When considering selling a cell site lease, many property owners worry about the implications for their underlying real estate. Do you have to sell the land along with the lease, or can you retain ownership of the property while selling the lease rights?
This is a common concern among property owners who are looking to monetize their cell site leases but may not want to part with the land itself. The good news is that selling a cell site lease does not necessarily mean giving up ownership of your property. In fact, there are flexible transaction structures that allow you to sell the lease rights while retaining the land.
How can I sell my sell my cell site lease
In a cell tower lease buyout, the investor acquires only the rent and other easement rights associated with the collection of rent related to the cell site lease.
The real estate can be sold separately or not at all. The rights to collect rent also have an expiration date. So, after the lease buyout period has come to an end, the right to receive the cell site rent will revert back to the property owner.
Once the rights are reverted back to the property owner they can then be sold again through another cell site lease buyout.
Understanding the Cell Site Lease Buyout
In a cell site lease buyout, Wireless Equity Group acquires the rights associated with the lease, including the rent payments and any easement rights related to the cell tower. However, this transaction typically involves only the lease rights and not the underlying property itself. This means that as a property owner, you can sell the income generated by the cell tower lease without having to sell your land.
Selling the Lease vs. Selling the Property
When you sell your cell site lease, you’re essentially transferring the right to collect rent and any other associated benefits from the lease to Wireless Equity Group. The land, however, remains under your ownership unless you decide to include it in the sale. There are two primary ways to structure these transactions:
- Fee Simple Transaction (Selling Both the Lease and Property):
In a fee simple transaction, Wireless Equity Group acquires both the lease rights and the underlying property. This type of sale is often chosen by property owners who want to fully divest themselves of the land and the lease. While this provides a significant lump sum of cash, it also means you relinquish all ownership and future rights to the property. - Easement Creation (Selling the Lease Rights Only):
Most property owners prefer to retain ownership of the land while selling only the lease rights. In this case, an easement is created that grants Wireless Equity Group the right to collect rent and possibly some limited access rights to the property. The easement does not transfer ownership of the land itself—only the rights related to the cell tower lease. After the buyout period ends, these rights revert back to you, the property owner, and you can negotiate a new lease or another buyout in the future.
What Happens After the Lease Buyout?
One of the key advantages of selling your cell site lease but not the land is that you retain long-term control over your property. Here’s what happens after a lease buyout:
- Lease Rights Reversion:
The rights to collect rent from the cell tower lease typically have an expiration date, often corresponding to the end of the current lease term or a set number of years agreed upon during the buyout. Once this period ends, the rights to receive rent payments revert back to you, the property owner. - Opportunity for Future Transactions:
After the lease rights revert back to you, you can explore additional opportunities, such as negotiating a new lease with the current tenant or selling the lease rights again. This cyclical opportunity can provide ongoing financial benefits while you continue to own the land. - Continued Ownership and Flexibility:
By retaining ownership of the property, you keep your options open for future development or sale. For example, if the area around your property becomes more commercially desirable, you could sell the land at a later date for a potentially higher value.
Why Consider a Lease Buyout?
There are several reasons why a property owner might consider selling their cell site lease while retaining ownership of the property:
- Immediate Cash Flow:
A lease buyout provides a substantial lump sum payment upfront, which can be used for a variety of purposes, such as paying off debts, reinvesting in other opportunities, or funding personal expenses. - Risk Management:
Cell tower leases come with certain risks, such as the possibility of lease termination or rent reduction. By selling the lease, you transfer these risks to Wireless Equity Group while securing your financial position with an upfront payment. - Retaining Property Control:
By selling only the lease rights and not the property, you maintain control over the land. This allows you to benefit from any future appreciation in land value and keeps your options open for future development or sale.
Conclusion
Selling your cell site lease does not mean you have to part with your property. Whether you choose a fee simple transaction or create an easement to sell only the lease rights, you can tailor the sale to meet your financial goals while retaining ownership of the land. This approach provides flexibility, allowing you to benefit from immediate cash flow while keeping long-term control over your property. After the buyout period, you may even have the opportunity to sell the lease rights again, making this a potentially ongoing source of income.
If you’re considering a cell site lease buyout, it’s essential to consult with financial and legal professionals to ensure the transaction aligns with your overall investment strategy and long-term goals.
