Rooftop Leases – What You Should Know

Does the lease restrict the disposition of the property? Most wireless carriers will try to limit the property owner’s ability to sell the property and assign the lease to a new owner, and may even ask for a right of first refusal. This may not be a huge concern for a cell tower site carved that is part of a very large undeveloped area, but it can present several issues for an owner of a commercial building or other similar development. A building owner should consider the pros and cons of acquiring the ancillary income against the burdens of unwinding or working around this transaction, if necessary, to dispose or re-finance the building or property.

What equipment should be allowed on the rooftop? Wireless carriers are constantly working to not only maintain, but to expand their wireless networks. Cellular companies are implementing various telecom technologies, which have the purpose of not only handling their customers’ calls, but to also maintain the ever-expanding data usage needs. A building owner should clearly understand what is actually being installed on their building and how that will impact them not only today, but also well into the future.

What possible interference issues may exist? Building owners should understand the possible interference issues that may exist with the installation of wireless equipment on their property. This interference is not limited to telecom equipment used by the occupants of their building, but also the critical building systems necessary for the operation of their facility (HVAC, electrical, CATV and other systems). Improved wireless service can make the property more attractive, but a property owner should not risk more important revenue streams by allowing interference with the daily operations of their facility and, more importantly, their other tenants.

Will property development be limited due to the lease? Building owners should fully understand not only what they are getting in the way of rent from a rooftop lease, but also what they are giving up in exchange. A building owner should not tie their hands for future development and alterations to existing structures. Property owners should negotiate relocation provisions or termination rights in order to retain flexibility for future development and alterations.

What kind of access is required for maintenance? Wireless carriers will demand 24/7 access to their equipment and, as a result, 24/7 access to your building or structure. A property owner should limit access to normal business hours, with only additional access being granted in the case of emergency situations. This is especially the case if a facility is located on the roof of a commercial or residential development with multiple occupants. The property owner should not only limit access, but require the owners’ agents be part of any work performed by the wireless carrier, so as to not cause interruption to their building’s operations.

Will the rooftop lease cause structural issues? Property owners need to make sure that the rooftop equipment is properly installed and does not damage the roof or any mechanical equipment. An inherent in rooftop leasing is the physical attachment to the roof or other portion on the building. Be careful, as the wireless carrier’s installation may void roofing warranties and, in the worst case, may cause rooftop leaking or collapse.

What is my rooftop site really worth? Building owners understand their bargaining position in the negotiations with a wireless carrier. Two rooftop properties located right down the street can have measurably different values to a wireless carrier looking to establish a wireless network in that area. To understand the value of their rooftop site, a property owner needs to understand the site’s value for telecom purposes, and not as much for conventional real estate purposes.