- Wireless tower operators and cellular carriers typically build cell towers and rooftop antennas on property they do not own, and therefore usually enter into a lease agreement with the property owner to allow their equipment to be placed on premises. The tower company or wireless carrier benefits by being able to build out its network without owning the underlying land, and the property owner benefits by receiving rent pursuant to the cell site lease agreement.
- A cell tower lease buyout is simply a lump-sum payment given to the property owner in exchange for the right to receive cell site rent moving forward. It typically does not affect the ownership of the property, nor the rights that the tower company or wireless carrier has in the lease agreement.
- Like other real-estate transactions, the specific terms of a cell tower lease buyout are captured in a contract that is typically recorded in the local land registry. This ensures that even if the property changes hands or if the cell tower tenant changes at some point in the future, everyone’s rights are protected.
- While location is a consideration in determining the amount of the lease buyout, there are numerous other variables and risk factors involved as well. The terms of the tower lease agreement, prevailing interest rates, the carrier(s) on the property, the time value of money, and of course the rent are just some of the many aspects considered when placing a value on a cell tower lease.