Should I take a cell tower prepayment instead of waiting for monthly rent?

A tower lease prepayment can seem appealing because it provides immediate cash rather than waiting for monthly rent. But deciding whether a prepayment is smart requires understanding the trade-off: upfront money versus long-term income stability.

Buyout firms use financial models to calculate how much they should pay you today in exchange for giving up decades of rent. Their goal is to maximize their return, not yours. Understanding that helps you evaluate whether the prepayment is in your best interest.

One of the main considerations is your remaining lease term. If your lease has many years left, and especially if it has strong escalators, your long-term rent could exceed the buyout by a significant margin. On the other hand, if your lease is nearing renewal or carries high termination risk, a prepayment might make more sense.

Another consideration is your financial goals. Are you trying to reduce debt? Fund a church project? Support a family transition? If the immediate cash helps you reach a major milestone, a prepayment may be practical, even if it isn’t the mathematically superior option.

But here's the risk: once you accept a prepayment, you lose control of future income and property rights.
Some contracts attach permanent easements or restrict how you use the land. These terms can affect property value, zoning flexibility, and future development.

Carriers also sometimes change equipment, add tenants, or increase usage. If your contract doesn’t require compensation for those additions, you lose revenue you might have otherwise gained.

Another major factor is that prepayment offers differ widely between buyers. There is no standard formula. Some buyers use aggressive discount rates; others use moderate ones. Some expect strong subtenant growth; others don’t. That’s why it’s common to see two offers for the same lease that differ by tens of thousands of dollars.

Before you accept any prepayment, it’s important to benchmark your offer, compare multiple bids, and understand exactly what rights you're giving up. Making a decision without that information almost always leads to missed value.

If you’re considering a prepayment, talk to an expert first. With the right guidance, you can understand your real options and choose a path that supports your mission and long-term plans.