What is a cell tower worth? Is there a good market for them?

Question

I and 2 other partners own a cell tower. I think we might want to cash out on it. Anybody have any idea of who to reach out to in order to sell it? or what its even worth? I believe if we cash out on it, we would want to sell it and be rid of it, not just sell the lease on it and then still have fool with ownership while very little benefit being left.

Its just monopole but located in a heavily populated area grandfathered in. I don't think building another in this area is an option so I see some value here. The lease on it now expires in about 10 years. Currently earning about grand a month and will increase 30% before the lease is done. I see multiple carriers (like all of them in the area) using it too so its got to be worth something

Charley C. · Answer

Here we got most every carrier on that pole, I see like 12 or 13 receivers.  Bringing in may 5 to 6,000 a month each. And the pole is grand fathered in. looking at about 60-70,00 a month may be. but all I get is barley over $900 and only get 25% of that for my share. for 11 years is only $250 month

Deal is, I am 55, and will be 66 when that lease expires, lot of things can happen. That cell phone carrier market typically does not like to fool with unfamiliar tower operators that have no proven track record of operating a tower.  Carriers want companies they know and can depend on.  A real tower operator has engineers and lawyers on the payroll which makes them operate a whole lot more efficiently

If I sell that tower for 500,000.  I will get about $125,000 to buy more land to build more apartments. That will be netting me about 5 to 7,000 a month (because apartments are my realm, not cell towers).  or I can hold the tower for $250 a month. Do you see now where my better play is?

Charley C. · Answer

@William Thresh I can take the cash and use it to expand the land surrounding one of my apartment complexes. adding 80 units. Right now my part is like $300 a month and in 10 years when that spot is worth some money. I will be 10 years older. the added apartments will be a bigger benefit for me

Account Closed · Answer

It is difficult to say what each carrier is paying or is willing to pay to collocate on a tower. Site rental will differ significantly from area to area. The tower market has matured significantly over the last couple of decades. Most cellular companies will negotiate with the tower companies at scale. Think about buying in bulk. You would have to bring significant value to the table to encourage them to deal with a private operator. If the land is currently leased by a major tower company, there is a lot of value in maintaining that lease. The cost of the monopole and site improvements is only a part of the overall cost associated with getting a tenant on a tower. There is a significant expense in siting, engineering, and installation that most companies do not want to incur jumping from one pole to another.

There has been a trend in the industry to buy out the landowners with a perpetual easement. This sounds great, but then what do you do with the property? Another option maybe?

As cell carriers use higher and higher frequencies, the effective coverage gets smaller and smaller. The goal is to put the signal where the people are located.

Hopefully, you will have some luck with the tower companies. I would think that a private investor would be a great option.

Account Closed · Answer

I have been involved with tower real estate deals since the mid '90s. Historically, the industry has offered 10 times annual gross revenue for the tower. Their formulas will differ based upon company/financials, but this is a good SWAG figure. We have bought towers and have been made offers based on this general rule. For a land lease, I would think it would be a similar multiplier based on the annual revenue. The landowner has an excellent position under a tower as you generally profit handsomely from someone else's significant investment in the tower. With the rollout of 5G, odds are that tower space will become even more valuable. Having managed residential rentals vs towers, I would hold on to a multitenant monopole every day of the week. I can see wanting to go for the bigger deal. Good luck with your decision. It is an enviable position to be in.

Joel Owens · Answer

I listed a few cell towers in the past for owners but not many. The cell tower companies that buy them were generally offering 30 cents on the dollar for the income stream.

Their spiel was that the income stream might not last the full term of the lease so they discount it.

Maybe companies now pay up for them but this was 10 years ago. It depends on location too. If you have the best location that can;t be duplicated then it can become more valuable for the purchaser. If you have a (me too) pole then carriers might jump off when something better comes along. Additionally as carriers merge and buy each other out they sometimes need less poles in an area or have 2 on each pole from the company they bought out.

Brian Ellis · Answer

Id hold onto it. Heavily populated area, building another isn't an option? Technology is just getting started in that sense, these cell companies will pay top dollar to lease.

Get an estimate on being bought out, then crunch the numbers. You'll see why it makes sense to hold.

We have a smoke stack that is being leased by Verizon and T-Mobile.

Jay Hinrichs · Answer

Not sure in your area my bank foreclosed on a large project that had a mountain running through it with a few very Key towers at the top.

there are companies that buy these.. they sold them for big bucks I mean over 1 million.

Jeff Kehl · Answer

@Charley C.  there are at least 3 public reits that own towers that might buy it from you. American Tower, Crown Castle and Landmark Infrastructure. You can contact them from their website and might get an offer from one of them.

Charley C. · Answer

Account Closed I was wondering, as a basic rule of thumb, would each electric meter seen out by the pole, represent another carrier ?

Charley C. · Answer

Account Closed

I am very knowledgeable when it comes to multifamily (got kind of a tech savvy brain too) but really just don't have the same technical knowledge about cell towers

When I google mapped the area, I did see some  open vacant land a few miles away being farmed (you can get that in south texas) there is always a chance somebody can sneak in a mono pole (its not a monster sized tower) The people in the single family houses are really good tools to keep competition off your block but just a few miles away, people's voices will not be a as strong

What is a cell tower worth? Is there a good market for them?

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