Leasing out your land for wireless carriers to use for their cell towers is undoubtedly bringing you a stream of recurring income. While this may be the case now, it is important to always know your options in terms of selling your cell-site lease so that you can minimize risk and maximize the value of your position.
There are multiple reasons to consider selling your cell tower land lease to an outside agency. Comparing the benefits to your existing situation will help you make a decision that is best for you and your organization in the long run while also helping meet your short-term goals.
Gain More Control Over Your Land
Regardless of the stated maximum term of your lease, 99 years for example, cell site leases can be terminated by the tenants in 30 to 90 days. You may think that you are secure with your lease in place when, in fact, there is always a way out for the wireless carrier than can leave you in a rough spot financially with little notice. In addition, you may face the threat of lease termination (typically from third-party groups) if you don’t agree to reduce the amount of rent you collect. Selling your cell tower land lease rids you of this stress while giving you an upfront payment based on the value of the factors included in your lease.
Get Access to Needed Capital
Are you looking for a way to pay down debt or need money in order to start or expand your business? Selling your lease helps you get the untapped capital you are looking for. Even if you are not facing termination threats or other risk factors such as impending mergers between wireless carriers, selling your lease is an excellent way to achieve these goals. Since it is generally tough to borrow against the lease at a local bank, you can sell your lease for a short period of time (10 years) to get the capital you need now and reevaluate your position in the future.
Minimize Your Investment Risk
One of the trickiest parts of entering into a cell tower lease is knowing the true value of your land to the wireless carrier. Entering into a long-term lease can be attractive because it seemingly will provide income for many years to come. However, mergers and other trends in the wireless communications industry can put your lease in jeopardy because the carrier may decide to eliminate the tower.
In addition, you may not be losing out on potential rent because of the appreciation of your land. Selling your cell tower land lease leaves you in a safer position because it provides you with money you can use to reinvest in more substantial options while also allowing you to retake ownership of the lease in the future. This way, you may be able to sell again when the value of your lease increases so you make more in the long run.
There are experienced companies looking to purchase your cell tower land lease because it allows them to obtain necessary investment capital. In the end, you raise the money you need to boost your finances and relieve yourself of the immediate risks of holding the lease. Research the options you have for your cell-site lease so you can make a decision that is in your best interest.
Written by Matt Jones, marketing at Wireless Capital.