What is APWireless buying exactly?
We are essentially buying the rights to receive cell tower or rooftop rent for a specified period of time with certain limited rights to ensure our ability to collect the rent. The legal term for this type of transaction is called a “leasehold interest.” In some cases we may also seek an easement, which is simply the right to use another person’s real estate for a specific purpose, namely telecom communications.
How much will APWireless pay for my cell tower lease?
The amount of the lease buyout depends on the rent being received, the wireless carriers on your property, the terms of the lease, the cell tower or rooftop antenna location, the duration of the buyout period, and a number of other variables that make up our own risk assessment.
Wouldn’t I make more money by keeping the cell tower lease?
This depends of course on how you choose to use or invest the money and whether your wireless tenant obtains a future rent reduction or if the lease is eventually terminated. Even if your cell tower rent continues unchanged, the cash flow associated with your wireless lease will be distributed in small increments over a long time. In most cases, the comparison between receiving a lump sum amount today versus collecting smaller and uncertain incremental rent payments over a long-term period is the key decision point. Click here for potential investment scenarios.
What happens if the wireless carrier terminates the lease or stops paying rent?
You will keep the full amount of the up-front lump sum, even if the wireless carrier terminates the lease at any time during the lease buyout period. In other words, your cell tower lease buyout unconditionally transfers the risk of termination to APWireless with “no strings attached.”
If my cell tower lease can be terminated, why do you want to buy it?
For most cell tower landlords, receiving site rent is an “all or nothing” proposition: either they receive rent, or they don’t. On the other hand, APWireless is building a portfolio of cell tower and rooftop leases in which a single lease termination is far less impactful. For this reason, APWireless is able to assume the risk of your cell tower lease being terminated and pay a large, up-front lump sum for the future rent associated with your site. In addition, APWireless purchases future rent on a discounted basis reflecting the financial risk associated with potential cell tower terminations.
Can wireless carriers terminate my cell tower lease at will?
Depending on the language in your contract, carriers can terminate your cell tower lease for many reasons, typically with only 30-90 days’ notice. For this reason, it is generally difficult to borrow against a cell tower lease at your local bank, and also why APWireless spreads the risk of your wireless lease being terminated across a large portfolio of sites.
Is this transaction allowed within the terms of my wireless lease agreement?
Cell tower lease buyouts, otherwise known as lease prepayments, are universally accepted and recognized by wireless carriers in every jurisdiction where we do business, and the specific terms of the lease buyout are recorded with the local land registry. In the event that your tenant has a “Right of First Refusal” clause in the lease, the transaction may require approval but this generally isn’t necessary.
If I have multiple tenants, would a cell tower lease buyout apply to all of them?
A cell tower lease buyout applies only to those wireless leases which you choose to sell. Assuming your cell tower or rooftop leases meet our criteria, APWireless will make you a lease buyout offer it will stand behind.
If I convert my cell tower lease to cash, will I still own the underlying property?
Yes. APWireless only purchases the rent specifically associated with your cell site. Furthermore, after the lease buyout period has come to an end, the right to receive all cell tower rent will revert back to you – unless you choose to enter into another cell tower lease buyout.
What happens if I sell my property?
You are free to sell your property without any restrictions and keep the money you received from the cell tower lease buyout in its entirety. Since the lease buyout transaction is recorded with the local land registry, our contract remains valid and transfers to the new property owner, along with any rents associated with the cell site after the lease buyout period is over.
How long will it take to receive my cell tower lease buyout?
The process is straightforward, but how long it takes is largely dependent on how quickly you are able to provide the required documentation. Once we receive a valid, signed agreement from you we will typically send you a check within 30 days.
How do I know APWireless can fund the lease buyout transaction quickly?
APWireless is wholly-owned and funded by Associated Partners, LP and KKR & Co., LP. We also issued $115 million of 5-year notes for which we received a BBB securitization rating, the highest in the industry. This ensures our ability to execute and enables you to receive your lump sum payment quickly. Click here for news about KKR’s investment in APWireless.
How does APWireless make money?
We seek a reasonable return on our investment for the risks associated with the assets we purchase and only receive this return if the cell tower leases reach the full term of the lease buyout period. Each year we know we will lose a percentage of cell tower and rooftop antennas in our portfolio due to mergers, consolidations, technology changes, etc. We actually lose money on those decommissioned cell sites, but we offset these losses by adding additional wireless carriers or negotiating upgrades, modifications and expiring cell tower leases.
What happens to my cell tower once you acquire it?
Generally, very little changes. After the transaction has closed and you have received your funds, we notify the wireless carrier(s) of the change of landlord. From that day forward until the end of the lease buyout period, we deal with the carrier(s) regarding financial management of the cell tower. We will also coordinate with you if a site visit or major works are planned, or if additional wireless carriers show interest in coming on to your property.
How do I get started?
APWireless will provide you with an appraisal of your lease to determine if your site qualifies. Email us or to speak directly with one of our lease specialists, please call 888.299.1560.