Cell sites, including towers, water tanks, and rooftops have been selling at record highs for the past year or so. But are cell site lease values going to stay high or have prices topped out, and will they start to soften in the future? Will you be able to get the highest value for your site leases when you need those funds?
These are volatile times. The Covid-19 pandemic, political unrest, and higher unemployment have all played havoc with our day-to-day lives, finances, and our plans for the future. Cell site lease owners have not been immune to the effects that our “new world” have wrought.
FACTORS THAT CAN AFFECT CELL SITE LEASE VALUES IN THE COMING MONTHS
- Pricing Pressure From Telecoms – The cost of implementing new technologies, dealing with the effects of the pandemic’s effect on their operations, and their customers’ ability to pay their cell phone bills are forcing telecoms to look for ways to reduce their site rent expenses.
- Changing Tax Laws – The expected increase in personal income taxes, changes in capital gains rates, and pressure for changes on 1031 exchanges may significantly affect a site owner’s ability to maximize their value received from their site leases in the future.
- Rising Interest Rates – Currently, interest rates are being held at historic lows by the Fed Board. When these restraints are lifted, this could adversely affect the prices paid for cellular leases.
- T-Mobile/Sprint Merger – The tremendous cost of the merger, site duplications and the concessions required by the Justice Department to approve the merger will cause thousands of sites to be decommissioned. This may also increase pressures to renegotiate existing leases.
- Effects Of 5G Rollout – 5G technology will require the implementation of tens of thousands of small cell sites that won’t utilize the large towers and rooftop platforms of earlier technologies. It will require some new tower and rooftop sites and will make some existing installations obsolete.
It’s easy to see how these factors can affect overall cell site lease values. But how will they affect your individual cell site leases? How at risk are your leases to decommissions or rent reductions? Will you be able to maximize the cash value of your site when you are ready?
The cellular ground lease experts at Crescendo Capital Partners can help you sort through all of the confusion. We can provide you with free accurate, current valuations of your site leases and offer insight into where their future values may be heading.
If you are interested in learning more about how to maximize your cellular leases’ cash value, consult with one of the cellular and financial experts at Crescendo. One of our ground lease experts can address your specific concerns and situation and provide you with a free valuation of your site leases. Click here or call us at 203.972.3200 or email us at firstname.lastname@example.org.