So you want to sell your cell site lease? Probably a good idea to do a little
homework first. Right? First let's take stock of what you have in the way of a
cellular site lease, the physical cell site itself and its value.

Let's get your cell tower lease out and go over a few items.

1. When did your cell site commence (commencement letter – This is the
date that the lessee started paying rent)? This will help determine the
anniversary dates of your site lease escalations.

2. How much was your beginning cell site lease payment? The beginning site
lease payment is the bases for lease payment escalations. Offers from cell
buy-out firms will be multiples of your monthly income. These can range from
150 times monthly site rent to 200 times (plus) monthly site rent. With site
sales averages at 190 times monthly site rent.

3. Do you collect additional rents (co-location rents or 'co-los') when the
lessee adds (sub-leases)  additional cellular carriers? Many poorly
negotiated cell site leases DO NOT contain the right of the owner (lessor) to
collect additional carrier rents paid for sub-leases.

4. Who is the carrier who has the lease and who are the additional carriers
(sub-lessees)? This is probably the most important sales feature of your cell
site. This is referred to as 'credit worthiness' (applies to sub-lessees also)
and is used in the risk reward ratio used by a cellular buy-out firm. There is
'risk' in buying a lease that has a high probability of being 'terminated' due to
a merger or carrier failure that causes redundancy or loss of income.

5. If you do collect additional rents (3 above) how much are your additional
payments? These co-location rents will have a great bearing on the value of
your cellular lease buy-out. (see 2 above)

6. Does the cell carrier (lessee) pay their proportionate insurance and real
estate taxes for the property on which you have given them a right-of-way?
This is normal boiler-plate, but make sure you can prove that these
payments are being made by the cell site lessee.

7. Is the right-of-way specific or general? A general right-of-way is more
attractive to a cellular site buy-out firm because it allows them to add sub-
leases to additional cell carriers without further negotiations  for additional

8. How much does your site lease payment escalate and how often? Two
schools of thought here. Having a normal escalation (3% annual or 15%
each 5 years) is pretty safe as far as the carrier staying on your site when a
new nearby site becomes available, however if you were able to negotiate a
much higher escalation you could be in danger of losing your lease to a
nearby that is offering a lower set escalations.

9. How much time does the cellular lessee have to give you should they wish
to terminate (referred to as 'The Termination Clause')? This is normally 30 to
90days. I've heard of, but never seen, a telecom lease that did not have a
termination clause.

10. What are the option periods (renewals), these are normally 5 years? This
is a true 'red herring' if there is a site termination clause.

11.  What is the term of your lease? Normal terms are 30 years, 40 years
and 'perpetual'. After the cell lease expires the cell lease reverts back to you
or your estate.

12.  Who are the additional cell carriers? (see 3 above)? These carriers are
important in determining the future cash flows (see 4 above)

13.  What type cell structure is on your site cell (tower, pole, stealth, etc.)
The size and capacity or the cell site structure is important as the cost of the
structure (and its dis-assembly in case of 'termination') is a site sale factor.

14.  Are their fiber-optics to your cell site? This would be a big plus as fiber is
expensive to install and does show some intent to continued use. This can
increase your site lease sales price (value).

15.  Are their additional cell sites nearby? Could be either a plus or a minus.
Is the nearby a proximity a necessary continuation of the cell coverage of the
carrier(s) on your site? Or is it in competition for your carriers to re-locate?

16.  Have you been approached by a 'rent reduction' firm representing your
cell site lessee? Could be a sign that the carrier may feel that the lease rent
is too high. These firms play two site owners against one another to achieve
the lowest and best lease re-negotiated terms.

Disclaimer: Author is not an attorney nor does he play one on TV. Nothing
included in this article is intended as legal advice. The author wholeheartedly
recommends speaking with your attorney before selling your cell site lease.

Ready for multiple site lease sales offers?

Must reads - "
Cell Tower Terminations",
Cell Tower Lease Co-Location Rents"
ROFR" - Right of First Refusal (Cell Tower Leases)
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