Should I Sell My Lease?
The Cell Tower Lease Buyout
At Cell Tower Attorney, a growing segment of our business is in the area of cell site lease buyouts. We are frequently contacted by landlords with existing cell site lease agreements on their property who have been approached by one or more lease buyout companies interested in purchasing their cell site lease. While many leaseholders are motivated to sell, others are more uncertain. For those that are uncertain, we are frequently asked, "Should I sell my cell tower lease?" To sufficiently answer this question, we believe that there are 2 main schools of thought when considering the sale of your cell site lease agreement.
1. Technical Analysis - The first is what we describe as technical analysis. This involves analyzing (i) the lease buyout offer, (ii) the leaseholder’s property and (ii) the specific cell tower tenant involved (i.e. Verizon, AT&T, T-Mobile, Sprint Nextel, etc.). More specifically, one should consider the following questions:
- Lease Buyout Questions
Who is offering to purchase your cell site lease? What is the lease buyout company’s financial strength and how likely are they to close the transaction? What are the terms and conditions associated with the purchase and are you being offered fair market value? Are you selling a specific or general easement? Is it for a fixed term or perpetual? Are you sharing profits if other cell site tenants lease your property in the future?
- Property Specific Questions
What radio frequency objectives are being addressed by this particular cell site? Is my current rental amount above or below market rates and if so, how does it impact the likelihood that the site will remain there for the near future? Is there another available property or existing carrier-owned cell site nearby that could also cover these same objectives? Does the existing lease or leased premises provide for future expansion?
- Cell Tower Tenant Questions
Who is my current cell site tenant? What is the financial health of the company and what is their forecasted outlook for the near future? How is the company positioned in the market when compared to their competitors? Is the company a take-over or merger target? How may a proposed merger impact my site?
With the assistance of our related company, Steel in the Air, we specialize in providing technical analysis and assisting landowners in answering these and other technical questions to help you evaluate a proposed lease buyout offer.
2. Fundamental Analysis - The second school of thought is what we describe as fundamental analysis. This does not involve analyzing technical data or other industry specific information. Rather, it looks at economic and other factors that are specific to the individual who owns the property on which the cell site is located. More specifically, one should consider the following questions:
- What are your short term and long term financial goals?
- Do you have a short term need for cash such as an investment or other obligation?
- What are your future plans for your property and how will a sale of the cell site lease restrict your ability to redevelop or possibly sell your property?
- How does the cell site lease impact the potential purchase price of my property and am I possibly better off selling my cell site lease separately from the sale of my property?
Unlike the objective nature of the technical analysis, the fundamental analysis is completely subjective and is personal to the cell site leaseholder.
At Cell Tower Attorney, we can help you evaluate all of the above-referenced factors and the legal impact of your answers to each of these questions.
If you have been approached by a lease buyout company, please consider retaining our services.