Confidential Portfolio Evaluations
“The price per asset far outweighs the multiple.” SteelTree Partners is regularly engaged by lenders, investors, and owners to provide valuation services for proposed or existing tower portfolios. To determine the fair market value of a proposed or existing tower or portfolio, STP relies on proprietary comparable sales data from hundreds of transactions over the last twenty-five years. The data was obtained from guidance provided by SteelTree Partners to prior sellers, along with other relevant industry sales data, including private transactions.
Towers are bought and sold based on an implied multiple of annual net cash flow, rather than on capitalization rates common elsewhere in commercial real estate. Net Cash Flow is a term of art in the tower industry and is defined as Gross Revenue minus (Insurance plus Maintenance plus Land Lease plus Real Property Taxes plus Utilities plus Monitoring). Most potential buyers in the industry will use their own historical data for similar towers and infer expenses rather than use the sellers’. The multiple is determined by a number of factors, including but not limited to, and in no specific order:
Competitive Tower Environment
Licensed Carrier Coverage at Subject Site
Zoning Restrictions on the Placement of New Towers
Type and Quality of Tenants
Age of Tower
Location and Service Objectives of Tower
SteelTree Partners evaluates each potential or existing tower individually based upon the factors listed above. SteelTree Partners then reviews the portfolio as a whole to determine whether its size and composition will affect the multiple. By comparing these factors with those from other tower transactions, SteelTree Partners can determine the appropriate valuation and resulting multiple.
This valuation is typically provided as a “letter of opinion” assessing the value of tower assets. SteelTree Partners’ clients have used these letters to help procure funding from banks and other financial institutions. The members of SteelTree Partners have also been retained as expert witnesses in tower valuation lawsuits to provide valuation services.
If you have a portfolio of towers and are attempting to determine whether you should sell them or hold on to them, SteelTree Partners offers a free verbal valuation of your tower assets. We do not advise landowners who lease land for a tower on their property. Please and a member of our staff will compile the necessary data to complete the valuation. If you need a formal written portfolio valuation, SteelTree Partners will provide this service for a nominal fee and can provide an estimate for a letter of opinion tailored to your specific needs.