Are you one of the many land owners that leased part of their properties to telecommunication companies, for erecting and maintaining cell towers? Leasing land for such a purpose might prove a good deal, bringing you significant revenues, but the time may come for you to sell the lease rights with or without the actual land beneath the cell tower. There are many enterprises that specialize in this field: buying ground lease rights for cell sites.
Now, is that a good option? Well, it depends on your specific needs. You must know that, on the long term, selling your lease rights is not economically-efficient. The money you get, no matter how you decide to invest it, will probably not bring you the revenues you get from your rent. The only big pro is that you get more money at a time.
There is also the situation when selling lease rights makes sense: when you decide to sell the property. If that is your case, you have to decide between adding the price for lease rights to the overall property price and selling them separately.
Legal Considerations
Technically, you have the right to separate lease rights for a specific part of your land, from general property rights. In most states, the law allows this. You basically divide your property rights and you sell them separately.
The problem is with the clauses of your leasing contract. Just study it (or ask an expert) and check out the following issues:
- Does the contract allow selling lease rights or will it terminate when you sell them?
- When the lease expires, what happens? Your potential buyers will be very interested in this aspect, so make sure it is crystal clear.
- What does the contract say about terminating the lease (from the same considerations)?
- What are the eventual responsibilities that you may have after selling the lease rights?
- Who is responsible for maintaining the lease area? Many potential buyers think twice before buying lease rights if they need to do all the maintenance work for access areas?
Economical Considerations
Basically, separating lease rights from other property rights is a good idea. By doing this, you get more money than if you include them in the overall price. This is because leasing property to cell companies is so lucrative. There are many such successful transactions, where vendors manage to get incredible amounts of money for lease rights (sometimes even more than they got on the property itself).
However, there might be some problems too. Sometimes, potential buyers (and even the vendors) have a limited understanding of the profitability of such lease contracts. In this case, do not worry, there are specialized companies that buy such rights and pay big money for them.
But, there might be problems with potential land buyers. This mainly depends on the clauses of the lease contract.
Some of them might discourage buyers. For instance, if they need to deal with maintenance works, such as vegetation control and keeping access areas clear, they might be more reluctant to buying the property without the actual lease rights, or they may be willing to pay less money.
A common solution that many lenders use is subdividing the property. That is, they keep the area leased to the cell provider and sell the rest. Doing this might spare you of some legal complications (mostly, if the lease contract offers limited possibilities for selling the land below the cell tower while keeping the lease rights). In case the land owner needs to do the maintenance job, potential land buyers will be less reluctant, since this is not their problem anymore.
But, if the leased land is located in a vital access area of the property, potential clients will not appreciate it.