When a cell tower lease buyout occurs, the cell tower equipment typically remains in place and continues to be operated by the wireless carrier or tower company, even though the rights to the lease revenue have been sold to a third-party lease buyout company. Here’s what typically happens to the cell tower equipment in a lease buyout scenario:
- Equipment Ownership: The ownership of the cell tower equipment, including antennas, transmitters, cables, and related infrastructure, remains with the wireless carrier or tower company. The equipment is not transferred as part of the lease buyout transaction.
- Operational Continuity: The wireless carrier or tower company continues to operate and maintain the cell tower equipment without interruption. They are responsible for network operations, maintenance, and upgrades, as specified in their original lease agreement.
- Access Rights: The lease buyout agreement does not affect the wireless carrier’s access rights to the tower site. The carrier maintains its rights to access the property for equipment installation, maintenance, and servicing.
- Lease Payments: While the lease revenue rights have been sold to the lease buyout company, the wireless carrier or tower company continues to make rent payments, as stipulated in the original lease agreement. However, these payments are directed to the lease buyout company for the duration of the buyout agreement.
- Expiration of Buyout Agreement: The lease buyout agreement has a defined duration, often matching the remaining term of the original lease or a negotiated period. At the end of this term, the agreement expires.
- Reversion of Lease Revenue: Once the lease buyout agreement expires, the rights to the lease revenue revert to the property owner. The wireless carrier may resume paying rent directly to the property owner, as it did before the buyout.
It’s important to note that the primary change resulting from a cell tower lease buyout is the recipient of the lease revenue. During the buyout period, the property owner receives a lump-sum payment from the lease buyout company, while the wireless carrier continues to operate the equipment and make rent payments to the buyout company.
Property owners considering a lease buyout should carefully review the terms of the buyout agreement, including the duration of the buyout, the lump-sum payment, and any other provisions that may affect their interests. Additionally, property owners should consult with financial and legal professionals to ensure that the terms align with their financial goals and objectives.
