Foreclosure Hunting for Cell Tower Leases
Real estate investors buying foreclosures are finding more and more apartment buildings with existing cell tower leases. Cell tower leases can be a foreclosure buyer’s best friend. However, buying foreclosed properties with a cell site lease is not easy, but offers are available. Even the savvy real estate investor who buys a lot of foreclosures probably isn’t an expert in telecommunications leasing, and frankly, even real estate investment experts don’t know how to deal with leasing a cell phone tower when buying property. mortgaged. building.
A cellular antenna lease will be attached to a cell phone tower on greenfield land or a cellular antenna will be installed on the rooftop of a commercial or residential property. If the property is in foreclosure and the bank is not yet the trustee, it will be difficult to get the information unless the Owner/Landlord is cooperative and trusts you enough to let you see the lease. There really isn’t a way to identify these types of foreclosure properties. These types of offers are very difficult to find and we recommend that you do not waste your time chasing these rainbows. Focus on the low-hanging fruit: residential apartment buildings and bank-owned commercial properties.
It is much easier to search for REOs with existing cellular tenants. If the property is bank-owned, as trustee you need to disclose all existing leases encumbering the premises prior to sale, and it is in your best interest to provide lease details or if you are lucky…multi-operator leases.
You need to find out the value of the lease. You want to know the start date of the lease, which is the date they started paying the Owner after cell site approval. You want to know how much rent they pay each month, and what annual increases the previous landlord agreed to, and how many years are left at the end of the lease. The particular cellular operator will also determine the value of the cell tower lease on Wall Street.
How can real estate investors find foreclosed properties that have cell phone carriers as tenants?
This is where you need to be creative. Good foreclosure investors have their guide dogs that send them offers. Chances are they never thought to pursue foreclosures with cell tower site leases. Your best option is to contact your bank’s foreclosure specialist or REO administrator.
All the major banks have buildings on their books with cell site leases that they are not marketing to investors. They are simply too busy to assemble a database of foreclosed properties with tenants from existing wireless carriers.
Successful real estate investors wishing to find these deals should leverage their existing relationships with banks doing business in the territory in which they operate to identify potential deals that have existing cellular leases and where the bank acts as receiver. Ask your banker to scan your foreclosed property/REO database for terms like Verizon Wireless, T-Mobile, Omnipoint, Cellco, Sprint, Nextel, Alltel, Cingular, AT&T, Metro PCS, Crown, Towerco, SBA or American Tower. If you find a foreclosed property or a building with a cell tower lease attached, it can significantly improve the deal for you because you can take cash out of the cell lease, often in six-figure amounts, and put it toward a mortgage or to buy another. building.
It is also a very good idea to have a cell tower leasing expert review the terms of your lease, which disqualifies 99% of real estate attorneys.