Lump Sum Payment Negotiation • Cell Tower Land Valuation
Generally CSN will advise against accepting lump sum payments for your cell site lease. But there are instances where it may be beneficial due to financial, family or other situations. In these cases knowing the value of your land is paramount. Often times you will get offers for the rest of the value of your tower land lease or building site lease or perhaps seven years value. Here are three angles those offering companies are playing.
1.) Scare Tactics: Companies may scare you into believing you should sell due to consolidation in the wireless industry. Ask yourself this question. If the industry is that volatile why would a business who wants to make money take that risk?
The truth of the matter is that the wireless industry is more stable in terms of towers and cell sites than they want you to believe. In addition, you do not often here talk of the newcomers into the industry that are doing quite well like Clearwire or MetroCall
2.) Tax Benefits and Better Return: It is true there are certain tax benefits to a 1031 exchange, but why would a company invest thousands of dollars in your lease if there are better investment alternatives? Companies use this often with Scare Tactics to obtain your cell site lease.
Try this calculation: take what you pay in taxes to maintain that piece of cell site property or building space per year and divide it into your yearly earnings from the cell site lease. When someone offers you a lump sum payment ask them if it will return that percentage per year for the next 5 to 20 years.
3.) Site Lease Expiration: Your cell lease may be set to expire soon. Scare tactics may be used with this to "protect" you. Again, why would a cellular company or cell phone tower company take that risk? The reality is that many times their offer will be based off of your current lease rate. These companies then turn around and renegotiate higher monthly rates. CSN wants YOU to benefit from our renegotiations.
Here is an example; Your cell site lease expires in two months. Your current lease value is $12000 per year ($1000/month). They propose an offer of $84,000 (Seven Years Value). But in two months they renegotiate your land lease to $18000 per year ($1500/month or $126,000 or seven years).
That's a difference of $42,000 over seven years!
Contact Cell Site Negotiation now.
