Are Investors Getting Spooked by Build-to-Relocate Tower Strategies?
Last month, two major private cell tower companies went to Wall Street to raise capital. According to data in the Houlihan Lokey Digital Infrastructure Update (Q1 2026), both companies received a BBB− credit rating. On paper, rating agencies viewed them as having the exact same level of risk.
But when it came time for the market to actually price the deals, investors treated them entirely differently.
- Vertical Bridge: Borrowed $1.6B at an interest rate of around 5.5%.
- Tillman Infrastructure: Borrowed $850M but was charged a steep 6.77%.
Same exact risk rating, but Tillman was forced to pay 1.35% more in interest. On an $850M deal, that amounts to an extra $11.5 million in interest expense every year.
Why did Wall Street penalize Tillman so heavily?
It comes down to a debate playing out in the industry right now — and to understand it, you need to know what build-to-relocate actually means.
When carriers like AT&T and Verizon lease space on a tower, those leases escalate every year. A tower lease that started at $1,600/month in 2000 — with a standard 3% annual escalator plus additional bumps each time a carrier upgraded equipment — can easily run $3,500 to $5,000/month today, and we regularly see leases exceeding $7,000/month. Over tens of thousands of sites, that adds up fast. Build-to-relocate developers like Tillman offer carriers an exit: build a new tower right next to the expensive one, charge the carrier significantly less rent, and let them move their equipment over. The old tower loses its tenant. The carrier saves money. The developer gets a new anchor lease.
It works best — and happens most often — in rural areas and places without formal zoning requirements, where building a competing tower doesn’t require fighting through a local approval process.
Vertical Bridge does some build-to-relocate work too, but it’s one small piece of a diversified portfolio of 18,000+ towers. For Tillman, relocation has been the primary strategy.
By demanding a higher interest rate from Tillman, Wall Street sent a clear message: investors are getting spooked by relocation-heavy portfolios. They’re asking hard questions — will carriers actually stay on these towers long-term? What happens if carriers tighten capital budgets and slow down their appetite for moving? Those aren’t hypothetical risks. They’re the kind of questions that matter when $850 million is on the line.
The takeaway: Not all steel in the ground is valued equally. Build-to-relocate has driven real growth for private developers, but Wall Street is now charging a heavy premium for it. Investors are looking past the official rating label and staring hard at how these towers actually make their money.
If you own land near an existing tower — especially in a rural area — you may already know that build-to-relocate developers have been active in your market. Have you been approached? And if so, did you know that the long-term stability of that lease may look very different from a traditional tower deal?
Steel in the Air has advised landowners on cell tower leases since 2004. If a developer has approached you about a new tower on your property, we’re happy to help you understand what you’re actually being offered.
1 thought on “Wall Street Is Discounting Build-to-Relocate Towers. Landowners Should Pay Attention.”
We have had a cell tower on a corner of our industrial location, in an industrial section of a sea coast town for a number of years. When it was time to renew our lease, knowing almost nothing about the cell industry, we made the fortunate choice of engaging SITA, Ken and Gypsy, to advise us. They gave us three suggested levels to pursue: a low level that would be sure to obtain a new lease. A medium level that might also gain a renewal and a high level that would about double our present annual return but might lead to rejection or negotiation. They suggested that our location near other much larger industrial sites was valuable and so we won with the top offer. Ken and Gypsy have been doing this for years and they know what they are doing.
A year ago we determined that we needed to move to the other side of town for the safety of our employees. This involved the sale of the cell tower lease. Again we engage SITA and are very glad we did. The very large player and holder of the lease invoked their right of first refusal. Ken and Gypsy worked through all of the details and we cashed the lease out at three times what we had been offered for it locally. In conclusion: If you have not bought and sold cell tower leases for twenty years, you are unlikely to be as pleased with a cell transaction if you do it yourself rather than hiring Ken and Gypsy to do the hard parts with you.