Cellular telephone tower lease: cash it in or?
There are several ways you can turn your cell tower or rooftop rental into cash without giving up title. As with any other property, you can opt to sell your lease, joint venture your lease or, more recently, the option to refinance your lease is now possible.
It gives you, as a funder, more alternatives than you’ve ever had to getting the money you need, when you need it, no matter why you need it. Let’s explore them and see if any of them are right for you.
Sell your cell tower lease
For the last twenty years or so, selling a cell phone tower lease has been the only method of converting that cash flow into a lump sum. Private and Wall Street buyers paid the leases cash, providing investors with an above-average income stream. There were risks that some leases would become worthless as a result of carrier mergers and acquisitions, but these have been discounted and the payoff has proven to be equal to the risk.
As this set of telecom-based assets has evolved, the risks have reached a downtrend and buyers are inclined to pay more for the same assets. There are also more players who are ready to further increase the purchase prices which are in fact assignments of these leases ranging from 30 to 99 years. During these times, buyers have the advantage of receiving the income produced. They also take the risk of partial or total loss if a carrier or group of carriers chooses to abandon or terminate a tower or roof.
Joint Venture Your Tower Lease
What? Yes, sell part of your leasehold property or sell part of the time you have left on your lease. Just about anything is possible, as long as it makes sense to someone who is willing to pay for whatever reward they might receive. Remember, you have cash flow and you can sell it if it’s discounted enough to allow another to make a profit.
What I like most about the JV (joint venture) possibility is that you get your cake and eat it. Sell half and continue to receive half of the income. Here is the sweet part; you have a professional built-in manager who will manage this lease until, forever if planned properly.
When the time comes to renegotiate the lease, your “manager” will do his best because he has an interest (the same as yours). All the other carriers that your “manager” can attract, the more income you will get.
AND you have an integrated buyer if you ever decide to waive the balance of your lease.
Refinance the lease of your cell tower
It’s new and huge. Until recently, a bank wouldn’t lend you a dime on your cell tower lease for good reason; there was a termination clause. This meant that the cellular carrier, your tenant, could, for whatever reason, with as little as 30 days’ notice, quit the lease.
We discovered a source who has learned risk / reward calculations (probably from former cell tower buyers) and is willing to lend money to build new towers, to lend money to buy a lease of. tour or even a group lease. They will lend up to $ 25 million for the right project.