SBA Communications leases about 6,000 cell phone towers to major wireless service providers, including Verizon Communications, Sprint, T-Mobile, Alltel, and AT&T. The company trails leading rivals Crown Castle International and American Tower in terms of market share, with around 11% of total industry revenue in the United States. SBA Communications has fewer towers and generates less revenue per tower, as it does not enjoy the scale and efficiencies of its rivals.
SBA Communications, like many similar cell tower companies, is looking to buy out existing cell tower leases and has made a dedicated effort to contact property owners to offer them this buyout option. SBA Communications will typically structure a lease buyout as a simple, one-time payment for both assigning a property owner’s remaining rights under the lease and also converting the current lease to a long term or perpetual easement. The motivation for SBA Communications is mostly driven by the need of that company to secure time it requires at the site. This transaction is also beneficial to SBA Communications in that it is financially advantageous as it secures SBA Communications revenue streams, which is the primary motivating factor for that company, and it also makes their investors happy.
SBA Communications will suggest that future technology will make the current telecom equipment on the cell tower location obsolete and that the corresponding near termination of their lease may be eminent. Moreover, especially in today’s environment, with companies announcing merger deals, tower companies will sometimes allude to the fact that because of consolidation, a property owner’s lease may ultimately be substantially shortened.
So, why would a landowner ever agree to a lease buyout? A cell tower lease buyout may present an opportunity for a property owner to immediately realize the value of their cell tower lease. In some cases, if structured correctly, this can be advantageous, as a properly structured buyout can far exceed the present value of the projected rents to be received over the life of the lease. A cell tower buyout can also be valuable due to the fact that most existing cell tower leases have very favorable tenant termination provisions, so an immediate realization of these rents can eliminate the risk of this revenue stream ceasing to exist in the future.
The only way to truly determine fair value is to have an expert in the telecom industry review not only your lease, but the existing tower located on your property. True value of any buyout is not based on what your current rent is, but on what the utility and value of that site is to the party leasing it. Just like when presented an offer to extend your current lease, a lease buyout is an important negotiation and should be based upon the true value of that lease, as determined by multiple factors surrounding not only the actual lease, but also the physical site location and telecom equipment located thereon. SBA Communications will not provide you the information you need to make a decision that could mean hundreds of thousands of dollars. Why should they? They have their best interest in mind, not yours.
If you do wish to sell your cell tower or rooftop lease, we can work on your behalf to optimize the net value you receive. We have years of experience in determining what the true value of a cell tower lease is and what a third party, such as SBA Communications, should be paying for such an asset.
The worst mistake you can make is not having the information and proper counsel when you are presented with such a deal. You could be leaving tens of thousands of dollars on the table, if not more. Cell tower companies do not want you to have the same knowledge they do, nor do they want you to be properly represented.
Vertical Consultants will provide you with expert representation, which will include not only negotiating on your behalf the maximum buyout for your cell tower lease (in some cases we have been able to garner up to 50% more than originally offered), but we will also assist you in the negotiation of all documentation associated with such a transaction to make sure you not only get the most, but give up the least. The company buying your lease has experts on their side trying to make the best deal for them, shouldn’t you have the same?
We encourage you to contact us today to discuss any cell tower lease buyout offer you receive. We will be glad to discuss what services Vertical Consultants can provide you.