Beware… It is Landlord Season, and Elmer Fudd from cell tower lease acquisitions is dangling the carrot in front of you again. Talk to us if you’ve received a cell tower lease buyout installment offer.
Steve Kazella: All right. So this is why it’s important to pay attention to what type of cell tower lease buyout offer you actually take. So we have had a conversation recently with a cell tower landlord that got an offer from a large cell tower management company. Basically, this individual has a pretty hefty base rent, and it’s an older cell site that the rent has increased many, many times over a couple decades. And they were offered a $2.7 million payout over, gosh, I think it was 17 years (instead of a lump sum). So it works out to, I don’t know, $13,000 a month. The only problem with this offer is really, hey, it sounds great. First of all, I don’t like the long-term payouts. I really don’t trust what that money’s going to be worth in 15 or 17 years. But the other thing is it’s not that much more, that maybe it’s a little bit more, I don’t want to give away the guy’s base rent. But at the end of the day, this certain cellular tower company’s picking up this lease for about 14 and a half, multiple of only 14.5 times over time. Yeah. $2.7 million sounds great, but it’s only adding onto the base rent that they were already getting. So it’s really not a great offer at all. So then the other offer was for shorter term and still at a 14 and a half multiple, which is that stinks. That’s a low offer. So anyway, they dangle the carrot in front of you. You’re a cell tower landlord and a tower company is dangling the lease buyout offer carrot in front of you, you need to talk to somebody that sees these things and can help you decipher what the heck they’re talking about. Because trust me, they’re not going to tell you.
Cell Site Lease Value Questions?