Cell Tower: Lease/Contract Brokers

[hastalavista]

I went to a conference last year where the topic of valuing cell tower leases was shortly discussed.

One speaker mentioned that cell tower leases are becoming more "liquid" as there are a network of brokers who specialize in brokering these types of instruments. I've looked on the internet and found a number of brokers who advertise for that service. I am going to call a few and see what kind of information I can get.

But, is anyone familiar with a published source that indicates what the typical commissions are for such transactions (a range)?

Any help/suggestions are appreciated.

Thanks

 

[Michael S]

I've seen several properties trade with cell phone towers included, but never a seperate site that just included the cell phone tower. In many cases the antenna is mounted on the roof of a tall building.

 

[hastalavista]

This particular location is on a residential-use property with a few acres; the tower is situated at one corner of the site (away from the residence) in an area that is used as pasture land.

To be clear: I'm asking about brokers who sell existing leases as financial instruments; not the physical site itself.

 

[hastalavista]

Just to follow-up:

I was able to speak with several different representatives from companies who specialize in cell tower acquisition; either acting as a broker or purchasing for their own portfolio/client's portfolio.

Here's a quick summary:
A. Apparently, Nextel is decommissioning many of its sites. These are older sites.
B. Consensus for broker fee: an always "it depends", but 10% seems to be the rate.
C. Many jurisdictions have moratoriums (or, is it moratoria?)on erecting new towers, so existing sites that are functional have value. Apparently, on a smaller (non-braced, monopole tower; height up to 200-feet), it takes about 10-feet additional height to add another cell.
D. Technology is shifting toward a lower frequency; lower frequency means greater transmission distance. This may limit demand for future sites.
E. While many participants use a NPV calculation, Cap rates are also being used more and more as the uncertainty for the renewal years makes the DCF questionable. I heard prime carriers were trading at a 12.5-13% cap rate on the lease; non-so-prime, 15-18%.

The persons I spoke to were very willing to share their perspective. Two local (California, regional) companies and one national company (located in Mass.).

Thanks to those who PM'd me with help as well!

 

[CANative]

Here's a pair of commercial lots I have to deal with a couple of times a year. It's in Citrus Heights. Just finished it up on Thursday for the 2011 tax year. No change from 2010 but it looks like 2012 is looking good for another reduction.

I figured the NPV of the cell tower income was $165k using the "While many participants use a NPV calculation," method. Putting a 15 cap on it's income results in $176k.