Five years ago I wrote an article covering Cell Tower Lease Buyouts. We are long overdue for an update!
Here are 2019’s seven things you should know regarding Cell Tower Lease Buyouts!
- Unsolicited offers to buy your cell tower lease are often as much as 60% below market.
If you receive a phone call or letter in the mail to purchase your cell tower lease, nine times out of ten it will be below market. Why? Because the individual reaching out to you is typically paid commission which is calculated on how low he can purchase a cell tower lease for. By example, if your cell tower lease is worth $500,000.00 and the individual sends you an offer to purchase your cell tower lease for $200,000.00. If you agree, the individual just got a steal and will make a huge commission on the low price upon which they just purchased the cell tower lease from you.
- Cell Tower Lease Buyout term is negotiable, however, it will likely adjust price.
Think of term like a lever with price. If you agree to a cell tower lease buyout of 99 years, you push the lever up and get the most amount of money. If you want to sell for 20 years, you pull the lever down and you get less money. Term is always negotiable to meet your needs. The question you have to consider is do you want to receive the most amount of money in the deal, or for some reason do you want to take back control of the cell tower lease in the future?
- You have a few deal structures available to you on how you transfer your interest in the lease. Lease assignment vs. grant of easement vs. fee simple. It is best to understand your options and call us with any questions.
Understanding deal structures is pivotal before you get too far down the road in a cell tower lease buyout. Sometimes it will make sense to sell the land outright in a fee simple transaction. Other times selling the lease with an easement will make the most sense. Lastly, an assignment of the lease only may be the best fit for you. To really understand all the deal structures and to see what works best for you, give us a call.
- As of April 2, 2019, buyers are currently no longer buying Sprint leases. We will have to wait until the dust settles with the proposed Sprint T-Mobile merger.
Right now Sprint cell tower leases are at high-risk for termination. They are not investment grade and if you have a Sprint cell tower lease hang in there. Cross your fingers and hope that the Sprint T-Mobile merger does not go through. As of August 14, 2019, 16 state attorneys have filed suits to block the merger. Hopefully the merger falls through, in the event it does not, Sprint sites will eventually be shutdown.
- A company that was offering you top-dollar for your cell tower lease in 2018, is unlikely to be the company offering you top-dollar this year. Budgets have changed and leaders in the market have changed as well.
Years ago one company was the top buyer in the marketplace. Then they had their fill of cell tower lease buyouts and pulled back on their budget. Deals than begin flowing to other top buyers. To stay on top of the market make sure you reach out to Airwave Advisors who is in constant contact with top buyer of cell tower leases.
- Installment buyout offers were a bad idea five years ago – they still are a bad idea.
Cell tower lease buyout installments is accepting a lump sum payment and the buyer pays you in installments over multiple years. When you calculate in inflation, lost opportunity cost of not having all your money today, it does not make sense to pursue.
- Two well known buyers in the market went completely out of business within the last five years.
Years ago many cell tower lease buyouts went to two major shops and then over night they one by one turned off the lights. They went out of business and it did not come as much of a surprise to many. They purchased cell tower lease buyouts at a premium price towards the end of their business model, and it was unsustainable.
Airwave Advisors has closed over 100 sales transactions with every credible buyer in the market. Make sure you do not leave on the money and make sure to have Nick G. Foster review any offer you receive to purchase your cell tower lease.
When I previously sold my cell tower lease, I didn’t think I would have the opportunity to sell it again. That’s exactly what I did with the help of Nick Foster and Airwave Advisors. I was contacted by a company who wanted to buy my lease, a lease I currently wasn’t receiving rent for. After discussing the offer with Nick, he was confident he could secure more money for me than what they offered me. Sure enough he pulled through and better yet he got the deal closed and me paid in under 30 days! I would highly recommend Nick to any sellers considering selling their cell tower lease.Victor B., Private property owner
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About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).