In exchange for the use of space, the telecommunications provider (also referred to as a tenant) agrees to pay the landowner (a monthly or annual) rent.
[1] Telecom leases can be excellent sources of ancillary income, in some cases providing the landowner with thousands of dollars per month.
Proposals for new cell towers sometimes face public opposition in zoning proceedings from residents who raise aesthetic objections and fear health hazards.
[14] Generally, cellular providers look for property that is in a densely populated area and that falls outside of a five-mile radius from the nearest tower.
This specific portion of a telecom lease is due to recent mergers in the industry, which render some towers useless.
Determining the fair market value of a cellular lease is difficult for most landowners due to a lack of available information.
Converting a wireless lease agreement to a Telecommunications Easement is the safest way to perform a Prepayment or Buyout for all involved.
However, purchases can be structured in many ways, with the most common outlined below: – Perpetual Easement – These transactions are typically for a period of 99 years, with the option to take additional 99-year terms for a small consideration.
Investors historically try to avoid these types of transactions unless the potential for upside outweighs the risk of the Landlord defaulting on the property.
Mass deployment of Fifth Generation cellular technology (5G) has the potential to impact rental income streams paid to property owners, especially in densely populated urban areas where multiple 5G nodes or small cells could render a macrocell site obsolete with emphasis placed on cell sites with higher rental payments.
Some necessary considerations for cell tower lease buyout transactions are:[citation needed] The challenge of selling a cellular leasehold is the acquisition market is highly unregulated.
Lease Acquisition agents can modify and deliver information to the landowner to acquire leaseholds at a highly discounted price.
Similar to the oil barons of the 1800s, these agents are compensated heavily to obtain these rights, and often the underlying value of expiration and an expanded sale market is shielded from the landowner.