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Cell tower on property

mp2277

mp2277

Member
Joined
Mar 21, 2008
Professional Status
Certified Residential Appraiser
State
Virginia
I have been offered an assignment, old farm house, 20 acres, existing ADU in the form of a singlewide. The issue is a cell tower on the property. An old MLS listing says the cell tower income pays part of the taxes. That can't be much because the taxes are relatively low. This is a vacant REO. No one has any financial details and no way to obtain them. Any thoughts or suggestions as to how to proceed with this? Thanks
 
mp2277 said:
I have been offered an assignment, old farm house, 20 acres, existing ADU in the form of a singlewide. The issue is a cell tower on the property. An old MLS listing says the cell tower income pays part of the taxes. That can't be much because the taxes are relatively low. This is a vacant REO. No one has any financial details and no way to obtain them. Any thoughts or suggestions as to how to proceed with this? Thanks
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IDK- but seems with 20 acres a lot of the value would be in the land- I would mention cell tower and possible that it pays part of taxes but not possible to verify or extract an adjustment for it. I might be more concerned with how far cell tower is from the house, does that affect safety or appeal.
 
Read the lease. Do an income approach or DCFA for determining contributory value.
 
You may can overlay 'antennasearch.com' over your MLS mapping to identify any sales that might have similar influence.
 
mp2277 said:
I have been offered an assignment, old farm house, 20 acres, existing ADU in the form of a singlewide. The issue is a cell tower on the property. An old MLS listing says the cell tower income pays part of the taxes. That can't be much because the taxes are relatively low. This is a vacant REO. No one has any financial details and no way to obtain them. Any thoughts or suggestions as to how to proceed with this? Thanks
Click to expand...
Well if it went REO, and the cell tower really did pay part of the taxes it did not help, apparently.

How much are the taxes?
 
The cell tower lease might be owned by a 3rd party and thus not be among the property rights being appraised.

True story to illustrate my point. I had an assignment to appraise a (dare I say it) house of worship in So Central LA. 2-story "lodge" type structure, but located on a parcel zoned for multi-family. It's real common in that market for such properties to be sold for redevelopment into moderate or high density multi-family due to the land values for properties with such potential. I wasn't sure how the HBU would work out so I figured I'd just approach the value from both directions, current use or as land value and let those comparos work themselves out.

So I set up and performed an interior/exterior inspection, which the way I do it includes an interior floorplan for both floors. I get to the far end of the 2nd floor when I come across a more modern security door with placards that go with a cell tower. Equipment and antenna on the roof.
Come to find out, the owners of the property had sold the lease off to a 3rd party investor and no longer owned the lease income from the cell tower. BUT that lease remained a legal encumbrance on the parcel. That means it couldn't be redeveloped, regardless of the value of the underlying land. Had I been doing what most CG appraisers do in their inspections (take a pic from the entry to the recreation hall) I would have never seen that door up close or have known to ask the questions that followed. I might have missed with my HBU conclusion and valued the property for its land value.

BTW, in our region the contributory value of a cell lease to an improved property is a lot less than if that cell lease is sold off to a 3rd party. IIRC the lease in the above example sold for $800k whereas it might have only added $200k if bundled with the RE.

You can't really do much with this assignment without finding out about the lease terms. Somebody has that information.
 
BRCJR said:
Read the lease. Do an income approach or DCFA for determining contributory value.
Click to expand...
There is no lease available to read, this is an REO and the lender or asset manager know nothing of the specifics
 
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