Cell Site Lease mistakes by MunicipalitiesPosted March 31, 2014 by admin
Recently we had been sent a lease that an municipality was close to executing on a water tank. The basics of the lease had a $1,320 a month in rent with 7.5% increases every 5 years to the rent with a major U.S. carrier. Sounds like a good deal, right? No, not really. The average market rents for the area were higher than the proposed lease amount. The bigger issue is the escalation clauses. The proposed escalation percentage is less than half of what the market wireless lease escalations should be. If nothing changed with the cell lease rent amount and we just changed the escalation clauses to the current market for cell site leases, the difference in value was $133,ooo over the life of the cell site lease term. More importantly, if the City ever was to liquidate the cell site lease via a buy-out to would have been devalue the by an additional $200,000. Overall they almost missed out on over $330,000 of additional value on the cell site lease and cell lease buyout value.
Cell Site Capital works directly with municipalities for this reason. We work as a active management wireless lease firm to make sure our clients receive the full value of the life of a cell site. Call or e-mail us for a free consultation and maximize your wireless lease assets.