Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Commercial Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 11 years ago,

User Stats

538
Posts
298
Votes
Oren K.
  • Rental Property Investor
  • Toronto, Ontario
298
Votes |
538
Posts

Cell Income Stream Included

Oren K.
  • Rental Property Investor
  • Toronto, Ontario
Posted

Need some help determining the value of a two of cell leases on a building I am looking at.

One lease is with Sprint and the other is with MetroPCS. Both leases have termination clauses; The Sprint lease is a one year notice and Metro PCS one 30 days notice. Both have multiple 5 year options with 10% bumps per option. One has 3 years on the current term and the other has 2 years on the current term.

The property is definitely the tallest structure for miles around and it is unlikely that given current construction costs and rents, that another tall building would be built.

I read @Joel Owens comments from last year which if I understood correctly says that the most the income stream is bought out for is 15 - 20 cents on the dollar for a guaranteed 10 year stream. That translates into a 1.5 - 2 times current income (I am not taking the bumps or inflation into account since they more or less cancel each other). In this case, there is no longer term guarantee but the likelihood of termination is, I think, not high for quite a few years to come.

Anyone have any advice, thoughts or experience valuing cell leases.