When purchasing a piece of property — whether it be vacant land, a house, a shopping center, commercial/industrial building, or virtually anything other kind of real property — using bank or private financing, it is usually advisable to instruct the lender to underwrite the loan on the property both excluding (“subject to”) the cell tower lease and “including” the cell tower lease, as it is difficult to determine (in advance) how much value the lender will allocate to the cell tower lease (if any).
It is important to remember that, due to what is commonly referred to as the “Early Termination Provision” – a clause which permits the lease tenant to cancel the lease with very little notice and with very little (if any) penalty – contained in virtually all cell tower leases, many lenders are uncomfortable lending money using a cell tower lease as collateral. As such, financing a property that includes a cell tower lease is generally more complex than financing a similar property without a cell tower lease, and requires planning in advance of any loan applications if one hopes to appropriately leverage the cell tower lease component of the purchase.
In addition, in most instances, appraisers do not accurately appraise the value of the cell tower lease because of their lack of experience interpreting a cell tower lease (as they typically do not understand the some of the fundamental value variables that exist between cell tower leases and commercial or residential real estate), so it is usually to the buyer’s benefit to have the ability to leverage the lease at closing to offset the increased acquisition cost associated of a reduction in the loan amount.
In my experience, and as it is not only possible, but generally advisable, I recommend looking at a property purchase that includes a cell tower lease as two separate transactions, with the property being one transaction and the cell tower lease another entirely. By doing so, things such as “Value Penalty” (see blog post by the same name for more information) are more easily exposed and buyers will often have increased flexibility than would be the case if one lender used the underlying real estate and cell tower lease as collateral for the purchase loan. With that in mind, I recommend having the lease analyzed by a true lease professional and perhaps even placing the lease on the market for sale or auction to close concurrently with the purchase closing.