Vertical Consultants’ job is to keep our finger on the pulse of the cell tower market at all times!
The combination of recent events related to the COVID-19 outbreak, the downturn of financial markets and even the rollout of 5G technology across the United States has raised concerns about how cell tower leases will be impacted.
Many property owners are starting to see more frequent contacts (phone calls, emails, etc.) from companies looking to buyout/purchase their cell tower leases.
A cell tower lease buyout is when a property owner who has a cell tower lease sells their right to receive rent to a buyer for an agreed-upon price and period of time. Most buyouts are where the seller grants the buyer an easement for the land being lease with the term of that easement being for a period of 50 or 99 years. In exchange for the property owner granting the afore-mentioned easement, the landowner will receive a one-time payment or a payment over a certain number of years.
Generally, the longer the term of the easement, the more the property owner will be paid. Also, the range of the purchase price offer is largely dependent upon the current rent you are receiving, the rent escalator, and the lease expiration date. However, not all cell tower leases are alike, so a property owner needs to know the “True Value” of his or her lease.
Why Should You Sell Your Cell Tower Lease?
Vertical Consultants has, over the last 10 years, been an advocate for property owners, not to sell their cell tower lease (unless certain selective circumstance exist), but our position has recently been adjusted to a neutral one based upon changing market conditions.
There are 3 main reasons you might consider selling your cell tower lease:
- Due to certain conditions, the immediate need of funds is important to you, including paying down debt or unforeseen expenses;
- Situations exist that allow you to take money gained from a cell tower lease buyout and receive a greater return than if you continued to hold the lease;
- The cell tower rents are at risk and a cell tower lease buyout would work to hedge against the risk of the termination of rent payments.
Why Sell Now? The Federal Reserve!!
Why now? It may be an interesting time to consider selling your cell tower lease due to recent actions by the Federal Reserve. The Federal Reserve’s announcement of an immediate drastic decrease in interest rates will significantly lessen the cost of capital for everyone – including cell tower companies and third-party lease buyout companies.
We anticipate that companies will take this opportunity, while cheap money is available, to purchase as many cell tower leases as possible. As a result, property owners will have the opportunity to see higher purchase prices for their cell tower leases. Depending on how long the Federal Reserve maintains its lower rates will determine how long this selling window will remain open and how long you have to take advantage of potentially higher purchase prices.
If you are considering selling your cell tower lease or just have general questions about a lease buyout offer received, please contact us and we will work to answer your questions.
A cell tower lease buyout is a major transaction that will affect you and your property for decades to come. Vertical Consultants has both decades of wireless industry and legal experience to make sure you’re not only leaving money on the table, but also avoid common pitfalls associated with the sale of you cell tower lease.
Contact us today and we will review your cell tower lease, review your cell tower site, and, most importantly, we will listen to your needs to determine what the best course of action for you is going forward.
Remember, the cell tower companies have experts on their side, shouldn’t you?