What would you like to know?
What exactly is TIP buying?
We are buying the right to receive mobile site rent over a defined area for a specific period of time (typically 30 years or more), along with certain limited rights to ensure we can collect.
How much will TIP pay for my mobile site lease?
The amount of the lease premium depends on (1) the rent currently paid under the lease, (2) future rent escalations, (3) the tenant (either an operator or tower company), (4) the terms of the lease (5) the type of site (tower or rooftop) and its location, (6) any co-locators on the site (site sharing), (7) the duration of our investment and a number of other factors that impact our risk assessment.
Wouldn’t I be better off keeping my lease?
Mobile site leases differ from other commercial leases in that they can be terminated by the tenant with little notice (typically 30-90 days). Imagine if tenants in commercial buildings could leave in 30-90 days! Financing for commercial real estate would disappear! This, of course, is exactly the case with mobile site real estate: you cannot go to your local bank to borrow against your mobile site lease. More than 25,000 mobile site owners world-wide have accepted a lease buyout (lease premium) because they prefer a large, secure, up-front amount over uncertain site rent that can go away and that, in any case, typically escalates at inflation rates (CPI) only. The point of a good investment is to earn a return that at least exceeds inflation! TIP can help you do this.
What happens if the tenant (telecom operator or tower company) terminates the lease after TIP makes its investment?
Nothing. Our investments are “non-recourse” in nature. This means that if the tenant stops paying rent after invested in the lease we cannot come back to you to ask our money back. That’s the whole point of our business: site owners win because they turn uncertain future rent into a large, up-front lump sum while transferring all the risk associated with the site to TIP. And TIP wins because, even though it will have to accept a certain number of terminations, its global portfolio of site lease investments will protect its downside.
If my mobile site lease can be terminated by the tenant, why do you want to buy it?
A mobile site lease is worth much more to TIP than it is to a site owner. The reason for this is the fact that the site owner faces what’s called “binary risk”: either the mobile site exists (“1”) or it doesn’t (“0”) (this is also why site owners cannot go to their local bank and borrow against their lease). TIP, in contrast, faces portfolio risk: TIP accepts site lease terminations because for every termination it owns many more site leases world-wide (that is, unlike the site owner, TIP is “hedged” by a global portfolio). For this reason, in a purely rational world, every mobile site owner should sell their lease and replace the associated uncertain future rent flows with certainty up-front and a much higher rate of return than is offered by the site lease (typically inflation only).
Can tenants (telecom operators and tower companies) terminate my mobile site lease at will?
The vast majority of mobile site leases can be terminated for either economic or technological reasons (which can be anything) with little notice (typically 30-90 days). For this reason site owners cannot go to their local bank and borrow against their lease. TIP offers a solution because we own a large, high quality global portfolio of site leases. That is, our investments are “hedged” which reduces our cost of capital and allows us to make large payouts while still earning an acceptable return.
Is a transaction with TIP permitted under my site lease?
Although some site leases attempt to limit the site owner’s options, in most cases site owners are free to do with their land as they wish. That’s what it means to be property owner!
If I sell the rights to my mobile site lease, will I still own the underlying property?
Yes. TIP acquires only the rights associated with your mobile site lease (principally the right to receive rent). Unless you want us to buy your land (which we’re prepared to do), the land is yours and you are free to do with it as you wish. Moreover, after our investment period comes to an end, the site lease and the rent revert back to you. Unless of course you choose to accept another mobile site lease premium from TIP!
If I have multiple tenants, would you pay a lease premium for all of them?
You can sell as much or as little of your uncertain future rent flows as you wish (we know what we would do)! Assuming your mobile site leases meet our investment criteria, we will buy them.
How can I be sure that TIP can execute?
Our founder, Eric Overman, oversaw the acquisition of more than 75% of the lease premiums that have been paid outside the United States (approximately 6,000 leases in 20 countries). AMP Capital, TIP’s investor, has committed up to US$350M in equity (which vastly exceeds the equity available to Mr. Overman in his prior venture). This funding (along with low-cost debt in due course) will allow TIP to invest in well over 10,000 mobile site leases – including yours.
How long will it take to receive my mobile site lease premium?
The process is straightforward. Time to close depends largely on how quickly you can provide the required documentation. Once we agree to terms the due diligence and closing process can typically be completed in as little as 30 days.
What happens to my mobile site after TIP makes the investment?
Typically, very little changes. After we make our investment we notify the tenant (the wireless operator or tower company) of the change of landlord. From that day forward until the end of our investment period, TIP is the tenant’s point of contact relative to the site. We will coordinate with you if a site visit or major works are planned, or if an additional potential tenant shows interest in your property for a mobile site.
How do I get started?
Contact us. We would be glad to perform a free lease evaluation to determine if your site qualifies.