Pros and Cons of Cell Lease Monetization

Converting ongoing cellular antenna lease payments into an upfront lump sum payment - known as monetization – has several pros and cons for property owners. Consider these:

Pros

Immediate Access to Significant Cash: Receive a substantial lump sum payment that provides immediate cash for property investments, debt reduction, or other uses.

Reduce the Risk of Future Cell Carrier Actions: By receiving a lump sum value now, you mitigate the potential risks associated with carriers decommissioning your site (Sprint is decommissioning over 12,000 sites) or reducing your rents as they approach top of market.  

Preserve Future Cash Flow: With the proper deal structure you can retain substantial cash flow even after selling your lease.

Easier Succession Planning: For estate planning purposes, a lump sum payment may simplify the transfer of assets to heirs.

Cons

Loss of Passive Income Stream: Lease payments provide a steady stream of passive income. A lump sum payment provides more cash now but eliminates the recurring revenue.

Potential Loss of Future Rent Increases: If your current cell rent is below market, converting to a lump sum could sacrifice future rent increases and higher payments over the long term.

Potential Tax Implications: Depending upon the tax laws in your jurisdiction and the structure of the lease sale, receiving a large lump sum may generate tax liability.

Important Considerations

There are important questions and considerations in a lease monetization decision, including:

·      What are your real estate and financial goals?

·      What are your plans for the proceeds?

·      What is the current market value of your lease?

·      What is the impact of cell carrier trends in your geography?

Cellular Realty Advisers tailors its guidance to each property owner’s goals and circumstances.  If you elect to monetize, we will secure top of market offers, retain your rights to future cash flow after the sale, and suggest deal structures for the most favorable tax treatment. If you elect to retain your lease payments, we will help you increase your cash flow and property value.

For a free consultation, contact: consult@cellrealtyadvisors.com