Cell Tower Lease: Sell, Joint Venture, or Refinance?

Cell tower lease: charge it or?

There are several ways to turn your cell tower or rooftop lease into cash without relinquishing title. Just like any other real estate, you can choose to sell your lease, go into a joint venture with your lease, or recently the option to refinance your lease is now possible.

This gives you, the landlord, more choices than ever before to get the cash you need, when you need it, no matter why you need it. Let’s explore these and see if any of these are for you.

Sell ​​your cell tower lease

For the last twenty years or so, selling a cell phone tower was the only method of turning that cash flow into a lump sum. Private and Wall Street buyers paid cash for the leases, giving investors a higher-than-average income stream. There were risks of some leases becoming worthless due to carrier mergers and acquisitions, but these were discounted and the reward was worth the risk.

As this pool of telecom-based assets has evolved, risks have reached a downward bias and buyers tend to pay more for basically the same assets. There are also more players who are willing to further increase purchase prices which are actually allocations on these leases ranging from 30 to 99 years. For these periods of time, the buyers obtain the benefit of receiving the income that is produced. They also bear the risk of a partial or total loss if a carrier or group of carriers chooses to abandon or terminate a tower or rooftop.

Joint Venture Your Tower Lease

What? Yes, sell a part of the property on your lease or sell part of the time you have left on your lease. Almost anything is possible, as long as it makes sense to someone who is willing to pay for the reward they might receive. Remember, you have cash flow and you can sell it if you discount it enough to make it possible for someone else to make a profit.

What I like most about the JV (joint venture) possibility is that you can get your cake and eat it. Sell ​​half and still receive half of the income. Here’s the sweet part; you have a professional manager built in who will take care of this lease until, forever, if planned correctly.

When it comes time to renegotiate the lease, your ‘manager’ will do the best he can because he has an interest (just like yours). Any other trader your ‘manager’ can attract, the more income you will earn.

And it has a built-in buyer in case you ever decide to give up the balance on your lease.

Refinance your cell tower lease

This is new and huge. Until recently, a bank wouldn’t lend you a dime on your cell tower lease for good reason; It had a termination clause. This meant that the cell phone provider, your tenant, could, for any reason, with as little as 30 days’ notice, withdraw from the lease.

We have discovered a source that has learned the risk/reward calculations (probably former cell tower buyers) and is willing to lend money to build new towers, lend money to buy a tower rental, or even rent a pool. They will lend up to $25 million for the right project.