Cell Tower Lease Rates article by Dgtl Infra about MLA Rates, Agreements, and Lease Buyout Values

A Closer Look at Dgtl Infra’s Article about Cell Tower Lease Rates, Agreements, Buyout Value.
Steve:
Hey, YouTube, this is Steve over at Tower Genius. I wanted to do a quick, important video actually. So if you go over to Google and you search cell tower lease rates, cell tower lease rates, you’ll see that as of, I guess this month here, maybe August at some point, there was an article published by a fellow named Adam Simmons on August 9th. He’s a writer for Digital Infrastructure Magazine and it’s online article, and talks about cell tower lease rates. And it is a very well-written article, it’s got some nice graphics in it. It kind of breaks things down.

I printed out a copy and I have it here in front of me. I’m looking at it. And so on its face, this is an informative, unbiased. There’s really no hook here. He’s talking about what is a cell tower lease rate? Cell tower lease rates, and he breaks it down. What are the drivers of cell tower lease rates? And on its face, I mean, it is an informative article talking about 5G cell tower lease rates, cell tower lease rates by wireless carrier, breaks it down.

So the question is, who is searching for this information? Really, this article is written based on publicly available information on master lease agreements, not on cell tower lease rates that Mr. or Mrs. Landlord or property owner are paying. The type of people that are actually searching for the information on Google, they’re looking for information on, “Hey, I’ve been contacted for a new cell tower. What is it worth?” Or, “Hey, I have a Crown Castle. I have a single carrier Crown Castle tower on my rural property out in Texas with AT&T on it and the year 19. What is that worth if I renew it?”

“Or I have a two carrier SBA Communications tower in whatever state, that’s in year 23 of the 25-year lease with two tenants that have been there for over 20 years each. What is it worth?” So that the article doesn’t dive into this. It’s a general overview and it’s really written for people that are maybe invested in companies like Verizon or they have their own stock with American Tower, or SBA Communications, or Crown Castle, and they wanted to really understand the business.

The publicly available information on MLA. So the article really if it was titled properly, it would be Cell Tower Lease Master Lease Agreement Rates. Because what it doesn’t go into is, “Well, what if you have a tower on your property?” Let’s say you’re a Crown Castle landlord and I’ll give you a perfect example. A Crown landlord gave us a call with AT&T on their property and they were getting revenue share. And based on my calculations with what the revenue share percentage was that this property owner had, the cell tower landlord had in that lease agreement, we were able to figure out very quickly that AT&T in a rural property was paying Crown Castle over $8,000 a month based on the percentage of revenue share that property owner was getting.

If you look here, it says AT&T and Crown Castle, they have 9,708 towers, $1,900 a month, 2% fixed. So I’m sure that the tower industry loves to have this information out there in the public because yeah, that’s what it is. I guess when they are acquiring a large bucket of towers, but the rents being paid out to the landlord are not based on these numbers, and it’s just on these grandfathered towers.

So if you have questions again … So the information, again, it’s a well-written article, but it’s written for the general public, not for the cell tower or cell site landlord. That’s an important distinction to make here. I did actually reach out to the author of the article and he did respond to me, so I give him credit for that. But as far as people searching for help regarding, you’re going to have to read the article twice and you’ll figure out that this is not written for anybody that actually has a cell tower on their property. This is just for the general public.

And I don’t want to say it’s clickbait, but the thing is who searches for cell tower lease rates? Who’s looking for that information? It’s not the shareholders that have hundreds of thousands of dollars worth of American Tower stock, it’s the people that need help with their agreement. So that’s my angle. Yeah. So we are looking to help you if you have questions about a cell tower lease valuation or the values of a new cell site on your rooftop, or if you’re looking to sell the lease, we can also help you with that.

The article also goes into these valuations towards the end of the article here says here, “Recent precedent M&A transactions for cell towers in the United States indicate that leases are being valued at the cash tower flow multiples of 30X and higher.” Again, that has nothing to do with what they’re paying a landlord. If company like Everest Infrastructure has a thousand towers and looking to sell it to Warren Buffett, that’s the type of multiples they’re talking about. Not the onesies, twosies where a property owner is looking to cash out of their rental stream.

So again, this is why finding credible information on this bizarre industry that’s very esoteric. No one really knows anything about cell towers, very few people. And the article didn’t go into private cell tower lease rates just because it’s not available publicly, it’s not out there. You’re not going to find that information by doing research on the internet as it was clear here. The article did a good job based on the publicly available information that the industry puts out.

And yeah, I’m sure Crown Castle, SBA and American Tower love to have an article like this because it says, “Hey, we only get 1,900 bucks a month escalating at 2% a year so we can’t pay you more money.” Well, it’s always good to get a second opinion. Thanks and visit us at towergenius.com or give us a call if you have questions at 888-313-9750.
TowerGenius

I was recruited out of Enterprise Rent a Car in 2000 by Kevin Donohue, who is my business partner today, to be a real estate site acquisition manager in the NYC Metropolitan Area for his company that was contracting for Verizon Wireless, T-Mobile and Sprint. In 2008 I founded a consulting firm know today as Tower Genius, LLC where Kevin and I have helped many thousands of people and existing cell tower landlords get the help and information they need to succeed at the cell tower negotiating table.

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