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Sponsored by Lorman Education
Product ID: 407871EAU
 
Credit & Course Provided by:

Selling Cell Leases to Address COVID-19 Financial Challenges

OnDemand Webinar (100 minutes)

Learn how selling a cell lease can help you address financial challenges without affecting current operations.Many businesses, individuals, schools and municipalities face financial problems due to the COVID-19 outbreak. This topic will address how selling a cell lease can provide a bridge of hundreds of thousands to millions of dollars, without affecting current operations, to weather the storm until things return to normal. This is what happened following the 2008 financial crisis: landlords sold off cell leases to generate immediate funds. Some sales were by cities or schools that were under emergency management to generate funds but kept operating. This time as well sell a cell lease can provide cash - bids often lead to sales for around 210 times monthly rents. But sale documents have to be done carefully to not harm the lease owner's continued use and development of the building or property on which the cell tower is located. This information will provide examples of successful lease sales by businesses, cities and schools, describe the bid process, and identify major issues that need to be addressed in sale documents. This includes issues unique to cities, schools and units of government.

Authors

John W. Pestle, Esq., Varnum LLP Jonathan L. Kramer, Esq., Telecom Law Firm, P.C.

Agenda

Reasons to Sell/Examples of Successful Sales

• Obtain Funds for Current Operations

• Aid Turnaround, Workout, Bankruptcy Proceedings

• Pay off Debt

• Fund Pension Obligations

• Increase Proceeds From Sale of Land or Building With Cell Lease

• Fund Municipal Improvements Without Raising Rates, Issuing Bonds

Overview of Cell Lease Sales

• Who Are Purchasers

• What Is Being Sold

- Current Lease

- Future Communications Antenna Leasing Rights, Usually for Decades

• Sales Prices After Bids Often 210 Times Monthly Rents

- Potentially Higher for Schools, Municipalities, etc.

• Unaffected by 5G

Sales Process

• Obtaining Bids Gets Best Price and Terms

- Assures Lenders, Creditors, Public Bodies That Best Price Was Obtained

• Main Provisions of Request for Bids

- Summary With All Information Bidders Need

- Lease, Amendments, Recent Rent Checks

- Key Terms for Final Documents to Protect Future Use, Development of Property

• Provisions Unique to Municipal, School, Government Sales

• Provisions Unique to Sales of Antennas on Rooftops, Water Towers

Major Steps Leading to Closing

• Easement Agreement

• Purchaser Due Diligence, Especially

- Title Insurance

- Survey

- Phase I Environmental Study

• Consent of Lender (If Mortgage on Property)

Time Needed for Sale

• Usually 3-4 Months at Short End

• Often Longer for Antennas on Rooftop, Water Tower, Due to Increased Complexity

• Usually Longer for Municipal, School, Government Sales Due to Procedural Requirements