Cell Tower Broker & Cell Tower Lease Broker

Steel in the Air and its founder, Ken Schmidt, have advised in the sales of $3 billion dollars’ worth of tower and lease assets over the last 20 years. Throughout that time, Steel in the Air (SITA) and Ken Schmidt (as a partner in Steel Tree Partners) have assisted on the sale of 3,000+ towers across the United States, Canada, and Central and Latin America. We broker large portfolios, individual towers, and cell site leases.

What is a Cell Tower Broker?

A cell phone tower broker is a company or individual who assists cell tower owners with selling their cell tower or portfolio of cell towers. The broker typically works on a commission basis and is paid only once a sale occurs. The broker markets the cell tower(s) to multiple potential buyers by putting together an offering memorandum that includes the following information:

  1. Revenue from tenants on the towers
  2. Revenue from tenants on the towers
  3. Details about the towers including location, type, and height
  4. Other pertinent details that are unique to the portfolio

The broker’s goal is twofold – to help you sell your tower(s), and to maximize the overall transaction for the seller (including both the fiscal and contract terms). The broker will help you find the buyer that is most likely to buy your tower(s) and close at the price they offered.

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    How Does a Cell Tower Broker Differ from a Cell Tower Lease Broker?

    While they both sell wireless assets, brokering a lease and brokering a tower are two different roles. Since 2004, SITA has brokered both leases and towers for our clients. We can say without a doubt that selling a tower is almost always more complex than selling a lease. The valuations are significantly different; a cell tower lease will trade for 18 times the annual lease income (or more), while cell towers typically trade at 30 or more times the “tower cash flow.” For reference, tower cash flow – or TCF – is revenue minus expenses.

    When you sell a cell tower lease, you will typically retain the underlying property and sell just the lease rights to another party, often through a long-term easement. The buyer obtains the rights to the income from the lease, but you still have the burden of the tower on the property.

    When you sell a tower, you may have a ground lease with the landowner, or you may own the land underneath. If you own the tower, you might also have equipment of your own on the tower which you want to continue using. The buyer takes over the rights to the income from the tower but also the expenses and obligations of operating and maintaining the tower.

    Why Do I Need a Broker for my Cell Phone Tower or Lease?

    There are a few reasons why most tower owners and many leaseholders use brokers to convey their cell tower asset or leases:

    1. First and foremost, we have tracked hundreds of tower sale and lease sale transactions over the last 20 years including many in the last year. As the market for towers and leases rises and falls, we see it first. We are retained weekly by tower owners and leaseholders to advise them on the value of their tower assets or lease.
    2. The broker knows how to best meet your objectives. Before we even create the offering, we discuss all possibilities regarding the potential sale. Should you sell land instead of only the tower or lease? Should you sell a part of your leases or towers? Because we’ve facilitated so many sales of leases and towers, we make sure that all your options are explored.
    3. The broker knows which information is most important to buyers and emphasizes it in the offering. If there are negative aspects of the tower(s) or lease(s), the broker advises the seller on when those issues should be disclosed or discussed with the potential bidders/buyers.
    4. We know which buyers are active or not, and which are paying the top rates for towers and leases. We can tell you which buyers are likely to go through with the transaction and which are more prone to re-trading the deal terms before closing. Not all buyers are the same, and the best brokers know that. Most tower portfolios have different value to different bidders and not all buyers of towers are interested in leases. We help find the one that best matches your tower(s) or lease(s).
    5. A good broker advises you through the entire transaction. This includes helping to assemble due diligence, answering bidder questions, helping to finalize the letter of intent and the purchase and sale agreement.

    What is the Process for Cell Tower or Lease Brokerage?

    Here is the abbreviated summary of a typical brokerage engagement.

    1. The seller signs an exclusive engagement letter with the broker.
    2. The broker reviews the client’s leases or tower-related documentation and generates an offering memorandum. The offering memorandum includes the core information necessary for the bidders to make informed bids.
    3. Upon approval of the offering memorandum by the seller, the broker distributes it to several potential buyers. For us, this is generally between 10-15 potential tower companies and buyers. 
    4. The buyers are required to make an offer to purchase the tower(s) or lease(s) by a certain date. Upon receipt of the offers, the broker puts together a summary of all the offers including the actual offers and any intangibles about the companies that made the offers. For example, one company may have a more onerous closing process while another seeks to find issues when they do their tower inspections. 
    5. The broker then goes back to the top bidders and provides them with additional information if necessary and requests their “best and final” offers. This may require more than one round of requests. 
    6. With help from the broker, the seller selects the offer that best meets their objectives
    7. The broker (with the seller’s attorney) negotiates a letter of intent (LOI). Once approved, the seller executes the LOI.
    8. The company looking to buy the towers or leases then commences due diligence and forwards a draft purchase and sale agreement (PSA) in the case of a tower or an easement purchase and sale agreement in the case of a lease. The broker and seller’s attorney review the draft PSA and provide comments. Once negotiated, the seller and buyer execute the PSA.
    9. The buyer reviews the due diligence and asks questions or requests additional information. As the broker, we then assist you with compiling this due diligence and we address any missing information. 
    10. Once the buyer approves the due diligence, a closing date is set. The closing is typically virtual, whereby the parties exchange and sign the closing documents electronically or via FedEx. During the cell tower closing, the proceeds are distributed to the seller, the broker, and to the title company via ACH or wire. 

    How Much Does a Cell Tower Brokerage or Lease Brokerage Cost?

    Our standard brokerage engagement fee is commission-based. For smaller transactions, the fee is typically 6% of the overall sale price of the assets. As the transaction value climbs, we reduce the fee to as low as 1%. If you have a cell tower (or lease) that you are considering selling, please reach out to us to discuss the situation and we can provide you a quote for your specific transaction. We think the better question though is what it will cost you if you don’t use a broker. In every transaction we have brokered, the seller easily received more value in return than the cost of our brokerage fee.  

    If you aren’t sure whether you want to sell your tower(s) or lease(s) and are just looking to get a rough estimate of the value to make a wise decision regarding what to do with your lease or towers, we are happy to help.  Here’s our commitment to you:

    1. We will review your lease or tower assets and provide a verbal estimate of your asset’s fair market value. 
    2. You are under no obligation to use our brokerage or any other services until you sign an engagement agreement with us.
    3. Any information you share will be kept strictly confidential.  Unlike other “consultants”, we won’t take your information and share it with a lease buyout company immediately. 
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