Wireless Leases

 

Wireless telecommunications tower and antenna leases and rooftop antenna lease are unique in the real estate industry.  The telecommunications company tenant can terminate the lease at almost any time with little or no penalty.  These unilateral termination rights are standard in wireless leases and apply to 95% or more of all wireless telecommunications leases.  The leases are also unique because wireless companies bind the Property Owner to unusually long terms of five years, with four, five or more renewal options of five-years each.

 

The reason for this unique, one-sided termination right is because wireless telecommunications technology is changing so rapidly that even the wireless companies cannot predict when new technologies will eliminate the need for towers; consequently wireless companies cannot risk being locked into long-term leases.

 

There are a variety of reasons a wireless telecommunications carrier may need to terminate its lease. For example, the following all play a role in wireless site coverage design:

 

         Consolidation within the wireless industry, like the merger between Cingular Wireless and AT&T Wireless is likely to eliminate the need for hundreds of antenna sites;

 

         Changes in the need for a particular site due to the installation of more efficient antennas;

 

         Satellite phones will have a substantial negative impact on the need for towers;

 

         Changing zoning and land use planning; and

 

         FCC licensing issues.

 

It is also important to note that in this unpredictable industry there is no guarantee that any company, regardless of size, will be successful in maintaining its profitability and stay in business. These forces and others demand that carriers continually re-evaluate and re-engineer their systems.