Selling property with cell tower leases

When selling property with cell tower leases that will transfer, a seller can maximize the net profits they will make by either (a) completing a separate lease buyout or (b) providing a written Letter of Intent (LOI) from Wireless Equity Group to prospective buyers seeking to purchase property with cell tower leases in place.

Selling real estate with a cell tower lease in place can be complex, but with the right approach, you can ensure that you’re getting the best possible return on your investment. This article explores the methods to maximize your net profits, the role of an LOI, and the various benefits that come with it.

Valuation of a Wireless Tower Lease

Too often, real estate agents attempt to value cell tower leases using cap rates, a method commonly applied to commercial real estate. However, this approach may not fully capture the true value of a cell tower lease, which means sellers might miss out on potential profits. Valuing a cell tower lease involves several unique factors, and understanding these can make a substantial difference in the final sale price.

Key Factors in Cell Tower Lease Valuation:

1. End Buyer Considerations:
   The value of a cell tower lease can vary significantly depending on who is purchasing the property. For example, an individual buyer or a company that is not in the telecommunications industry might only consider the current rent being collected from the lease. This is especially true if the lease includes a 30-day cancellation clause, which can significantly diminish the perceived value to non-industry buyers.
2. Telecommunications or Tower Company Perspective:
   Conversely, a telecommunications or tower company will typically assess the lease with a long-term perspective, considering factors such as the potential for adding additional carriers to the site and the future revenue growth of the area (e.g., population density and projected growth). This forward-looking approach often results in a much higher valuation, sometimes estimated at nearly 18 times the annual rents collected. This disparity underscores the importance of targeting the right buyer when selling a property with a cell tower lease.

Letter of Intent to Purchase a Cell Tower Lease

You may own a property that could be difficult to sell if it didn’t have income from the current cell tower. This situation often leads property owners to decide against selling the tower separately from the real estate. However, you can maximize the net sale value and provide additional incentives to a buyer by obtaining a Letter of Intent (LOI) from Wireless Equity Group.

In some cases, the income generated by the cell tower is a significant selling point, making the property more attractive to potential buyers. This can create a dilemma: should you sell the lease separately, or should you include it as part of the property sale?

One effective way to maximize your property’s sale value while still benefiting from the lease is by securing an LOI from Wireless Equity Group. An LOI is a written offer from an investor or company expressing their intention to purchase the cell tower lease. This document can be a powerful tool when selling your property.

Benefits of an LOI When Selling Property with Cell Tower Leases

Securing an LOI from Wireless Equity Group before listing your property for sale offers several advantages that can help maximize your profits and simplify the transaction process:

1. Enhanced Property Value:
   The LOI provides prospective buyers with a clear understanding of the potential value of the cell tower lease. This transparency can make your property more attractive to buyers who might otherwise undervalue the lease. By showing how much a tower company would be willing to pay for the current income on the tower, you can justify a higher asking price for the property.
2. Concurrent Closing:
   Wireless Equity Group can agree to close the lease buyout concurrently with the sale of the property. This coordination allows the funds from the lease buyout to be used towards the down payment, closing costs, or even to reduce the overall purchase price of the real estate. This flexibility can make the transaction more appealing to buyers, potentially leading to a quicker sale at a higher price.
3. Negotiation Leverage:
   Having an LOI in hand provides you with leverage during negotiations. You can use the LOI as a bargaining chip to secure better terms from potential buyers, whether in terms of price, closing conditions, or other important factors. This added leverage can result in a more favorable deal for you as the seller.

Selling real estate with a Cell Tower

Selling real estate that includes a cell tower requires a nuanced approach, especially if you want to maximize your profits. Unlike most tower companies, Wireless Equity Group’s founder has over 20 years of real estate experience, offering a unique advantage in this process. They may also be interested in purchasing the real estate itself, not just the lease. Contact our real estate acquisitions team at 858-295-3040 or request a free site valuation if you believe your property fits our criteria.

Here’s how working with Wireless Equity Group can benefit you:

1. Streamlined Process:
   By working with a company that understands both the real estate and telecommunications industries, you can simplify the sale process. This can save you time, reduce the hassle of dealing with multiple parties, and potentially save you thousands in fees.
2. Targeted Locations and Flexibility:
   Wireless Equity Group actively seeks properties with cell tower leases in key locations such as California, Arizona, Idaho, Oregon, Utah, Montana, New Mexico, and Nevada. However, they are open to purchasing almost anywhere if there is upside potential, giving you broader opportunities to sell your property.
3. Maximizing Net Profits:
   Whether you choose to sell just the lease or the entire property, working with Wireless Equity Group can help you maximize your net profits. Their expertise in both industries allows them to accurately assess the value of your lease and property, ensuring you receive the best possible deal.

Selling Property with Tower Leases That Have Been Sold

Depending on who you sell your tower leases to, you are still free to sell your real property separately without any restrictions. When selling property with cell tower leases to our Tower Investors, you keep the money you received from the cell site lease buyout in its entirety.

Since the lease buyout transaction is recorded with the local county recorder’s office, our contract remains valid and transfers to the new property owner, along with the rights to any rents associated with the cell site after the lease buyout period is over.

If you’ve already sold your tower lease to an investor like Wireless Equity Group, you still retain full ownership of the real estate. This means you’re free to sell the property at any time without restrictions. Here’s how it works:

1. No Double Dipping:
   After selling the lease, the transaction is recorded with the local county recorder’s office. This ensures that the lease rights transfer to the new property owner, but you retain the money received from the lease buyout in its entirety.
2. Seamless Transition:
   The lease buyout contract remains valid and transfers to the new property owner along with the rights to any rents associated with the cell site after the lease buyout period ends. This seamless transition ensures that the lease continues to generate income for the new owner, making the property more attractive to potential buyers.
3. Future Sale Opportunities:
   If you decide to sell the property, the new owner can benefit from the existing lease arrangement, or they may choose to negotiate a new lease or sell the lease rights again in the future. This flexibility can increase the property’s overall appeal and value.

Conclusion

Maximizing profits when selling property with a cell tower lease requires careful consideration of how the lease is handled. Whether through a separate lease buyout or by securing a Letter of Intent from Wireless Equity Group, property owners can enhance the value of their transaction and ensure they are getting the best possible return. By understanding the valuation process, leveraging the benefits of an LOI, and working with experienced professionals, you can navigate the complexities of selling real estate with a cell tower lease and achieve a successful, profitable sale.

If you’re considering selling property with a cell tower lease, it’s essential to explore all your options and consult with experts who can guide you through the process. With the right strategy, you can maximize your net profits and make the most of your investment.