In the U.S., consumers collectively look at their smart devices more than 9 billion times a day - up 13 percent from 2016. Smartphone sales continue to be strong, with penetration up 10 percent annually, mostly with the consumers over 45 years old.
Smartwatches have penetrated 12 percent of the mobile U.S. consumer market, according to Deloitte. Their growth is affecting all telecomm subsectors, including cell tower leasing and infrastructure.
Unlike the traditional phone industry, the wireless telecommunications industry is less centralized and more complex. It also has its own lingo.
For example, the installations are referred to as cell towers, rooftop antennas, small cells, or distributed antenna systems. The wireless telecommunications agreements are typically referred to as cell tower leases but might also be termed ground leases or rooftop leases. For this article, the installations will be called cell towers, and the agreements will be referred to as cell tower leases.
The cell tower lease marketplace is a fragmented group of disconnected transactions, which often is related to a real estate transaction. This property niche is riddled with limited resources, is purposely disorganized, and suffers from an almost complete absence of reliable industry-specific information.
At a time when people nationwide can go online and locate numerous qualified, interested, and competing parties for the purchase, sale, or management of a piece of property, this has not been true for completing a cell tower leasing deal. This applies to the purchase, sale, or management of this lease. Here are the four most common reasons why.
Carriers and tower companies guard proprietary information. Tower companies and carriers manage the majority of real-time information about cell tower leases, including monthly or annual lease rates, annual or periodic escalators, or variations in cell tower lease values by market. These cell tower lease details generally are not disseminated to end-users or real estate professionals.
Industry and market-specific cell tower leases have variable market conditions. Unfortunately, several industry and market-specific variables relate to cell tower leases, such as prospective carrier mergers, new tower construction, or emerging technologies. These variables usually are not available with the click of a button, making it tough for real estate professionals to accurately determine lease values as part of a real estate transaction.
Marketing and advertising cell tower leases and lease-related properties do not have a central marketplace. Cell tower leases often are listed for sale by Realtors either with or without real estate and are advertised on real estate-related websites; on classified advertising sites; or any of the many national multiple listing services. Unfortunately, none of those methods is appropriate to effectively reach groups of competitive cell tower lease buyers.
Also, Realtors with limited cell tower lease experience market may misunderstand their lease values. This environment makes it difficult to understand the nuances of purchasing cell tower leases with or without the real estate.
Relatively few cell tower leases and associated transaction events occur. While the total number of cell sites is ever-increasing, most industry experts estimate about 325,000 cell towers or rooftop installations, with a higher number of leases because of the multiple tenants that exist on many cell sites. Compared to the total number of commercial and residential properties in the U.S., the total number of properties with a cell site is estimated to be a small fraction of 1 percent.
However, the number is increasing exponentially with the deployment of small cells and distributed antenna systems. More than 1 million more sites are expected during the next few years.
For this niche, the changes in technology and the new, untested legislation to implement 5G technology, it's time to consider creating a truly centralized marketplace for all cell tower lease transactions. Perhaps it also is time to build a cell tower lease marketplace to provide more revenue opportunities for both commercial real estate professionals and attorneys.
Only time will tell if commercial real estate and legal professionals will recognize the needs, benefits, and solutions such a marketplace would provide.