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Existing leaseholders are likely getting contacted on a regular basis with offers are for a buyout. Oftentimes, a contact is actually a middleman or contractor working on behalf of an actual buyer. We work with over 12 different direct investment buyers on a regular basis that we are confident can close with realistic terms.
Being able to navigate a transaction and demand top dollar is just part of the value we bring as your expert.
Typically, you will get a lump-sum offer for your cell site lease. Depending on various factors, you will get a valuation between 10-20 years worth of the current annualized lease rate. The transaction requires you to assign your lease and grant an easement to the purchasing investor. What actually impacts value? Here are a few points:
Each buyout we analyze is sent out to bid to a minimum of 5 different investors and lease aggregators. This ensures a highest bid process and seeks out the best deal terms, such as easement length, future revenue sharing, and even site relocation.
Closings typically take 60-90 days. While a 30 day is possible, many deals have requirements that push the timeline. The process is similar to a traditional real estate sale so be prepared for items such as surveys, title, entity verification, on-site inspections, and escrow closing.
Be aware that if your property has a loan on title, that lender will need to sign a “Subordination and Non-Disturbance Agreement” commonly referred as a SNDA. Why is this important? Purchasing investors are looking to preserve their cash flows in the event of default. While this captures maximum value, if for some reason the SNDA cannot be obtained, there are other ways to close.
When structure correctly, proceeds from a buyout can receive capital gains tax treatment and qualify for a 1031 exchanges. It is best for you to consult with a tax professional before any transaction and we can communicate with them our experiences.
Collective Wireless LLC is a telecommunications infrastructure developer focused on providing property owners a consultative approach to generate income and improve community coverage.