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Cell Tower Lease Buyout Calculator
Tower companies offer lump-sum buyouts of cell tower ground leases — value the trade.
Lease NPV
$460,667
Buyout premium vs NPV
-$10,667
Buyout multiple (× annual)
15
How the math works
Lease NPV = sum of annual rent escalated, discounted. Premium = buyout − NPV.
$2,500 × 12 × 25yr escalated 3% at 7% discount ≈ $380k NPV. $450k offer = $70k premium (15× mult).
How to Use
- Enter current monthly rent.
- Enter escalator % per year.
- Enter years remaining.
- Enter buyout offer.
- Enter discount rate.
- Read NPV of keeping lease vs buyout.
Frequently Asked Questions
Why lump sum buyout?
Tower companies (American Tower, Crown Castle, SBA, independent aggregators) offer lump sums to landowners for ground lease rights. Tower cos gain: certainty on asset, avoid rent escalators, consolidation financing value. Landowner gains: immediate cash, eliminates credit risk, free up property for sale. Typical offer: 10-18× annual rent as lump sum. Landowner counter: 20-35× for high-quality sites with long remaining term.
Typical buyout multiples?
Low-quality rural tower with short remaining term: 8-12× annual rent. Mid-quality suburban, 20+ year remaining term: 14-22× annual rent. High-quality urban, multi-carrier tower, tenant addition potential: 20-35× annual rent. Escalator adjusted: high-escalator lease (4%+) commands higher multiple. Digital revenue share agreements: lower buyout multiples because of upside potential.
NPV vs buyout analysis?
Calculate NPV of remaining lease payments (with escalator) at discount rate reflecting risk. Compare to buyout offer. Typical: if NPV at 6-8% discount rate > buyout offer, keep lease. If <, take buyout. Must consider: carrier credit risk (AT&T/Verizon/T-Mobile = strong; tower cos = strong), termination risk (rare but happens on tower decommissioning), optionality for tenant additions (revenue share gives upside).
Legal and practical considerations?
Buyout often takes form: perpetual easement or long-term lease assignment. Land is reduced in value by easement (20-40% discount on remaining land). Cannot build certain things nearby (tower radius restrictions). Consult real estate attorney — buyout contract drafted favorably to buyer. Tax treatment: ordinary income if sale structure; capital gains if easement assignment. State laws vary.
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