The enigma with cell towers is strange indeed. Because virtually all cell tower
site leases have a termination clause that allows the carrier (lessee) to cancel
the lease with as little as 30 days notice for any reason. Banks will not lend on a
lease that can be canceled. Can't blame them. A real estate buyer will not pay
more for real estate with a cell site for the same reason, possible termination of
the cell site lease.
Yet a real estate owner who has a cell site on property he /she has for sale will
be very reluctant to sell off the cell site separately because they fear that site
sale value would hurt their chances of selling the property.
Here comes the strange part. Cell tower acquisition firms will pay a large lump
sum to purchase these site leases. There just aren't enough cell sites to even
come close to meeting the demand for more bandwidth and coverage. The
chances of termination are real but the odds are minuscule.
Then how can a property owner or a property buyer use this enigma to make a
great deal? You know what they say, “If life gives you a lemon, make
lemonade”. Well in this case I'd suggest you make 'enigma-ade'.
Take advantage of the fact banks have a problem with lending on a cell tower
lease that can be terminated and that a cell buyout firm will pay a large lump
sum to purchase the cell site lease, either a tower or rooftop.
Timing is everything, whether you are a buyer or a seller.
This is how, as a seller, I'd sell my property and cell site.
1. I'd get a hard bid for the cell site lease.
2. Adjust my pricing to include the fair market value.
3. Advertise the property as being offered with a built-in 'down payment'.
4. Do a concurrent closing with the proceeds of the cell site lease going to the
buyer to use toward the purchase.
Viola! 'Enigma-ade' by fashioning a sale in this fashion you've taken the
inherent, but problematic, value of the cell site lease and turned it into cash
receiving more for your property.
The idea that the buyer will be getting the proceeds of the sale, he/she won't
mind as much that the property will be encumbered with the site lease and right
As buyer/investor you may have even more potential reward. I'd be searching
for properties that are in trouble, bank owned maybe, that have cell sites.
1. Get a estimated value for the cell lease
2. Make a 'short sale' offer on the property
3. Set up a sale for the cell site using the proceeds from the site sale as all or
4. Close concurrently
Done right, you may be able to not only 'flip' the cell site but also the property.
Treating a cell tower lease as cash in a real estate transaction is not new, but it
is a niche worth practicing.
Where would you look for these potential real estate deals? Because zoning is
a problem with cell sites, I'd be looking for industrial, church, commercial or
multifamily properties. These have historically been the easiest properties on
which to obtain cell tower or roof top cellular permits.
When you get ready and need multiple bids (for the best price) you know where
to find me.
P.S. Billboards also will turn into cash. Just saying.
Tags: Cell site lease cash value, cell tower site lease cash values,cell
tower lease cash values
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