Why 2025 Is a Turning Point
After several years of elevated interest rates that dampened acquisition activity and lowered tower valuations, the recent Federal Reserve rate cuts have created an entirely new landscape for owners. Lower borrowing costs have reduced investors’ required yields, which means they can now afford to pay higher prices for the same stream of rent. This has already led to increased competition among tower buyers, with more offers being made and pricing pushing upward. Owners who may have delayed selling in 2023 or 2024 are now re‑evaluating, as the market appears to be entering a window where valuations can recover rapidly. Acting during this early phase can often yield the best results, as spreads may tighten over the coming months.
Understanding Cap Rates and Risk
Cap rates are the key metric in lease buyouts and represent the buyer’s expected return. They are influenced by prevailing interest rates plus a risk premium based on the tenant’s credit, remaining lease term, and potential for rent growth. A property with a national carrier like AT&T or Verizon and a long remaining term will trade at a lower cap rate, meaning a higher purchase price. Sites with co‑location potential or multiple tenants attract even more aggressive pricing because investors see a path to higher future income. Conversely, short remaining terms, subtenant arrangements, or single‑carrier exposure may raise the cap rate and reduce value, which is why owners should take steps to mitigate risk factors where possible.
Preparing Your Site for Sale
The preparation process can significantly influence the final sale price. Owners should work with their counsel to review title and remove restrictive rights of first refusal or purchase options, as these can chill bidding. Documentation on utility easements, fiber connectivity, and compliance with zoning should be assembled into a single, clear packet for buyers to review. Sites that have clear, well‑documented rights of access and power are perceived as less risky and attract stronger bids. Owners should also be prepared to answer questions about past rent escalations, any upcoming renewals, and whether there are opportunities to add equipment or tenants in the near future.
Timing Your Exit
Choosing when to sell is just as important as how you sell. Immediately after rate cuts, buyers are often willing to stretch on pricing to secure deals before competition drives cap rates even lower. This can create a short window where multiple offers arrive at or near peak valuation. On the other hand, some owners choose to monitor the market for several months to see whether further easing drives even better pricing. The ideal approach is to run a competitive auction process, which forces buyers to put forward their best offer and allows owners to gauge true market appetite in real time.
