Cell Tower Buyers Have a Big Advantage

This is what we would like to explain. Cell tower lease buyers have a big advantage over sellers and it isn't even close. I've watched for years, sellers either get a call from cell lease buyers or even worse call the buyers themselves thinking they are going to play one against the other and get the highest price possible. As I said, it's not even close.

Before you 'go it alone' you may want to spend a couple months learning how secure your tower is with regards to being or becoming redundant: learn the mathematics cell tower lease yields and what the buyers consider the carriers' risk of being bought, merged or going out of business altogether.; spend hours and hours doing the yield math the buyers require when they look at a lease; know which buyers are more likely to bid highest. Now you'd be ready to begin. Problem is talking to cell tower buyers without at least an informal bid process is inviting yourself to a gunfight armed with only a knife.

Churchs: Low Lying Fruit

When buyers talk to a seller they can smell the 'low lying fruit'. Let me give you an example. Let's say you are talking to three or four potential cell tower lease buyers and buyer #1 offers you $140,000 for yuour $1,000/month lease and tells you that a monthly multiple of 140 is really very high. Buyer #2 over bids buyer #1 by bidding $145,000 (a monthly multiple of 145 and talks you into the deal telling you that buyer #1 is right when he told you that the 140 monthly multiple is really high, but he'd give you $145,000 if you sign now. Buyer #3 has not even bid yet and the deal is over. The fact may have been that the multiple buyer #3 would have paid $180,000 or higher (a 180 multiple) or more.

Monthly multiples are not accurate measurements of value. The time frame to the next escalation of your lease rent is a big determination of value when buyers calculate their internal rates of return. Example: a cell tower lease with a five year escalator with 1 month till the next escalation of 15% could be worth a 200 monthly multiple, or $200.000, while the same lease with 59 months till the next escalation may only be worth less than a 180 month multiplier, or $180,000.

By allowing us to put together an open auction for you, we will alert the cell tower lease buyers to the fact that they have a professional, that knows the current market conditions representing them.

Call us for more information to talk about getting your auction on.

Just saying!