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Lease Prepayment
Md7 works with cell site landlords to provide quick access to the money locked up in their cell site leases. Through lease prepayments, landlords receive an up-front cash payment for future rents while maintaining ownership and control of the leased property. In other words, it’s an assignment of your rent stream for a specified period of time.
Unlike many other lease financing companies, Md7 does not demand long-term control or ownership of your wireless site and associated easements. During the assignment, you retain ownership and control of your real property. Md7 will not disturb your property in any way. At the end of the prepayment term, Md7’s rights expire and the landlord and operator resume their leasing relationship.
When landlords participate in this program, Md7 assumes the financial risks that may befall a cell site. The full cash payment landlords receive from Md7 is guaranteed, regardless of whether or when the operator chooses to pursue a rent reduction or exercise its right to site termination or decommission. Md7 is backed by a major national lender and a private equity firm, so we have the financial strength to securely fund your lease prepayment.
Lease prepayments are a quick cash infusion - usually available within 30 to 60 days after obtaining signed paperwork. You can be assured that Md7, with years of experience in cell site lease financing, will make the cash payment program a simple and rapid means to benefit from your cell site lease.
Cell site and cell tower landlords are often unaware of the early termination clauses that exist in most contracts with wireless operators. Landlords have often structured a financial plan with the assumption that the monthly income from a cell site lease will continue for all 10, 15, or 20 years of the contract. That’s a risky assumption. With major changes in wireless technology, operators are continually reevaluating their networks. A lease prepayment removes the risk and can benefit all types of landlords.
Cell lease assignments are especially advantageous to religious and other non-profit institutions. Because of their tax-exempt status, the cash prepayment is tax free. For business owners, contracts are fundamental assets, but owners looking for financing may find banks unwilling to lend funds against a cell site lease with an early termination clause. Ninety percent of cell site leases are not guaranteed, but lease prepayments provide an alternate financial resource that enables you to reinvest in your business or expand your enterprise. Individuals can also benefit from the quick cash and a simple funding process. Up-front cash lease prepayments can pay for a child’s college education, finance your retirement or make a dream vacation a reality.
Government entities, such as municipalities, utilities, school districts and transit authorities, have a fiduciary responsibility to manage at-risk income streams differently from guaranteed monies. Cell tower site leases cannot be viewed as risk-free due to the early termination clauses found in most contracts. Termination clauses can also inhibit a public-sector landlord’s ability to leverage these leases with financial institutions. A lease prepayment removes the risk and offers landlords the opportunity to diversify its investment portfolio, service debt, make capital improvements or fund priority budget items.
Unlike many other lease financing companies, Md7 does not demand long-term control or ownership of your wireless site and associated easements. During the assignment, you retain ownership and control of your real property. Md7 will not disturb your property in any way. At the end of the prepayment term, Md7’s rights expire and the landlord and operator resume their leasing relationship.
When landlords participate in this program, Md7 assumes the financial risks that may befall a cell site. The full cash payment landlords receive from Md7 is guaranteed, regardless of whether or when the operator chooses to pursue a rent reduction or exercise its right to site termination or decommission. Md7 is backed by a major national lender and a private equity firm, so we have the financial strength to securely fund your lease prepayment.
Lease prepayments are a quick cash infusion - usually available within 30 to 60 days after obtaining signed paperwork. You can be assured that Md7, with years of experience in cell site lease financing, will make the cash payment program a simple and rapid means to benefit from your cell site lease.
Cell site and cell tower landlords are often unaware of the early termination clauses that exist in most contracts with wireless operators. Landlords have often structured a financial plan with the assumption that the monthly income from a cell site lease will continue for all 10, 15, or 20 years of the contract. That’s a risky assumption. With major changes in wireless technology, operators are continually reevaluating their networks. A lease prepayment removes the risk and can benefit all types of landlords.
Cell lease assignments are especially advantageous to religious and other non-profit institutions. Because of their tax-exempt status, the cash prepayment is tax free. For business owners, contracts are fundamental assets, but owners looking for financing may find banks unwilling to lend funds against a cell site lease with an early termination clause. Ninety percent of cell site leases are not guaranteed, but lease prepayments provide an alternate financial resource that enables you to reinvest in your business or expand your enterprise. Individuals can also benefit from the quick cash and a simple funding process. Up-front cash lease prepayments can pay for a child’s college education, finance your retirement or make a dream vacation a reality.
Government entities, such as municipalities, utilities, school districts and transit authorities, have a fiduciary responsibility to manage at-risk income streams differently from guaranteed monies. Cell tower site leases cannot be viewed as risk-free due to the early termination clauses found in most contracts. Termination clauses can also inhibit a public-sector landlord’s ability to leverage these leases with financial institutions. A lease prepayment removes the risk and offers landlords the opportunity to diversify its investment portfolio, service debt, make capital improvements or fund priority budget items.
Frequently Asked Questions
What does it take to qualify for the program?
A valid lease in good standing with a major wireless carrier or tower company.
I have the tallest building in town. Wouldn’t the carrier want to keep my site?
Not necessarily. Your site may still be at risk for lease termination. With the introduction of wireless broadband and such technologies as wireless streaming video, the need for more sites at lower heights has become more common, making the height of a cell site less important.
Will assignment of my cell site lease to Md7 jeopardize my future relations with wireless carriers?
No. Md7 enjoys an excellent relationship with the wireless carriers and has years of experience working with them on cell site leases. To the extent possible, Md7 strives to maintain the pre-existing day-to-day relationship between the carrier and the landlord during the prepayment period.
Why should I choose Md7 for my cell site lease prepayment?
Md7 is a highly reputable leader in cell site lease funding with established relations with major carriers. We are backed by a major investment company with over $5 billion in assets. Our experience in the wireless industry and reputation for fairness and integrity ensure a positive and beneficial financial experience for landlords.
What are the steps in the process?
- 1. Call an Md7 lease consultant at 888-553-6611 for a complete needs analysis;
- 2. Complete the Application for Funding;
- 3. You will receive a proposal within two business days that details the terms of the deal;
- 4. Complete final documentation;
- 5. You will receive full payment within 30 to 60 days after receipt of final documentation.
What happens if the wireless carrier or tower company terminates the lease while it is assigned to Md7?
More than 90% of all cell site lease contracts written by the wireless carriers and cell tower companies have provisions that allow the companies to unilaterally terminate the lease with 30 to 90 days notice to the landlord. In such event, you will retain the full amount of the lump sum payment. In other words, the risk of lease termination during the assignment period is wholly transferred to Md7.
What happens if I sell my land or building?
No problem. The cell site lease assignment to Md7 will remain in effect for the balance of the negotiated term. At the end of the assignment period, the new owner will have the right to receive rent payments under the lease.
Will Md7 disturb my property in any way during the assignment period?
No. You will retain full ownership and control of your real property during the assignment period.
What is a lease assignment?
A lease assignment is the temporary granting of the right to receive lease income to another party, in this case to Md7, in return for Md7 giving you an up-front cash prepayment of your lease. The period of the lease assignment is typically 15 to 20 years.
At the end of the temporary assignment period, the cell site lease reverts back to you, and you re-establish your direct relationship with the carrier. This return of the lease to the landlord is a benefit that Md7 offers; many other lease financing companies demand long-term control or even ownership of your wireless site rights and associated easements
At the end of the temporary assignment period, the cell site lease reverts back to you, and you re-establish your direct relationship with the carrier. This return of the lease to the landlord is a benefit that Md7 offers; many other lease financing companies demand long-term control or even ownership of your wireless site rights and associated easements
What is my cell site lease worth?
Call Md7 – one of our lease consultants will be able to give you a value range. The final price will be based upon a number of factors, including the carrier or tower company on your site, the terms of your site lease and a risk assessment.
How much tax do I pay on the lump sum payment?
The lump sum payment is subject to ordinary income tax – just like the monthly rent you have been receiving to date. Prevailing case law suggests that you may be able to spread your tax payments throughout the lease assignment period. We recommend that you consult your tax advisor.
How long does it take to receive a lump sum payment?
We usually mail the check to you within 30 to 60 days after receipt of all properly executed documents.
What is a lease prepayment?
If you have a cell site lease with a wireless carrier or tower company, Md7 will give you up-front cash in return for a temporary assignment of the monthly lease payments to Md7. No more unpredictable rent in the future – just a big lump sum payment today.
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