Akron, OH May Sell Water Tower and Cell Tower Ground Leases

 

The City of Akron has decided to sell its cell tower and water tower leases to Everest Infrastructure Partners. Curious who they are? The founders are previously from Tristar Investors- a company that purchased easements under tower company towers in order to sell them back to the tower companies. I can’t say whether Everest has the same business model. What is interesting though is that Everest paid a pretty penny for these assets.

 

Why Cities Should Think Hard Before Selling Leases

 

Typically, we advise cities against selling their leases because the sale limits the ability of future city councils to use the underlying properties as they see fit. For example, in this case, the City of Akron won’t be able to tear down these water towers at the end of their life or redevelop the underlying properties where the towers sit. That may not be an issue in this case depending upon the location and age of the properties/water towers. We also advise against selling of leases because the buyout offers for the leases aren’t nearly as high as what Everest Infrastructure Partners paid here. With this type of multiple of cashflow, this transaction is more like that of a tower acquisition than a traditional lease buyout. That’s because Everest gets the current and future revenue from these structures and properties that were sold and the City gets none.

 

But Cities May Not Have a Choice

 

Of course, there are many cases where cities like Akron don’t have another immediately accessible source of funding that doesn’t require raising taxes and must turn to liquidating assets like these cell tower leases. Here the City of Akron was facing a significant cash crunch. We have worked with two other Ohio cities that also ended up selling their leases. In both cases, they evaluated whether the location of the tower or water tower would potentially impact future expansion or development plans. After evaluating the potential sale, they determined that they could live with the future obligations.

 

The Lease Buyout Market is Back

 

Another point of interest is that the lease buyout market is getting frothy- we are seeing more entrants and higher offers than at any time in the last few years. For example, we just received a call from a company that had shut its doors and has now found funding to buy leases again. If you are considering selling your lease, it may make sense to look at doing it now. If you need to know more about lease buyouts- we have a very handy and complete website about the subject- www.celltowerleasebuyout.com.

 

Give us a call and we can help you ascertain the market value of your lease and walk you through the options related to selling.

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Comparison of Large Tower Company and Wireless Carrier Tower Deals

We compiled a comparison of the three most recent wireless carrier tower company deals.   It is important to note that these numbers aren’t exact. For example, the Tower Cash Flow for Verizon/American Tower are projections from the first year of operation. On the AT&T/Crown transaction, the number of towers is rounded off.   Lastly, some like the Verizon/AMT transaction don’t include the net present value of the options to acquire these towers in the future. [Read more…]

How the sale of Verizon towers will impact leaseholders

WHY VERIZON’S TOWER SALE WILL SET THE MARKET

Verizon has hired an investment bank to assist it with the possible sale of its tower assets.  Macquarie Securities analyst Kevin Smithen estimates that there are 12,500 towers that might be part of the offering.  We suspect that the actual number will be smaller than that but still above 10,000.  Previous sales of communication towers for AT&T and T-Mobile yielded sizeable funds for each company and Verizon has suggested that the AT&T tower transaction opened their eyes.  We suspect that the answer is actually that Verizon wisely waited to be the last major carrier to sell their portfolio of towers and we believe that Verizon should see a better price per tower than either T-Mobile or AT&T did.   Verizon has suggested they want the deal done by the end of the year. [Read more…]

CCI expresses interest in buying Verizon towers

Crown Castle (CCI) is the largest of the Big Three U.S. tower companies, and currently owns 40K towers nationwide (followed by American Tower with ~28K and SBA with 15K).   In September 2012, CCI bought 7,200 cell towers from T-Mobile, and in October 2013 it purchased 9,700 from AT&T.  CCI spokesperson says the company is now open to buying 6K towers from Verizon, which would be a $3B acquisition. [Read more…]

Global Tower Partners is Up for Sale

Global Tower Partners

While we had heard about this previously, the news was not public until yesterday.   Reuters is reporting that MacQuarie has put Global Tower Partners up for sale.   Global Tower Partners owns 6,400 towers and manages or leases another 9,600 properties across the US.  Some of these properties are not active cell site locations, they are just large property owners who signed up with Global Tower Partners to market their sites.  Others are active cell sites, but ones where Global Tower Partners only owns the rights to the ground lease, not the towers.

 

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Subprime impact on Cell Tower Valuations and Cell Tower Lease Buyouts

It appears that the subprime issues will have an impact on the wireless/tower sector particularly regarding cell phone tower acquisitions and cell phone tower lease buyouts– especially for the mom and pop side of the industry. We suspect that 1/4 to 1/3 of the new tower being built this year come from Mom Pop tower companies or individuals. [Read more…]

Ownership of Towers by the Carriers

9/23/15 Update: Number of Cell Towers Owner per Carrier

It’s been almost a decade since we’ve updated this blog post (although we do keep our website up to date, and send out regular Cell Tower and Wireless Industry Newsletters on pertinent and timely developments in the network infrastructure industry). [Read more…]

Global Signal/ Sprint Tower Lease To Easement Conversions

Global Signal recently purchased through a long term lease 6000+ cell phone towers from Sprint PCS. In response to these transactions, Global Signal has approached landowners requesting that they sell out the interest in the ground lease for the cell phone tower to Global Signal in return for a lump sum payment and a assignment of lease. [Read more…]