Cell Tower Lease Buyouts
Since 2004, Steel in the Air has serviced over 2,500 landowners nationwide, by helping negotiate favorable leases with wireless carriers, tower companies and lease buyout companies. We know the industry inside out. We understand who the players are and what their motives are, and unlike other telecom consultants, we work for landowners exclusively, which means the information you receive from us will be fair and unbiased. If you've been contacted by a buyout company, then we encourage you to take caution. We can assist you with making an informed decision based on comprehensive knowledge of all the factors relating to the value of your lease in the present and the future.
Here's what we can do for you:
Review the Lease – We will evaluate the terms and language of your current lease and any buyout proposals, and answer any questions you might have.
Audit the Cell Site – We will perform a cost-benefit analysis to determine the likelihood of the cell tower being relocated, which will include an investigation of zoning regulations, current tenants and usage, and expected replacement costs vs. profit flow to the cell tower owner.
Evaluate the Buyout Proposal – We will evaluate the buyout proposal and perform a lease valuation using comparable lease rates data comprised of previous offers and sales. Our goal is to determine the fair market value of your lease in the present - and what it will likely be in the future, while simultaneously assessing the relative value of your lease to the buyout company (and the company they are working for).
Recommend a Strategy – Based on our analysis of the unique factors that can influence the value of your lease, we will provide a recommendation on whether or not you should sell, and if so, for how much. We will also explain to you the upsides and downsides of entering into an agreement with a third-party lease buyout company. If you determine that you want to sell, we will recommend other buyers who might pay more for your lease. If you decide to accept the proposed offer, we will help you negotiate favorable terms.
What is a Lease Buyout?
If you currently have existing cell sites on your property, you are likely getting contacted on an almost weekly basis by new companies that are interested in buying your leases. Some may contact you and offer to provide free advice on the value of your lease. Others will send you a postcard stating that they are placing antennas in your area and are interested in your site. Don't be fooled by either “free offer”; they are just a falsity intended only to induce you to contact a cell site lease buyout company. If a wireless company wants to lease your property, the letter will clearly identify who they are and what they want. And getting a free assessment from a company whose motivation is to purchase your lease is worth less than the value of the paper the assessment is printed on.
We have served over 3,000 clients, reviewed over 8,000 cellular leases and tracked over 2,000 lease buyout offers to date.
These cell site lease buyout companies purchase the remaining cash flow under a cell tower lease. They use high pressure sales tactics to get you to respond. Some tower companies like American Tower and Crown Castle have been contacting owners directly, as well. These transactions are typically crafted as a simple one-time payment for a lease assignment. Sometimes they are structured as a permanent easement in exchange for the rights to collect all future rent payments from the cell tower owner. Other companies just purchase an assignment of the cell site lease and a successor lease.
Unfortunately, still other companies resort to "scare tactics" -- suggesting that emerging technologies will render your tower obsolete in the near future. They may even include news articles with their offers about LightRadio, or the 700MHz spectrum auction, or the pending mergers. Instead of explaining the articles, these cell site lease buyout companies would rather have you assume the worst. They may also suggest that industry consolidation is prompting the standard "90-day" cell site leases to be considerably shorter. Most agreements are written to allow the cell site lease buyout company or wireless carrier to terminate the cell tower lease with 90-days notice, without penalty. Don't be fooled: While it's true that cell tower leases can be terminated, it's not a common occurrence.
Reasons to Consider a Lease Buyout
Of course, there are reasons why you might want to sell the remaining portions of your lease to a company that specializes in this type of transaction:
- First and foremost is the opportunity to get cash out of your asset. These companies often offer a sizable payment when your own financial institution would not. Landowners attempting to borrow against cell site leases often discover that banks do not loan against them because of the 90-day termination rights common in most cell site leases. Purchasing companies can reduce the risk that any one lease will be terminated whereas you cannot.
- Second, the "offer you can't refuse" might just be one that's too good to pass up. It depends on the location of the site and the company purchasing the lease rights. The only way to determine which situation you're facing is with an expert review.
- Third, in certain situations where you are facing possible cell site lease termination due to the Verizon/Alltel merger or the Nextel/Sprint merger, the sale for a lump sum may very well eliminate the risk that those companies will terminate the cell site leases. We'll help you gauge that risk and determine if the sale is right for you.
- Fourth, if you are planning on selling the underlying property, it might make sense to sell the cell site leases separately as most purchasers of property won't pay you the same amount for those leases.
If you have reached this page, you are likely in one of two situations: Either you have decided you are going to sell and are trying to determine the fair market value of your lease, or you have received an offer or offers to buy your lease and aren't really sure whether you should sell. In either case, using our services and expert counsel will ensure you make the most informed decision possible.
If you need help determining whether you should sell, we can provide an assessment that details how to evaluate a proposed lease buyout offer. We provide this assessment on a fixed fee basis, which depends on the complexity of your situation. Please contact us and we will be happy to provide a free no-obligation quote for services. Unlike other consultants, we will never require a fee from you and then charge a finder's fee from the buying company. That practice is a major conflict of interest. You can rest assured that we don't have an ulterior motive when we provide you needed guidance.
We'll help you estimate the true "present value" of your cell site lease; unveil the history of the lease buyout market; and share our insights on future expectations. We'll also advise you on the best time to sell. With our comprehensive database of over one thousand transactions, we can reveal actionable trends in this area. We have a comprehensive database that includes thousands of lease buyout offers and sales made over the last seven years. This includes detailed information from every lease buyout company and most, if not all, of the tower companies who have made lease buyout offers. Furthermore, we can determine whether or not you are sacrificing future revenue that you might not have even considered. We can also help you understand why sharing 50% of revenue is actually a bad deal.
If you have decided that you want to sell and you are interested in simply getting a better offer, contact us with the details of your lease(s) and any current cell site lease buyout offer you are received. We are often willing to work on a contingency basis - meaning we don't get paid unless you get a better offer than the one you currently have. We know the companies, which assets they like, and how much they will pay for them. We will help you structure the deal that is most advantageous to you. Our initial call is free and we won't waste your time or ours if we don't think we can help you get a better offer.