CELL TOWER LEASE BUYOUT OFFERS… QUESTION… IF CELL TOWERS MIGHT BECOME OBSOLETE, WHY DO I GET OFFERS TO SELL MY FUTURE RENT?!
Unpopular Opinion by Steve Kazella, Partner at Tower Genius:
Hello there again, this is Steve. I’m one of the Partners at Tower Genius, we are a consulting firm that helps property owners and cell tower landlords figure out what the heck is going on with these cell tower lease buyout proposals, cell tower lease rent values and cell site lease rates. We help attorneys, we help municipalities, we help utility companies, we help churches, we help real estate developers, basically we help anybody with a cell tower lease question . We are a company that doesn’t work for the wireless carriers or cell tower lease buyout companies, we’re only on the property owner and cell tower landlord side. We help you make sense of these lease rental stream purchase offers, make heads or tails of the values, and provide you with the wireless industry insider information that you need when you go to war with the buyers of these carrier leases and easements. And trust me, it is a war. It is a battle. They are your adversary.
Let’s talk about the elephant in the room.
I just want to answer a quick question here. One of the questions that we frequently get from people who receive cell tower rental income, and this is from cell tower landlords that already have a cellular tower on their property, or they have a cell site on their roof. And you folks, you know who you are, and you get the purchase offer letters, you get the we buy cell tower leases phone calls, you’re bombarded with perpetual easement sale offers from cell tower lease buyout companies, from cell tower management companies, from digital infrastructure hedge funds, and all kinds of buyout offers that you receive to sell your cell tower lease income, we’ll give you cash now for your cell site rent, we want to give you a lump sum payout for your cell tower lease rental stream future payments, yada yada yada.
You might have a stack of those offer letters in a file or in a box somewhere and you might get buyout offers weekly or monthly, and you’re also getting phone calls. And so the question is, I just want to put that in context a little bit, the question that we get frequently has to do with wireless technology changes and the potential obsolescence of cell sites. Will technology change so much to make cell towers obsolete, or at least less valuable for landlords, especially on these high rent, rooftops, urban areas. What about 5G? What about 6G? What about Elon Musk and his satellites? What about cell towers floating on balloons? What abut cell towers on the moon (yes it’s a thing), what about small cells? What about distributed antennas systems? I could go on and on…
The information here that I’m going to give you is important. About 10 years ago, actually 14 years ago, when our first blog posts were written… Well, actually we started publishing content back in 2008. Then we started blogging around 2009 on our two older websites, www.cell-phone-towers.com and www.cell-tower-leases.com . But we really didn’t see a lot changing in the industry.
But in the last four or five years all the buzz has been about 5G. Well, 5G is going to definitely impact the value of cell sites going forward in the next 5 to 10 years. I just can’t see beyond that.bI’m not Kreskin. I don’t have a crystal ball. But I do see trends, and so here’s a big question that a lot of people are just shaking their heads over or scratching their heads, why the heck am I getting phone calls from all these people that want to buy my cell tower lease if you guys are also saying that, hey, this stuff’s going to maybe go away or be less valuable?
Why does anybody want to spend $500,000, $250,000, $1 million dollars, $2 million, $3 million dollars to buy my cell site lease or my portfolio of towers? Why are they looking to purchase this thing, if this stuff’s potentially going away? Doesn’t make sense.
Well, it kind of does. I understand the question.
Here’s my answer for you, and it’s just real simple.
Everybody’s played the game musical chairs growing up or maybe as an adult, who knows, but musical chairs, you’re okay just until the music stops playing. You want to be in a seat, you want to be sitting down, you don’t want to be winding up on the floor.
And this is what’s going to happen here in the wireless industry, the financial side of it, where people or cell tower lease buyout companies are holding a lot of these rooftop cell site leases. Emphasis is on urban rooftop cell sites in the big NFL-type cities like NYC, Chicago, Los Angeles, Miami, Dallas, and the like.
I’m talking about the folks and technology infrastructure hedge funds that have these real estate investment trusts that are holding portfolios of rooftop cell site leases. You’re going to be in for a rude awakening, because most of these cell sites are not going to be worth as much in 15 years — or less. Some of them might not even be there in these really, really densely populated urban areas where they’re going to deploy hundreds and hundreds and hundreds of 5G antenna nodes (small cells) for only $270 / year rent and they won’t need to pay you $6,000 – $7,000 a month on that AT&T, or Verizon, or T-Mobile rooftop cell site, if they could just put in 10 or 20 small cell nodes around there and get the capacity they need for less money. And I expect this to trickle down to towers to some extent, but the suburban and rural locations should be safe for the most part unless the bottom falls out of the lease buyout industry. But again, this is one opinion and speculation not fact, but this is what I believe is coming.
So what happens next? These cell phone tower lease buyout companies, why do they want to offer me a half million dollars for my rooftop cell site lease if it might become obsolete? Well, because they’re going to take that, they’re going to package it off, and they’re going to sell it to some hedge fund on Wall Street, who’s going to sell it and going to sell that again. It’s one big casino and Ponzi scheme in my opinion, and if you are a cell tower landlord you just want to transfer that risk, and you don’t want to be holding it. At the end of the day, you want to be sitting in a chair when the music stops.
While this may be an unpopular opinion, it is mine nonetheless and at Tower Genius LLC we stand by it.
If you have questions about the cell site or cell tower lease buyout offer you have recently received, give us a call to discuss.
Tower Genius 1-888-313-9750.