Lease to Easement Conversion

Wireless Equity Group can help convert your cell tower/antenna lease agreement to a telecommunications utility easement at no cost. The rights can then be sold to a utility infrastructure REIT or hedge fund (tower company) for a set period of time at up to 270x the monthly rents collected! The tower company or infrastructure investor then becomes a partner with the property owner and any revenue from additional carriers that are added to the easement is shared with the property owner

Benefits of a Utility Easement

You don’t have to sell your property or subdivide (unless you want to) when you convert your lease to a telecommunications or utility easement. The property owner can then cash out with a large lump sum or structured payment at an average of up to 270x the monthly collected rents. Those funds can then be re-invested into higher-performing assets in addition to receiving the following benefits:

• Utility Easements have preferential tax treatment; are partially exempt and qualify for long-term capital gains.
• Perpetual Easements qualify under 1031 exchange rules; allowing property owners the ability to buy additional real estate of equal or greater value.
• Pulling out Equity now on your cell tower/antenna lease eliminates the risk of a wireless carrier terminating or renegotiating their lease
• Re-investing into higher-performing and more flexible assets can be a hedge against increased inflation.

Ways our Clients Re-Invested funds and outperformed their telecom lease revenue

• Paid off debt
• Bought more real estate
• Re-Invested in their business
• Renovated their current property to increase value
• Set up a college fund
• Invested in Retirement planning – 401k/Life Insurance

Utility Easement Requirements

In order to create a cell tower easement, there are several due diligence items required by the end purchaser which include but are not limited to the following:

1. Receipt of a title commitment from showing title clear of any liens, encumbrances, outstanding taxes which are otherwise due and payable, or other unsatisfied title closing requirements necessary for an insured closing with marketable title;
2. Approval of the Easement Agreement in a mutually agreeable form;
3. Proper documentation of the Lease and rents, including your affirmation that you have not received any written or verbal notice of termination, modification or other correspondence from the tenant related to the Lease;
4. Compliance with any tenant right of first refusal or consent requirement, if applicable, related to Landlord’s assignment of the Lease;
5. Desktop environmental database search returns a determination of “Low” or “Moderate” risk.
6. Proof of Rent Payments under the Lease (minimum of 3 months received in the last 6 months); e.g.: copies of rent checks/stubs and/or direct deposit statements.
7. Landlord Request for Information (RFI): Completed and executed including social security numbers for individuals with 20% or greater ownership positions in the entity which owns the property.
8. Landlord’s comments or Landlord’s counsel’s comments, if any, to the Easement Agreement (“Easement”)
9. If an existing mortgage is in place on the property: A Mortgage Statement and Lender contact information for obtaining a non-disturbance agreement from Lender (required only if the property is encumbered by a Mortgage, Deed of Trust, Line of Credit or similar instrument).
10. Legal entity organizational documents (including any Amendments thereto) showing proof of authority, for all entities owning an interest in the Property

Cost to Convert to a Utility Easement

There are no costs to you, as the property owner, for converting your lease agreement to a utility easement. When you sell your cell tower easement to a tower investor the tower company agrees to cover all closing costs except for any transfer taxes associated with the closing.

Utility Easement Timeline

The process to convert a wireless lease to a utility easement is based on several factors. The general timeline to convert a cell tower lease agreement to a telecom easement can be completed in 14-90 days depending on the terms of the current cell site lease.