Major Factors that Affect Cell Tower Lease Buyout Values
Comparison of Cell Tower Site Lease Buyout Values
Here are some examples of cell tower sites, equipment, and lease terms, that have the greatest affect on the buyout value.
Valuation Chart for Determining Cell Tower Lease Values
Time remaining until the expiry date of the cell tower lease.
Most buyers of cell towers and cell tower leases want to re-negotiate the lease as soon as possible. This makes shorter remaining lease terms more attractive and more valuable.
increases lease value
Little Time Left
decreases lease value
A Lot of Time Left
Number of wireless tenants or carriers on the tower site, or rooftop. Pretty simple, more cell carrier tenants = more rents received = higher lease value
increases lease value
More Tenants
decreases lease value
Fewer Tenants
Type of wireless tenants or carriers on the cell tower site or rooftop. There are different tiers
of carriers based on credit rating, size, etc.
increases lease value
Top Tier AA Rated Carriers
decreases lease value
Bottom Tier and
Non-investment Grade
Right of First Refusal in Master Lease. Master lease can contain a Right of First Refusal Clause that allows the tenant the right to match a purchase offer in price and term to protect their asset from sale to a third party.
increases lease value
No
decreases lease value
Yes
CONSENT in Master Lease. Some Master Leases contain a consent clause that requires the carriers consent on the sale of the lease. This is not to be "unreasonably denied" but does add an unknown sale-ability factor.
increases lease value
No
decreases lease value
Yes
Lease provides for Co location Rent Increases. The master lease is written to provide rent increases for every tenant that is added.
increases lease value
Yes
decreases lease value
No
Lease Provides for Revenue Share. The master lease is written to provide a percentage of the overall monthly or yearly revenue to the site owner.
increases lease value
Yes
decreases lease value
No
Current Leased Area is Full and Has no More Space for Equipment. Any additional space that is needed will increase the monthly rental amount to the site owner.
increases lease value
Yes
decreases lease value
No
Current Tower/Rooftop Has a Direct Carrier Overlap. Consolidation is an on going occurance with the carriers. Current overlaps include Tmobile/Metro, AT&T/Cricket, Sprint/Nextel.
increases lease value
No
decreases lease value
Yes
Lease Provides for Rent Increase Due to Technology Upgrade. Master leases are sometimes written with language to provide additional rent to the site owner if upgrades are made to the site, especially if the upgrade requires additional space.
increases lease value
Yes
decreases lease value
No
Lease Escalation Rate. Each lease is different, but obviously the higher the increase, the higher the value of the lease.
increases lease value
Higher Escalation Rate (more than 3% per year)
decreases lease value
Lower Escalation Rate (less than 3% per year)
