Minidoka County Commissioners agreed to a proposal from American Tower to buy out their lease on the county fair grounds for 30 years. The county rejected their initial offer of $100,000 for 50 years; however, accepted when they renegotiated and were offered $200,000 for 30 years land use. This sounds like a great deal; however, what did the county give up in exchange? American Tower will not provide you the information you need to make a decision that could mean hundreds of thousands of dollars; why should they, as they have their best interest in mind not yours.
American Tower will typically structure a lease buy-out as a simple one-time payment for both assigning a property owner’s remaining rights under the lease and also converting the current lease to a long term or perpetual easement. The motivation for American Tower is mostly the need of the company to secure time it requires at the site. This transaction is also beneficial to American Tower in that it is financially advantageous by securing their revenue streams, which is the primary motivation for them and also makes their investors happy.
In some cases, this can be advantageous, as a properly structured buy-out can far exceed the present value of the projected rents to be received over the life of the lease. A cell tower buy-out can also be valuable due to the fact that most existing cell tower leases have very favorable tenant termination provisions, so an immediate realization of rents can eliminate the risk of this revenue stream ceasing to exist in the future.
The only way to truly determine fair value is to have an expert in the telecom industry review not only your lease, but the existing tower located on your property. True value of any buy-out is not based on what your current rent is, but what the utility and value of that site is to the party leasing it. If you do wish to sell your cell tower or roof top lease, we can work on your behalf to optimize the net value you receive. We have years of experience in determining what the true value of a cell tower lease is and what a third party such as American Tower should be paying for such an asset.
The worst mistake you can make is not having the information and proper counsel when you are presented such a deal. You could be leaving tens of thousands of dollars on the table, if not more. Cell tower companies do not want you to have the same knowledge they do, nor do they want you to be properly represented. Their proposal may appear to be the Prize Pig, but is it really just a Rotten Egg?