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.
The AT&T tower transaction yielded approximately $4.85 billion and approximately $485,000 per tower. Meanwhile, the T-Mobile portfolio of 7,202 towers yielded significantly less at $2.4 billion and $333,241 per tower. So why do we believe that Verizon will set the market both in terms of the amount per tower and the total size of the transaction?
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We anticipate that Crown Castle will end up victorious in the acquisition of the Verizon tower portfolio. They have an existing long term relationship with Verizon. They purchased both the AT&T and T-Mobile portfolios. They are focused more on the United States than American Tower. The uphill battle for Verizon’s advisors is how to get other companies to provide competitive bids to push Crown up to full value.
What does this mean to landowners with leases under Verizon towers? Pretty simply- it means that they should do nothing through the end of this year. Do not extend your lease and definitely do not sell your lease to a third party. Then contact us after the winner of the portfolio has been announced and we can help you determine your best options after the smoke has cleared.
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Thanks for your sensible advice. You have always offered good advice. Will be in touch when the Verizon deal is complete.
In worst-case scenarios, property owners even sign away the control of future decisions for their own land without realizing it.