Go | New | Find | Notify | Tools | Reply | |
| Member |
A few years ago a cell phone company put up a cell tower on some commercial property we own. A few months ago a company contacted us out of the blue with an offer to buy the lease on the tower. Anyone ever have any experience with this? | ||
|
| I Am The Walrus |
I think this may finally be the time that someone on Sig Forum won't have the answer.  I'll be watching this one! _____________ | |||
|
| Do No Harm, Do Know Harm |
Nahhh..it's just that the wise ones with the answers are already in bed  Knowing what one is talking about is widely admired but not strictly required here. Although sometimes distracting, there is often a certain entertainment value to this easy standard. -JALLEN "All I need is a WAR ON DRUGS reference and I got myself a police thread BINGO." -jljones | |||
|
Only the strong survive |
Fairfax County has cellphone towers at some of its properties like some schools, etc. https://www.fairfaxcounty.gov/...9/62_cell_towers.pdf They can be a good money maker if you have the right location. In the old days, they had mobile repeater stations for the commercial people to use. They were a real money maker if you had the sites to give good coverage for the area. 41 | |||
|
Member |
I have actually appraised a couple of these. Depending on the length of the lease remaining, height of tower, number of device in range, project population growth in the area and the number of carriers on the tower, I have seen capitalization rates as low as the sub 5% range and Yield rates not much above. Leases I have seen are at least 20 years with multiple five-year renewals with escalations and revenue sharing depending on the income from the tower lease(s). This is similar to billboard valuation (one side, two sides, static, electronic, etc). If you have only one carrier on the tower, they may be setting up to add carriers after buying the ground lease. To make it simple if the base rental rate is $10,000 per year, at a 5% cap rate, that ground lease is worth $200,000. If there is revenue sharing, that can be accounted for, but at a different cap rate (usually higher due to uncertainty). Discounted Cash Flow Method discounts future income stream to current values and can include the sale of the property at the end of the holding period. This would account for all rent escalations, but if they add carriers, in the future, that may not be accounted for (uncertain if they will or wont). Be aware, that if the lease is terminated that generally means a tower isn't making money. You will have a bunch of scrap metal on your property unless the existing lease calls for equipment removal. Both methods should arrive at a similar conclusion. If your site is in Vegas area with a good traffic pattern, cap rates could be lower (a good thing). The more devices that are reached, the more rent a tower owner can charge to hang the equipment. Get a hold of an experienced tower appraiser and get your own opinion so you can negotiate. Ensure that you are their client and are able to provide an unbiased opinion. I will try to link an article or two. http://www.appraisalarticles.c...Site-Appraisals.html (Older, but reasonable article) Just know, the value of the remaining property can be reduced. Then again, it could be increased due to the income stream (assuming the lease income goes to the property owner, not you). There will be easements and such to allow access and you do not have the full ownership of the entire property. Set a baseline for property taxes and any increases due to the county's assessment of the tower footprint are on the owner of the lease. Read your existing lease carefully. If you sell your lease, you may get a large cash infusion, but the relative safety of that cash flow is what someone is buying. You may do better, if they are planning to add carriers, to benefit from the increased income stream. -.---.----.. -.---.----.. -.---.----.. It seems to me that any law that is not enforced and can't be enforced weakens all other laws. | |||
|
| Member |
I am a Realtor and sold a cell phone tower lease last year. I had several offers from companies that buy cell tower leases and had to give the lessee (renter/ATT)notice and first right of refusal. A branch of AT&T ended up buying the lease and I still had to give notice to lessee. | |||
|
| Raised Hands Surround Us Three Nails To Protect Us  |
Little faith you have! ———————————————— The world's not perfect, but it's not that bad. If we got each other, and that's all we have. I will be your brother, and I'll hold your hand. You should know I'll be there for you! | |||
|
Nosce te ipsum |
Wow, I'll be noticeably more intelligent-sounding at the next cocktail party! | |||
|
Member |
Have a friend who had one on his farm. Paid $3K a month with a 10 year contract. Of course, there was fine print. Company out of California offered a cash buyout of $120K. Friend passed in the offer. Several months later tower company relocated tower several miles away to another location. Payments stopped. Just an FYI. ========================================== Just my 2¢ ____________________________ Clowns to the left of me, Jokers to the right ♫♫♫ | |||
|
| Do No Harm, Do Know Harm |
Told ya so lol  Knowing what one is talking about is widely admired but not strictly required here. Although sometimes distracting, there is often a certain entertainment value to this easy standard. -JALLEN "All I need is a WAR ON DRUGS reference and I got myself a police thread BINGO." -jljones | |||
|
Nullus Anxietas |
How many times must you witness the wisdom and knowledge of the SF Oracle, o ye of litle faith  "America is at that awkward stage. It's too late to work within the system,,,, but too early to shoot the bastards." -- Claire Wolfe "If we let things terrify us, life will not be worth living." -- Seneca the Younger, Roman Stoic philosopher | |||
|
| Member |
Golf clap while I nod with approval. | |||
|
| Member |
In San Francisco there are no new roof top cell towers being allowed to be installed so existing folks that have them have a nice cash cow. Read the fine print of your contract though. It typically says the cell company can cancel it anytime with 30 days notice. Unless your in a place that is not allowing new towers to be installed. I just discussed his with a client recently as he has been offered cash now to sell his cell lease (this is a SF property so the above is relevant). The money he thinks he will get in the future off his building including future rent increases from the 2 cell companies paying him direct deposit monthly is not worth the implied rate the offer he got is worth. All it costs him is the utility bill to run the computers in the basement of his building each month. Of course he risk to you is if you sell the lease your stuck with that tower potentially forever long after that cash you got up front is spent AND the tower probably goes with the property if you sell it making it less aftractive to a future buyer. The risk to the lease buyer is the cell company may cancel next week. | |||
|
| I Am The Walrus |
How very wrong I have been! _____________ | |||
|
Telecom Ronin |
If you don't mind me asking, what company, I work for the 3rd largest tower company in N America. If you don't want to name it on the forum you can contact me via email There have been some good answers so far. | |||
|
| Victim of Life's Circumstances  |
I had a lease with Crown Castle since the 90s. Paid about 5k per year. They offered 40k to buy about 7-8 years ago. I countered at 150k and we split at 120k. Hard to get new towers approved these days. ________________________ God spelled backwards is dog | |||
|
| Member |
Wow that’s way more information than I thought I’d ever get. The tower itself is one of the big ones and overlooks one of the biggest intersections in town. We make $2300 a month off of it and for the price they are offering we could probably pocket some $ and put the rest into another rental house. That would come close to making up the difference on income and then we’d have some equity in a house. Our main problem is we have no idea how to value the lease. The lease itself is a 5 year lease that rolls over every 5 years with built in escalators. If we kept the lease for the 20 years we’d make about 800k and the offer we got was for marginally less than half. I believe there is more money available I just don’t know what the lease itself is worth. | |||
|
| Run Silent Run Deep  |
I'll give ya fiddy-cent... _____________________________ Pledge allegiance or pack your bag! The problem with Socialism is that eventually you run out of other people's money. - Margaret Thatcher Spread my work ethic, not my wealth | |||
|
| Victim of Life's Circumstances |
Same type lease I had. Worry free money. I countered my first lowball offer with a question: 'I've got the worlds best tenant so why would I sell for way less than the going % rate?' Got negotiations off on a friendly note. When I refused there was no more negotiation for a couple years and then Crown Castle made a better offer. There was a little back n forth via email and we made the deal. Zoning boards are anti towers these days so if you've got an approved site they aint leaving. I priced mine at the amount it would take to generate near same income at current market rates. ________________________ God spelled backwards is dog | |||
|
| Powered by Social Strata |
 | Please Wait. Your request is being processed... |
|
© SIGforum 2024