Everything You Need to Know
Get quick answers to frequently asked questions about our advisory services and how we work.
What are my tower assets worth?
The value of a tower asset is typically based on a multiple of annual net cash flow taking into account the interrelationship among the maturity, growth potential, and quality of the facility. Annual Net Cash Flow being defined as Gross Income minus Expenses. Expenses typically include insurance, maintenance, real taxes, land lease and utilities.
The multiple paid for the tower assets depends upon the following factors:
- Zoning – Is the tower in a protective zoning environment or one that prohibits additional towers from being built?
- Capacity – Is the tower structurally capable of supporting additional tenants and is the ground space area sufficient formultiple users?
- Competitive Structures – Are there other structures (towers/buildings) of sufficient height nearby that a potential tenant could use?
- Current Tenant Base – Which tenants are currently using the tower and are they creditworthy?
- Urban/Suburban/Rural – Are the towers located in high growth areas?
How does the auction process work?
Typically SteelTree will compile a descriptive Confidential Offering Memorandum which is distributed to all known buyers. Buyers are instructed as to how to submit bids. Once final offers are received and qualified you can choose whether or not a sale is advantageous.
Why should I consider SteelTree?
We bring over 25 years of real estate expertise to bear on every transaction. We have worked on the buy side as well as the sell side and therefore have a unique understanding and perspective on how a transaction is completed. We will protect your interests throughout the process and get you the value and terms you deserve. We want what is best for you.
Why is it a good time to consider selling?
While valuations peaked in the summer of 2023, they are still higher than they have been over the last few decades. Despite moderate interest rates, there are still 15+ buyers anxious to buy communication tower assets. Towers have been, and continue to be, stable assets with predictable, secure returns.
What do your services cost?
Our sales advisory services are offered on a typical contingency-fee basis and generally represent 6% or less of the transaction value. If you are selling a portfolio of towers or leases, the contingency fee is a sliding scale based on the cumulative value.
For tower and portfolio valuations, these are offered on a flat fee basis. Single tower or lease valuations start at $5,000 each. Portfolio valuations are quoted on a bespoke basis.
Before you engage us to advise on the sale of a cell tower lease or tower, we will gladly review your situation and share a “back-of-the-napkin” verbal estimate of the value at no cost to you.
Can I sell recently developed assets without losing future value?
There is presently a very hot market for recently developed growth assets. Depending on factors such as location, projected lease-up, and pending business, buyers will go to great lengths to acquire this type of asset, including earn-outs for tenants added post-closing. That said, if a potential tenant has expressed interest in one or more of your towers, it may make sense to hold off on selling the tower until after that interest is confirmed. If you need help determining the best time to sell your tower(s), we would be happy to discuss timing and valuation implications. Contact us for a free discussion.
Are all tower buyers the same?
No. There are dramatic differences among buyers. Their personalities, tactics, and changing motivations must be considered when choosing which offer to proceed with. Some buyers prefer to make higher upfront offers- but then aggressively renegotiate after the purchase agreement is signed if they find any deficiencies in conducting due diligence on the tower portfolio.
Our insight will be useful when choosing the buyer that is best for you. After bids are in, we help you make an informed decision about which buyer is best for your situation, even if they aren’t the highest bidder.
I am not ready to sell my towers yet, are you still able to help me?
Absolutely, we regularly work with tower developers and owners who need assistance with proposed leases, lease modifications, and lease renegotiations. We also help tower developers “predict the future” of the market to understand when to consider selling their portfolio.
How do equipment limitations in collocation leases impact tower valuation?
Having favorable lease language that includes strict equipment and loading limitations is a significant value driver for tower owners. When carriers need to add heavy 5G equipment, these limitations often necessitate lease amendments and additional rent. We have found that portfolios with well-structured collocation leases—those that clearly define and limit the allowable equipment—can see a 5% to 10% increase in overall valuation. This language ensures that the owner, rather than the carrier, captures the incremental value of network densification and technology upgrades.
What is the current market multiple for a cell tower lease buyout?
In the current market, cell tower lease buyouts typically range from 15x to 22x the annual rent, with an average of 18-19x. High-value multiples are usually reserved for “Tier 1” carriers (AT&T, Verizon, T-Mobile) with strong annual escalators (3%+), revenue share clauses, towers with multiple tenants, and no Right of First Refusal (ROFR) clauses. While shifts in interest rates can affect these multiples, a competitive bidding process often pushes valuations to the higher end of this range.
Why should I use a broker instead of selling directly to a lease aggregator?
Selling directly to an aggregator who contacts you via mail or phone often results in an “off-market” price that favors the buyer. Furthermore, many lease aggregators now portray themselves as “consultants,” offering free reviews and making bold, often dishonest promises about finding new tenants or having a carrier already waiting to use your site. In reality, these are often tactics to secure exclusive rights to your lease at a discount. A broker like Steel Tree Partners creates a transparent, competitive bidding environment, often bringing 5 to 10 institutional buyers to the table simultaneously. On average, our competitive process increases the final sale price by 20% to 40%, ensuring the owner captures true market value rather than succumbing to high-pressure sales tactics.
How does a 1031 Exchange work with a cell tower lease sale?
A cell tower lease sale can qualify for a 1031 Exchange if the transaction is structured as the sale of a perpetual or long-term easement rather than just an assignment of rent. By selling the real property interest (the easement) and reinvesting the proceeds into “like-kind” real estate, owners can defer capital gains taxes. Because the IRS rules for telecom assets are specific, it is critical to use a specialized intermediary and ensure the sale agreement is drafted correctly to qualify as real property.
What is a "Right of First Refusal" (ROFR) and how does it affect my sale?
A Right of First Refusal (ROFR) is a clause that gives the existing tenant (the tower company or carrier) the right to match any third-party offer you receive for your lease. ROFRs can significantly suppress the sale price because many buyers are unwilling to invest in due diligence for an asset the tenant can “pre-empt.” In portfolio sales, ROFRs are particularly tricky: some carriers use them as leverage to secure more favorable lease terms or rent reductions before agreeing to waive them, which directly devalues the asset. We specialize in navigating these aggressive tactics to ensure owners still achieve a competitive, top-of-market valuation.
Can I build my own cell tower instead of leasing my land to a carrier?
While building your own tower allows for 100% rent retention, it is a massive undertaking that is nearly impossible for individual landowners to undertake. Beyond the high capital costs and zoning hurdles, securing a Carrier Commitment is the primary barrier: carriers almost exclusively partner with established tower companies and rarely sign leases with individuals unless the property is a unique, one-of-a-kind location essential to their network grid. For most owners, the most viable path to monetization is through a traditional lease-up or a strategic buyout of an existing lease. Please do not contact SteelTree Partners to see if we can help you build a tower or get a lease on your land- we are unable to help.
What are the risks of a "perpetual easement" vs. a fixed term easement?
A perpetual easement is a permanent transfer of rights to the tower site, which can simplify the payout but permanently encumbers the property title. A fixed-term easement (e.g., a 50-year easement) eventually returns full control of the site to your heirs. While perpetual deals offer the maximum immediate cash, term-limited deals may be more appropriate for owners planning to sell the “parent” land in the future. We provide a side-by-side analysis to help you choose the best structure for your long-term goals.
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52 Marcellus Avenue
Manasquan, NJ, USA
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