Cell Site Purchase Sets Record: How Does This Affect Your Cell Tower?

CNBC is reporting the sale by Mobilitie, LLC of 2,300 cell sites forĀ  a record $1.1 billion. The buyer was SBA, a major player in cell site leasing and site development. Not many details of the sale were revealed.

What I do find revealing, reading between the dollars, is that there are two major clues that history buffs should support. First individual cell sites have gone from monthly multiples (price divided by monthly rent $) 80 times rent just a few years ago to this record sale of 176 times monthly rent. More than a 100% increase. A bubble is nearing?

When I ask myself, “How far can prices rise?”, I’m reminded that at some point, investors/buyers, who buy cell tower leases for the rent as a return on their investment, are going to not only lose the incentive (returns) to chase prices, but very well could decide to become sellers themselves. The cell tower buyers are sitting on a great deal of profits at this point and they are inherently aware of how a window of opportunity can close quickly.

Individual cell towers prices could be affected, but don’t use 176 monthly multiple, Mobilitie’s sale had some special circumstances I’m sure. However looking at pricing of 130 to 150 times monthly is definitely in the ballpark

I believe, that at these pricing level we’ll see a ‘rolling bubble’. Profits taken in the US cell site market will roll

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Cell site sale reaches record pricing

into foreign cell site purchases where multiples are still close to 1oo times monthly rents. Rates of returns are much higher. We’ll see.

 

Before you try and negotiate any cell site lease transaction, get a quote. You will be money ahead. 760 470-1782

Andrew G Kellerman’s financial background includes: VP, Thomson McKinnon, Stocks; US and Corp Bonds; Insurance; Commodities; Options; Real Estate; Mortgages; Cell Site Lease Consultation and Sales

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2 Responses to Cell Site Purchase Sets Record: How Does This Affect Your Cell Tower?

  1. Jesus says:

    I don’t agree with you. . .I think this is the end of the tower in this town. It started with the Tally pproerty in January 09 (see Ocean Star postings), when a group calling themselves CATT(Citizens Against Tally Tower) begin to protest and lobby against construction of the T-Mobile tower, and some four months later the owner of Tally’s announced that he would be closing the 56 year old facility. Personally I don’t see what the objection is: there swapping one tower for another. I think that the monopole looks less obtrusive with a smaller footprint, than what’s there now. It’s my recollection that the current tower has been there some 30 years. . .it will need to be replaced at considerable cost. As for other carriers. . .that could either have been written into the Planning Board Resolution, keeping it just T-Mobile, or requesting them to file an amended application if the town wanted other carriers. . .with regards to icing: again written into resolution requiring anti-icing equipment, but the current tower has no such equipment. I’m even wondering if the Planning Board ever got involved with the foot print slab, the erection of the existing tower, the antennas on it, transmission lines, lightning protection, and communication equipment and it’s housing(shed). . . No one seems to have made any mention of it?

  2. Administrator says:

    Sounds like the city could use a cell tower consultant