SiteBid Infrastructure is proud to offer ValueTrack, the first automated lease valuation system for infrastructure leases in the marketplace. We have data on over 23,000 infrastructure leases and offer a free rental rate analysis as well as a sale value analysis.
In order to complete your valuation report, you can find it under Intelligence and select Rent Analysis or Sale Value Estimate.
Here is an example of an output from an AT&T lease, cell tower, ground lease of about 2,500 square feet. This lease commenced in 2018, expires in 2043 and the current rent is $1,000 a month with a $2,000 percent escalator. All of these factors along with over 30 other data points go into the analysis of each lease.
For this particular lease, the annual rent multiplier is observed to be approximately 17 times the monthly rent. This indicates a peak in the current market trend, adjusted downwards mainly due to a 2% rent increase clause, the relatively low rent, its extended expiry period, and the property’s size of 2500 square feet which offers expansion opportunities for the tenant but limits the investment’s growth potential.
The monthly rent multiplier stands at about 204, leading to an estimated purchase price of around $204,000. Valuation ranges between $192,000 and $210,000, rooted in the basis of a perpetual easement, typically spanning from 40 to 99 years.
Exploring payment arrangements, a structured payment option could elevate the total payout to approximately $255,000 over a decade, or $220,000 for a five-year term.
Delving into the financial analysis section reveals a comparison between continuing lease payments versus a $204,000 buyout. The net present value of continuing payments is calculated to be about $114,000, factoring in the time value of money. These insights are elaborated in an analysis report, with further details available under the cash flow section.
This section predicts potential rent reductions by carriers, estimated every seven years, and its impact on the lease, which is less significant due to its low rent. It also presents monthly and yearly rent calculations.
Projected earnings show the expected income if the lease continues without rent reductions compared to a scenario where the $204,000 buyout is reinvested. The latter scenario could yield an estimated $515,000, as outlined in rent projection calculations. This compares the outcomes of maintaining the lease versus opting for the sale. Further, reinvestment outcomes are illustrated, showing a potential accumulation of up to $556,000 over the term, versus $515,000 from selling.
This report is provided courtesy of sitebid.com, aiming to assist with your property decisions. We appreciate your interest and look forward to offering our services.
