Lease Buyout Companies
A cell tower or cell site lease buyout is a transaction whereby one company pays a lump sum to a landowner or building owner (“leaseholder”) in exchange for the right to future rent payments. Lease buyouts do not extinguish the landowner’s obligations under the original lease, or the lease itself. Effectively, all that is happening is that a third-party is being brought into the mix.
Various types of companies are interested in buying cellular leases, including tower companies, lease optimization companies, and lease buyout companies. Lease buyout companies are typically not affiliated with the tenants (the wireless carriers or cell tower companies) with whom landowners are party to the lease agreement. For example, if AT&T is the tenant leasing a parcel of property and someone not affiliated with AT&T wants to buy the lease, that someone is acting as a 3rd Party Lease Buyout Company. However, in the case where a tower company is leasing land and wants to buy the lease, they are acting as a tenant who simply wants to own the long-term obligations under the lease. In rare circumstances, tower companies also seek to purchase leases as a third party; this happens primarily with rooftop leases. Typically, we find that 3rd Party Lease Buyout Companies do not pay as much as Tower Companies when it comes to buying the tower companies leases.