Wireless Ground Leases - Q&A

[William Jenkins]

I develop wireless towers for the major carriers in the Midwest, and recently joined the bigger pockets community.  I have been in the business now for about 10 years and I though I would share a little of what I know about the business for those of you with existing or potential future wireless tower/rooftop leases. 

There are obvious limitations regarding what and how much detail I can provide in response to your question(s), but let me know what you have for me.  I look forward to seeing the questions.         

[William Jenkins]

There are a couple of dynamics that are currently going on in the market that I can speak to:

When I first entered the business in 2005 there were many more wireless carriers than there are now.  Since 2005 the industry has consolidated to the "big 4," being Sprint, Verizon, AT&T, and T-Mobile.  The empty towers you are referring to are likely remnants left from the AT&T/Cingular buyout, Sprint/Nextel buyout, or a number of other smaller deals that have taken place over the years.  When these companies merged, they would sometimes decommission their equipment on a redundant tower. 

So the big question is what does the future hold...........

In general the wireless business has moved from voice (selling mins) to data (selling GB).  In the beginning days of wireless the carriers needed tall towers spread across a geographical area so they could offer "coverage."  Their main goal was to cover as many people as possible with a site.  For this, think tall tower with large coverage area.  In todays world the carriers are generally working on what we call "capacity."  When I say capacity, think bandwidth and ability for many users in a concentrated area to utilize the services of a tower.  In order to offer capacity, the carriers are now needing an increased number of sites, generally lower in height, in areas that are very close to where the users are (downtown areas, shopping malls, busy intersections, etc.).  These are all areas where "coverage" may already exist, but additional "capacity" is needed because of the number of people in that area. 

In terms of opportunity from a ground or building owner standpoint, there will certainly be opportunities available to lease ground or rooftop space to these carriers in the future.  Future opportunities will be more skewed towards large metropolitan condensed populations, although there will still be some opportunity for those in more rural areas where coverage is needed.