Topic 2- Sale-Leaseback and Build-To-Suit Transactions
Several of the largest wireless carriers have a history of selling large portfolios of tower sites to tower companies in exchange for cash— billions of dollars of cash. The carriers use the cash to buy frequency spectrum and to build new wireless facilities. Sale-leaseback deals result with the carrier, as a tenant, paying a pre-arranged rent to the tower company, as the new site owner. This significant flow of cash in the wireless business has been occurring for the past twenty years.1
Several years ago, large carriers were making public statements about how the business model of site management companies needed to change. It has changed through the rapid growth of microcell site technology which is discussed in Module 4 Wireless System Design. Currently, a few tower companies own many thousands of antenna structure assets, as do wireless carriers.2 It’s not getting easier to build new antenna tower structures, especially in highly populated areas with restrictive local permit regulations and where competition for use of vacant land is high.
Wireless carriers continue to develop new antenna sites on their own and on the structures of others. Meanwhile, tower companies actively pursue opportunities to build antenna structures for wireless carriers under build-to-suit (BTS) arrangements and master lease agreements (MLAs). Carriers are now seeking antenna placement on poles in public rights-of-way (PROW) and network connections to these antennas via fiber-optic cable also located in rights-of-way (ROW) to extend network coverage and system capacity.