Selling property with a cell tower can be tricky, as both your property and the tower (or towers) have independent value. As a result, many sellers end up getting less than they could because they try to sell their property and cell tower as a bundle. Moreover, many property owners do not know how to properly determine the value of cell towers on their property prior to the sale. To make matters more complex, premium selling rights are not guaranteed, even if you own the rights to your cellular tower.
So, should you sell your cell tower lease with your building or separately? What factors should you consider when selling property with a cell tower? What can you do to determine if you’re eligible to sell your cell tower lease at a good price? Finally, where can you get professional cell tower lease consultation to help you get the best deal from the sale?
In today’s guide, we will answer all of these questions and more, but first, let’s examine how to determine the true value of your cell tower lease:
Calculate The Full Value Of The Cell Tower Lease
The full value of a cell tower lease depends on what you’re trying to calculate. Generally, there are two different types of value you can calculate: the revenue you can gain from a cell tower lease contract and the sum you can attain from selling your cell tower lease. For example, if you want to know how much value you can get from a cell tower lease over the long term, you simply need to multiply your monthly rate by 12 to see how much you’re earning from your cell tower lease annually. Then, multiply this figure by the number of years in your cell tower lease contract. This will give you a rough estimate of how much you can expect to earn from the cell tower provider.
Unfortunately, this does not guarantee how much value you will get from a cell tower lease. Why? Because most cell tower companies reserve the right to end a contract early, while property owners rarely get the same privilege. Consequently, trying to calculate your lease value based on potential earnings can never be 100% accurate, as the contract could always be cut short months or even years before the contract is set to end. On the other hand, there’s always the chance that the contract could be renewed, increasing your long-term earnings. Either way, it will be very difficult to calculate your earnings from a cell tower lease accurately.
That said, using this simple formula will give you a general idea of how much you can get from your lease. If you get a buyout offer for your lease that is significantly less than the sum of your cell tower lease revenue, you know that it’s almost certainly a bad deal. Alternatively, if you get an offer that is above the total revenue for your lease contract, you should probably consider it.
Just remember that will also need to consider the impact of inflation on your short and long-term earnings. $2,000 per month now could be worth $1,500 or less in 10 years’ time. These are just some of the reasons that many property owners choose to sell their cell tower leases and get a lump sum upfront. It guarantees funds now and avoids the inherent risks of depending on an uncertain cell tower lease.
But how can you accurately calculate the sale value of your cell tower lease on the open market? The truth is that cell tower lease rates can vary substantially from one buyer to the next. There are dozens of other factors to consider as well, making it virtually impossible to calculate lease value on your own. Instead, it is best to work with a cell tower lease consultant. This ensures that multiple parties have a chance to bid on your lease, allowing for more competitive offers.
Sell Your Cell Tower Lease Separately From The Building
When it comes to selling your property and cell tower lease simultaneously, you should first consider your options and shop your lease around. When you sell a building and cell tower lease together, you will almost certainly not get the full value of your lease. The sale of a cell tower lease can often be very lucrative, but when combined with the sale of a property, it will just be treated as an amenity or “add-on” to the building. This means that, more often than not, a cell tower lease buyout will earn far less when lumped together with a property sale.
This is why we recommend selling your building or real estate separately from the cell tower lease. You can earn far more by shopping your cell tower lease around to different buyers. Even if the buyer of the property is willing to offer a good deal to get the cell tower lease, it doesn’t mean that it’s the best offer available. Fortunately, a qualified cell tower consultant can help ensure that you get the best deal on the market.
Use A Cell Tower Lease Consultant & Attorney To Do It Right
In addition to finding the best deal, there are various reasons to get the help of cell tower lease consultants and attorneys to finalize your deal. Professionals are especially useful when you want to sell your property and lease separately. For example, you could sell your property and retain ownership of your cell towers through an easement and retention agreement. However, this does not guarantee your ability to turn a profit, as cell tower owners must meet certain criteria to sell at top-dollar rates.
We’ve worked with clients who have tried to sell on their own, only to be extremely disappointed by the bids. Unfortunately, if property owners fail to reach out to us first, and they therefore don’t structure their ownership correctly, it can be much harder to broker a good deal later on. A lack of cooperation between buyer and seller can make it much more difficult to finalize a profitable sale.
This is why you should reach out to cell tower lease attorneys and consultants in advance. Professionals who are well-versed in cell tower leases can help make sure that you meet all the right requirements to sell and get the most money for your cell tower lease. At Nexus Towers, our experts can help you at every step of the selling process, from appraising the value of your cell tower to lease to fielding multiple offers and finding you the best deal.
Are you a property owner who has been approached by cell tower companies to install a new tower or buy you out of your current lease? Are you looking to sell an existing cell tower lease? Do you need help navigating an upcoming cell tower lease buyout? If so, be sure to contact the experts at Nexus Towers today!