When dealing with cell tower leases and the land they are tied to, how does a property owner ensure he or she doesn’t give away the proverbial “gold mine” they’re sitting on when it’s time to sell? According to The National Law Review, two recommended options make financial sense.
The first option is to sell the lease and future leasing rights prior to turning over any property or buildings.
Per the Review, a seller can anticipate a price that’s 17.5 times that of annual revenues in this scenario.
The second option is to sell the property or buildings but retain the tower or antenna lease and future leasing rights. The National Law Review provides an example where an owner can “sell” the lease/future leasing rights to an LLC created and owned by the seller before transferring any buildings or property. This option allows the seller to obtain the full sales price of the property or structures while retaining rental income from the cell tower lease.
The Review, cautions against selling property and leases together, as this is not the most lucrative scenario. The bottom line, to ensure the seller gets the best deal, is to negotiate property and tower leases correctly and in the right order.
October 4, 2019
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