- Q: How does a tower lease affect property value?
A: A tower lease can enhance income potential but may lower flexibility or resale options depending on lease restrictions. - Q: Can tower rent be included in income analysis?
A: Yes, tower rent is typically factored into net operating income if it’s stable and documented with a valid lease. - Q: What risks concern lenders with tower sites?
A: Risks include tenant default, environmental exposure, and long-term restrictions that complicate loan collateral. - Q: How should leases be disclosed in loan applications?
A: Applicants should provide full lease copies, rent schedules, and expiration details to ensure underwriting accuracy. - Q: What due diligence steps apply before financing?
A: Lenders should verify zoning, rent levels, and the tenant’s financial stability before approving loans. - Q: How can appraisers measure tower impact on value?
A: Appraisers analyze lease income, duration, and comparables from similar tower sites in the region. - Q: Should tower income be capitalized or discounted?
A: Capitalization applies when income is stable; discounting is used if rent is temporary or uncertain. - Q: How do lenders verify lease payment histories?
A: By reviewing tenant payment records, bank deposits, and correspondence confirming rent compliance. - Q: What lease terms affect financing risk?
A: Term length, termination rights, and assignment clauses directly impact loan security. - Q: Can tower leases be transferred after foreclosure?
A: Most leases allow transfer to the new owner, but lenders must confirm assignability provisions. - Q: How does a buyout change asset valuation?
A: A buyout replaces recurring rent with a one-time payment, altering both cash flow and capitalization analysis. - Q: What documentation supports appraisal conclusions?
A: Comparable leases, site inspections, and income verification records support value determinations. - Q: Should appraisals include co-location potential?
A: Yes, as the ability to host additional tenants can increase long-term income and property value. - Q: When do lenders require environmental assessments?
A: Prior to financing, especially if prior land use or tower equipment poses potential contamination risks. - Q: What are typical lease durations for financed sites?
A: Leases commonly run 20–30 years with options for extension, ensuring income stability over loan terms. - Q: How does tower income influence cap rates?
A: Predictable tower income can lower cap rates, signaling reduced investment risk and higher asset value. - Q: What limitations apply to using rent for collateral?
A: Lenders may require rent assignments but restrict future modifications to preserve loan security. - Q: What factors impact loan-to-value calculations?
A: Property income, location, and lease strength all affect how much financing a lender is willing to extend. - Q: When should leases be reviewed before refinancing?
A: Prior to loan application, to ensure rent levels and renewal terms support updated valuation. - Q: What appraisal standards apply to tower properties?
A: Appraisers follow Uniform Standards of Professional Appraisal Practice (USPAP) and use income-based methods.
