’d want to do. All of the data that goes to your wireless devices, including smart phones, tablet PCs, pocket PCs, laptops, and even USB dongles are carried by radio waves.

Now, radio waves lose their intensity whenever they pass through walls, foliage, people, ceilings and other obstructions. The closer the source of these radio waves are to the ground level, the more obstructions they’ll encounter before they can get to your devices.

So, excluding indoor areas, where’s the best place to put those cubes in order for the waves coming from them to meet the least amount of obstructions? That’s right. Up there on those towers. Sure you can place cubes inside buildings or along side streets but you’ll still have to position many of them on towers in order to achieve maximum coverage.

In any business, the aim is to maximize the use of existing infrastructure to accommodate upcoming ones. Thus, the only logical and prudent approach would be to continue using those towers by mounting those Lightradio cubes on them.

How will it affect cell tower leaseholders?

Leaseholders are constantly bombarded with offers from different companies to acquire their lease. Since this new technology has gained worldwide press, many companies are using this information to get Leaseholders to “sell now versus holding their leases until they become valueless”.

With that said, most Leaseholders have heard similar stories from Salespeople regarding mergers, DAS and Femtocells as reasons to sell now before they are left with nothing. Overall, most leaseholders are doing their due diligence and consulting professionals before they make a major decision which will impact them for many years to come. As a whole, Leaseholders have become much more educating regarding the cell tower industry and they are doing their homework before they make any decisions regarding their cellular leases.