Cell Tower Appraisals - Advanced Issues

If you have taken some cell tower appraisal work you have probably had to deal with a number of issues that are above and beyond simple site leases.  Here are a few "advanced issues" that you may have to address in your appraisal report.

Cellular Market Trends:  if you are not keeping up with what is happening in the cellular market nationally and locally, you are going to have to take the time to inform yourself.  Do you know what's going on with 4G / LTE services?  Are you aware of carrier mergers and site acquisition trends?  I don't think you can value a cell tower leasehold without knowing what is happening in this specialized market.  Check out www.ctia.org for help here.

Tower Value:  tower structure cost are available via Marshall & Swift, you need to know the height, age and other details about the structure to a reasonable estimate.

Carriers Per Tower: some towers are structurally designed to accommodate 2 or more antenna arrays which complicates valuations.  The practice of the
co-location of multiple carriers on a single tower is a common practice.

A tower's Broadband Equivalency / BBE relates information on its structural
capacity, can it handle a narrowband antenna (0.5 BBE) or maybe it can handle three broadband antennas (3.0 BBE).  Thus well designed structures with multiple antennas can generate a significantly higher income if demand exists.

Do you know how many BBE's are associated with the tower or towers that you are appraising, or what the capacity of the structures are?  Even if you are appraising only the cell site you need to know if the tower on it, or to be
erected on it, has the capacity for additional carriers. 

Sandwich Lease: when you have multiple carriers leasing from an original tenant a sandwich lease is created.  This (subleasing) is again a common practice that can benefit the underlying owner.  Are the provisions for adding BBE's reasonable in the lease.

National Environmental Policy Act (NEPA): NEPA reviews are required for towers constructed after March 15, 2001, and these environmental reviews identify potential problems with issues like endangered species, flood plains and airport proximity.

You can search cell towers lease rates and sales on www.Loopnet.com.  I still accumulate my own local cell site sales and cell site lease data, but if you are just doing a "one off" appraisal in your area and you don't have sales and lease rates you may have to pay a third party to secure it.

The Internet site www.cellreception.com offers a Google map that provides cell site locations and cell tower coverage ratings.  It's a great site for identifying competitive sites and towers.

For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.

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