Cell Tower Lease Buyouts: Key Considerations

If you have a cell tower lease or a rooftop antenna site lease on your property, you have been contacted about selling it. These offers come with attractive upfront payments, but the long-term cost may be far greater than you realize.

There are many different factors that need to be incorporated into any cell tower lease buyout transaction, including:

What Are the Access Rights and Requirements?

Access is often one of the most overlooked pieces of a buyout. Once you sell your lease payments, you may still need to think about how the tenant – or a future owner of that lease – gets to and from the equipment, whether that’s through your driveway, a shared easement, or a path across the rest of your property. It’s worth pinning down exactly what access rights exist today, and what a buyer expects to have going forward.

Are Additional Rights Being Requested Beyond the Existing Lease?

Buyout offers frequently ask for more than what your current lease actually grants – broader easement rights, expansion rights, or the ability to add equipment or co-locate additional carriers. It’s worth comparing the buyout paperwork line by line against your existing lease so you know exactly what you’d be signing away, rather than assuming it only covers what’s already there.

Is the Price Actually Fair?

A buyout price is generally a multiple of your current income stream, along with assumptions about renewal likelihood, market rent growth, and how important your site is to the surrounding network. Buyout companies build these models to work in their favor, so a second opinion before accepting an offer can be worth far more than the offer itself often reflects.

Are There Different Tax Implications Depending on How the Deal Is Structured?

A lump-sum buyout may be taxed differently than the recurring rental income you’ve been receiving, and the details can shift depending on whether the deal is structured as a sale of income rights, an easement, or something else entirely. This is an area where it’s worth having your own tax professional review the specific structure before you sign – we can help you understand the questions to ask, but we’re not the ones who should be answering them.

What Happens If the Property Is Redeveloped?

If you ever want to redevelop, expand, or sell the property in the future, a long-term buyout agreement can come with restrictions on what you’re able to do with the land underneath or around the site. It’s worth asking directly how a proposed buyout would affect any redevelopment plans you might have, even ones that feel a long way off right now.

What Options Do You Have If a Problem Comes Up After the Sale?

Once a buyout closes, your leverage to address problems – a tenant who isn’t maintaining the site, unclear boundaries, or a dispute over access – can look very different than it did when you still held the lease. It’s worth understanding, before you sign, what recourse, if any, the buyout agreement leaves you.

Rooftop Sites Add Their Own Layer of Complexity

Rooftop leases tend to raise their own set of questions – building access, equipment routing, roof penetrations, and how a buyout interacts with your relationship with other tenants in the building.

Gunnerson Consulting has experience with all aspects of the lease buyout market. We can help you make the most informed decision possible. By looking at your goals, and developing a solution that is specific to your needs, Gunnerson Consulting provides the tools and knowledge to help you through this process.