Desktop, Laptops, IPods, IPads, Tablets, Cell Phones: There’s not much difference

Posted on March 27, 2013 by Administrator

I can make a call on my cell phone, but I can also make a call on my IPod, IPad, tablet, laptop, and even my desktop. I can text, download data and watch a movie with any of these devices.

So what is the difference? Obviously size and portability are sometimes a factor, but as these devices clone each other they become “a rose by any name will smell as sweet”. The big and I mean big difference is how the information is transmitted. So it comes down to WiFi vs cellular.

WiFi is becoming more available and is keeping up with cellular coverage. Free WiFi is available at many commercial establishments and even in some communities. I’ve not heard of any free cellular. Is WiFi going to takeover the top spot when it comes to data and text? Probably not, but it will compete for a larger share.

Why pay high cellular fees to download large data files when you can stop off at a fast food restaurant, grab a burger and download that movie to view later. All of this for the price of a burger.

Just saying!

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Debt Financing: Cell Tower or Wireless Lease Acquisitions

Posted on March 13, 2013 by Administrator

This is huge. A bank offering financing for cell tower lease and ground lease purchases. Every cell tower lease owner knows that banks won’t loan them a nickel on their lease. Now a bank is offering to loan up to $5M for the acquisitions backed by these same cellular and billboard leases.

To be fair, I was told that these loans were for buyers, but I can’t help but believe that tower buyers could use these loans to hedge additional purchases using their inventory as collateral or borrow the funds to purchase a block of leases from another cellular acquisition firm.

The bank is the Texas Exchange Bank. They are located at 301 Commerce Street, Suite 2901 Fort Worth, Texas 76102. Beau Chron, is the commercial loan officer who contacted me. His number is Office: (682) 224-8751 and his email is bchron@txexbank.com

This is Texas and Texans just do things others won’t.

Just saying!

Posted in billboard buyers, billboard companies, billboard ease buyers, cell site leases, cell tower buyers, cell tower leases, cell tower sales | Tagged , , | Leave a comment

Cell Tower Lease Buyout Value

Posted on January 21, 2013 by Administrator

Buyout Value of Your Lease

At what price would your cell tower lease buyout be? What’s the real value of your cell tower lease? The answer is: what will the highest bidder will pay? The normal response is, “Yeah, but what’s it worth?”

How Cell Tower Cell Tower Buyers View Your Lease

I thought I’d post a list that showed a list of what components of a lease are favorable and which are unfavorable when it comes to a buyout. Keep an eye on which favorable terms in your lease may become just the opposite if they go too far. This is how the buyers view them.

Favorable to a Buyout:

  • A high monthly rental figure – however if the rent figure becomes non-competitive due to new cell sites in the area, this could become a disadvantage.
  • The cell carrier is ‘too big’ to be a victim of being bought-out or swallowed in a merger, thus causing redundancy and a chance to having the site decommissioned.
  • Cell lease escalator clause – normal escalator percentage increases are 3% each year or 15% each five years. A higher % is a plus, as long as it doesn’t get, again, to the point of being seriously non-competitive
  • Does your tower lease give you rights to receive co-location rents? When/if the carrier adds additional carriers, do you receive a portion of those rents? How much of the additional rent do you receive. More is better, but are your terms competitive?
  • Does your lease give the carrier enough room to add additional carriers? This would apply directly to those having co-location rents built into their leases. Even if you don’t have the rights to co-location rents, it may be a plus for the carrier as they would be in a position to take advantage of additional income, thereby potentially warding off rent reduction or lease termination.
  • Does your lease have a ‘Right of first Refusal‘ (ROFR)? “No”, is the best answer. Although a ROFR does give the impression that the carrier really wants to protect the ownership of the lease, but it hurts when competitive bids are being sought. You’ll find most ROFRs are in leases that are between cell tower companies (firms that build towers and solicit co-location carriers) and property owners. Many buyers won’t even try to compete with tower companies as they do all the work and the tower company simply takes advantage of that work. Without the competitive bids the tower company has no need to buy the cell site lease.
  • Restrictive zoning – Have ordinances changed making it highly unlikely that a new tower or rooftop being constructed. These zoning restrictions may not apply to the new miniature cell site cell site technology such as microcells, picocells and femtocells, which are a definite threat to cell towers as a replacement alternative to expensive to operate cell towers.
  • Is your tower or rooftop in a high traffic area? Is traffic increasing?

A Cell Tower Lease is Worth What a Buyer Will Pay for it Under Auction Conditions

Any closer to knowing what the value of your cell tower lease is as a buyout candidate? Probably not. Because cell tower buyers digest each and everyone of these factors and then get into risk/reward regarding rumors regarding the carrier and what they believe the need for a particular cell site is to their coverage, and no, they won’t share that with anyone.

So, what is your lease worth? Only an auction will tell.

 

Posted in cell site lease value, cell site leases, cell tower buyouts, cell tower lease value, cell tower leases, cell tower sales, Uncategorized | Tagged , , | Leave a comment

Inflation: Cell Tower Owners Beware

Posted on January 14, 2013 by Administrator

Virtually all cell tower leases contain a clause that allows the tenant (cellular carrier) the right to cancel the ground lease with a 30 day written notice. The probability of that happening is pretty low, but it does happen. Nextel ground lease landlords would be witness to, “but it does happen”. Tens of thousands have or will have their contracts cancelled.

I’m going to guess that possibly, everyone of these Nextel ground lease landlords have had, in the past, a substantial cash offer that they turned down. These offers were probably in the range of 90 to 120 times the monthly rent. Still, only a small percentage of all lease holders were or will be affected.

The enemy of all cell tower lease owners will be inflation and the rise in interest rates to combat it. The inevitability of of inflation puts the feds with a real dilemma of dammed if they do or dammed if they don’t. They have stated that they will keep rates low until unemployment is greatly improved.

I believe the real reason the feds will keep rates down is that if rates go up, it could be possible that the United States could not pay the higher interest on the trillions of dollars of our debt. For now, let’s rule out the rates going up scenario.

The dammed if they don’t [raise rates to combat inflation] scenario could put the US in a far greater  dangerous scenario. The dollar could become a second class currency. Think about it for a minute. If rates are not raised to fight inflation, why would anyone want to buy dollar denominated assets? Countries that do fight inflation through higher rates would benefit. Currency exchange rates would sky rocket against the US dollar.

What would either of the two scenarios do to cell tower leases? Either inflation eats up their value or international exchange rates eat their value.

The problem with cell tower leases is the fixed lease payment, even though they do average an increase of 3% yearly, and all fixed income assets get butcheerd in an inflationary environment. And keep in mind that there are only a handful of cell tower lease buyers. They will keep buying leases, but at what price?

My guess is that there will need to be a price that is at a big discount to today’s pricing. Maybe a real big discount.

Just saying!

Posted in cell site leases, cell tower buyers, cell tower lease termination, cell tower lease value, cell tower leases, cell tower sales | Tagged , , , | Leave a comment

Cell Tower Lease: Crying ‘wolf’

Posted on January 12, 2013 by Administrator

“… your cell tower lease is pretty safe…”

I don’t want to be like the little boy crying wolf, but there’s a problem brewing. No, your cell tower lease is pretty safe from termination or rent reduction, but there’s a serious chance that the value of your lease is in serious danger.

“Inflation, with a capital ‘I’…”

If you were around in the late 70s and early 80s, you’ll relate, big time. Inflation, with a capital ‘I’ was the financial epidemic of the time. Everything was affected. Nothing escaped. Mortgages were in the upper teens, second mortgages were in the 20s.

“What would a cell tower lease… be worth?”

Let me ask you; if that happened today, what would a cell tower lease that grows at 3% annually be worth? We hopefully aren’t headed for a repeat of this era, but it’s hard to imagine that we are going to escape our present worldwide financial dilemma without some above average inflation.

“Under-performing asset, to say the least”

The inflation scenario that I’m crying wolf about is likely and it will turn a great revenue stream into an under-performing asset. How about the cash value of that cell tower lease? Will it go up or down?

Just saying!

Also must read “Getting prepared to sell your cell tower lease.”
goo.gl/Vz0sw

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3 % Cell Tower Lease Escalation vs Inflation

Posted on January 11, 2013 by Administrator

Are you a cell tower lease owner. Let me ask you a some questions:

  1. When inflation heats up and goes beyond your 3%/year lease escalation, what is your lease going to be worth?
  2. When the feds have to combat inflation by raising rates and CDs start paying more than 3%, what is the value of your cell tower lease going to be?
  3. With talk of a TRILLION dollar coin is seriously going on, what does that say about inflation?

Cell Tower Lease Values

You may be sitting on a gold mine today, but who’s to say that tomorrow, you may be the proud owner of an under performing asset? Risk/reward, works just like supply/demand. When one side goes up the other side goes down. This works as sure as a see-saw works.

When inflation tops 3%, cell tower leases will become less valuable. Your lease may be worth 150 times your monthly lease payment today. What will it be worth tomorrow to a cell tower lease buyer in a lump sum buyout?

Just saying!

Must read: http://1st-celltowerbroker.com/blog2/2013/01/11/inflation-vs-cell-tower-lease/

Posted in cell site lease value, cell site leases, cell tower buyers, cell tower buyouts, cell tower lease value, cell tower leases | Tagged , , , | Leave a comment

Inflation vs Cell Tower Lease Escalation

Posted on January 11, 2013 by Administrator

“3 % rent escalation…”

Wanna bet inflation over the next 10 years could go way beyond the 3% rent escalation of your cell tower lease? I wouldn’t be at all surprised. With the feds printing mortgage buying dollars and with no end in sight, inflation is coming.

“Cell tower lease payments won’t be…”

Cell tower lease payments won’t be as attractive as they are today. Inflation at 5% and your lease only escalating at 3%. Do the math; you’re starting to go backwards. This is sort of like paying the bank 2% to deposit your money.

“The BIG hit comes “

The big hit comes when the feds have to start raising interest rates to curb inflation. Will your cell tower lease that increases in value be worth more or less if CDs, for example, are paying 6%? Three % (with lease termination risk) or CD at 6% (no risk)?

“… cash value of your lease will…”

If/when inflation heats up, the cash value of your lease will plummet. What’s peace of mind worth? When this happens, tower lease owners will rush to dump their leases. You can bet on it.

“Calls inquiring about all cash buyouts are…”

Calls inquiring about all cash buyouts from business owners with cell sites on their properties are up 200% over this time last year. They are referring to the leases as “under performing assets”. One gentleman made the comment that he thought it was time to sell his lease to a cell tower buyer before his lease became a “non-performing asset”.

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Cell Tower Lease Value

Posted on January 11, 2013 by Administrator

“Cell tower lease… like having a gold mine…”

Having a cell tower lease on your property is a little like having a gold mine. Constant lease payments every month (or year) is pretty solid financial security. This is true, except when it’s not.

Overlooked the termination clause in your lease? Or do you pretend it doesn’t apply to your cell tower lease? Well, boys and girls, there have been 10s of thousands of these ‘terminations’. When a cellular carrier buys or merges with another carrier, the odds are that one of the two will start getting rid of the redundant cell sites. The latest merger has been Sprint/Nextel and thousands will be affected.

The real value of a cell tower lease…”

The real value of a cell tower lease is its cash value. When/if your lease is terminated you not only lose your monthly or yearly payments, you lose the cash that you could have gotten for the cell tower lease. Could have been a hundred or more times your monthly rent payments. Can you image having a certificate of deposit, say for a couple hundred thousand dollars that was paying you $1,500 a month and getting a note in the mail that, “We have decided to stop your payments and by the way we are keeping the cash also”?

“Do the smart thing…”

Do the smart thing while you can. Use the cash lump sum buyout proceeds to purchase an asset that gives you more protection. You got lucky when the carrier gave you the cell tower lease. Don’t push your luck! No property owner looks more foolish than one with a terminated cell tower on his/her property.

Just saying

Also must read “What’s the value of your cell site lease?

!

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Cell Tower Leases: Vol 2 Cash Buyout

Posted on December 10, 2012 by Administrator

Cell Tower Lease Cash Buyout

Ready to sell your cell tower lease? There are a lot of things to consider. Do your homework. It could make/save you tens of thousands of dollars. You are going to want to contact all the important cell site lease buyers, speaking only to the top management. These are the people that can and will offer you the most for your lease.

Normal buyout offers are for terms of 30, 40 and 99 years (perpetual). At the end of these terms, the leases will revert back to you. You will again start collecting lease rents. The trade off is that the longer the ‘buyout’ term, the more you will receive in a cash buyout.

Make sure you negotiate a co-location rent clause. This means that if there is a right to collect a portion of additional rents in your original lease, you would get a portion of any new lease rents. If your original lease does not have this clause, you could still get additional rents when your present tenant’s lease expires if you negotiate a c0-location clause.

You can get bids for your leases and you don’t have to accept them, so be careful that you are not signing a ‘listing’ that binds you to sell.

Cell Tower Consultant – VerticalConsultants

Posted in cell site lease value, cell tower buyouts, cell tower lease termination, cell tower lease value, cell tower leases, cell tower sales, Uncategorized | Tagged , , , , | Leave a comment

Cell Tower Lease: Vol 1 Buyout

Posted on December 10, 2012 by Administrator

Are Cell Tower Lease Values in Jeopardy?

It’s that time of the year. New tax laws are going to hit all of us the beginning of the year. We need to plan what we are going to do with our income vs assets. Cell tower leases can be both major income and a major cash infusion (buyout).

I’d, at least, start thinking about what you might want/have to do with regards to your cell tower lease. The monthly or yearly lease income is awesome and is pretty secure, unless your site is/was a Nextel site.

Verizon, AT&T and T-Mobile are spending an absolute ton of money on up grades, so if your site is getting fiber optics or a 4G upgrade, you are most probably fairly safe.

The problem comes, from the way I see it, is will the cell tower lease income you are receiving from your cellular lease keep up with inflation? Another measurement that becomes very important to calculate, are their other investments that may bring you more income?

When interest rates start back up, and they will, will the returns on cell site leases become worth less, due to the higher returns that will be demanded by the cell tower buyers.

Cell Tower Lease Videos Links (AirWaveManagement)


 

 

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