There’s nothing we love more than a client success story – that’s why we work so tirelessly to help create them for cell site leaseholders and investors. Our industry expertise, experience and connections provide a unique advantage for our clients. These qualities, combined with clear, timely communication and a heart for service, bring about optimal results – as our clients attest.
Here, David P., a savvy business owner and real estate investor from Chicago, Illinois, talks about his recent cell tower lease buyout experience.
What was your reason for selling your cell tower lease?
I found a desirable property and wanted to take advantage of a tax-deferred 1031 exchange. Also, the carrier tenant announced an initiative to decommission what are considered “high-rent sites,” so there was a heightened risk of my lease being terminated.
I decided to jump on the opportunity to avoid any potential losses and collect on the guaranteed benefits. Selling the tower lease eliminated any looming risk, and while I could’ve used the proceeds for anything, the 1031 exchange was the icing on the cake. It was really about paving the way for my family’s future – I knew another piece of real estate would be a smart investment.
Why did you decide to partner with The Filo Group for help with the lease buyout process?
I’d been talking to several cell tower lease acquisition companies about buying my lease, and I kept hitting roadblocks. The bids I got were all over the map and included onerous lease terms. I realized I was in over my head. I could’ve made a deal, but my gut told me I could do better. That’s when I decided to get help from Paul Hwang at The Filo Group.
He has a great reputation, and I figured there was no harm in at least getting his opinion. To my surprise, Paul was willing to take on my case without any guarantee of payment. He simply said, “If you take one of the original offers, I don’t get paid. I’m that confident I can do better for you.” As it turns out, Paul ended up being an indispensable resource, and I was more than happy to pay him – his service was worth every dime!
What made Paul an indispensable resource, as you refer to him?
Paul is completely knowledgeable about every item we dealt with. There wasn’t a single thing he didn’t know. Obviously, his knowledge gave me an enormous advantage that I didn’t have when I was trying to negotiate with these cell tower lease buyout companies on my own.
Over and above his incredible expertise, Paul is on top of every detail at all times. This characteristic is what sets him apart. There wasn’t a single moment when I felt that something was left undone. He anticipated every need and took care of things for me in a way that alleviated my stress and uncertainty about the process.
How did working with Paul improve the overall outcome of your transaction?
As I said, I’d had several offers from lease acquisition companies – three, to be exact, and Paul jumped in and was eager to beat them all.
He engineered a competitive bidding environment, which took me from 3 bidders to 12. He got all of the bids together extremely quickly, evaluated them, prioritized them, and presented the pros and cons of each so I could make an informed decision. He took the time to make sure I fully understood my options and included my longtime family counsel, so we were all in the loop.
He’s the reason why the closing process was expedited and executed in a way that ensured we met the very tight 1031 closing timeline.
Ultimately, I ended up selling for 460% more than the lowest original bid and 183% more than the highest bid I’d initially received. Not to mention the terms were much more favorable than I otherwise would’ve gotten. The gap in valuation offered by the bidders before Paul’s involvement was not only confusing, but very material in proceeds to our family.
What advice do you have for other cell site leaseholders who are thinking about selling their lease?
Without question, don’t sell your lease on your own before you allow a professional to get additional bids. I thought I was playing hardball with the buyout companies I was talking to. Still, Paul was able to get much higher bids and faster. He knew who to talk to and how to talk to them. That added level of knowledge and industry-specific experience is critical. And, if you can save yourself from stress and hassle while making more money, why not?
To receive your free consultation, contact Paul Hwang at The Filo Group today.