Cell Site Buyout
Our team has completed several million dollars of buyout transactions and understands the complexity of closing these personal property sales.
Here are 5 reasons why you should consider selling your cell lease today:
Technology is ever changing. What is the likelihood your tower is there in 10 years, 20 years?
We’ve all heard about the 5G rollout. Would you believe 6G is the next push? That’s right, 5G isn’t even deployed and yet carriers are working on the next technological advancement, 6G. As speeds increase and equipment gets smaller, macro sites are in jeopardy of being obsolete. Cell lease pricing provides for a lump sum prepaid rent between 12 to 15 years.
Your tenant has the unilateral right to terminate with a 30-day notice.
Most Landlords believe their leases have 20 to 40 years of lease term. In reality, the Tenants have the unilateral right to terminate the lease with as little as 30 days’ notice. If the Tenant terminates the lease, it’s virtually impossible to replace them. The “free money” you became accustomed to evaporates forever.
Could you use a lump sum of cash now?
One of the greatest lies is, “I don’t need the money”. You would never hear John D. Rockefeller say that. No matter what your economic status, you can always use a grip of cash. We work with clients for estate planning, partnership dissolution, etc. Many of our client’s opt to complete a 1031 tax deferred acquisition or take advantage of capital gains treatment.
Circumstances can change. Where will you be in 10-15 years?
Life happens, many times when you least expect it. Selling your lease is one less thing you need to be concerned about. Many clients are also under the misbelief that selling the cell lease with the real estate will entice a buyer or they will achieve maximum value. Which is pretty much untrue. We have closed sales with real estate buyers that are buying real estate with the cell lease in place. We then close the sale of the cell leases right after the real estate closes. The buyer receives the bulk of the financial benefit.
Is the tower company paying you more than they receive?
A couple of years ago, Verizon and AT&T sold their towers to American Tower and Crown Castle Tower company’s respectively. The transaction involved a master license agreement between the carriers and the tower companies. The financial terms were homogeneous and they pay the same rent and escalations for each site. Many of the sites are extremely profitable and others have negative cash flow. If you are receiving more rent than the carrier pays the tower company, your site is in extreme jeopardy and risk of decommissioning.