Private towerinvestments10

INVESTMENTS FLOWING INTO

PRIVATE CELL TOWERS

By Ken Schmidt

President of Steel in the Air

INVESTMENT BANKS & TOWERS

“Cell tower acquisition & development in the U.S. has traditionally been the purview of large, public tower companies, such as American Tower (AMT), Crown Castle (CCI), and SBAC.

In the last 2-3 years, Investment Banks have shown an increasing willingness to finance small to mid-sized, privately owned cell tower companies. The escalation of this trend to invest in new entrants is not coincidental to an increase in the multiples of cash flow that are paid for tower acquisitions and a dearth of active tower developers.”

Ken Schmidt, President of Steel in the Air

WHY ARE CELL TOWER

INVESTMENTS ON THE RISE?

A combination of low

interest rates and

exploding demand make

communication towers a

good addition to any

portfolio.

THE DATA TSUNMAI

HAS YET TO CRASH

• AT&T alone has seen a 100,000% increase in the amount of data transmitted across its network from 2007-2015.

• Additionally, consumer demand for mobile devices is expected toskyrocket. Industry studies forecast more than 200 Billion new Internet of Things devices will be connected to wireless networks by 2020.

• According to the CTIA, during the past few years, there has been a 57%year-over-year increase in wireless data consumption on mobile networks.

INFRASTRUCTURE DEVELOPMENT

CAN’T KEEP UP

• Wireless providers in the U.S. have spent more than $134 billion in capitalinvestments in the past five years.

• Industry analysts forecast increases in cell site deployment from all BigFour Wireless Carriers through 2016: 20-30K macro cell towers and ~250Ksmall cells.

• All Big Four Wireless Carriers will be deploying new sites in sufficientquantities for the first time since 2008/2009.

• The industry extends far beyond traditional wireless carriers and involvesequipment manufacturers, backhaul producers and more. Technologicalinnovations require equipment upgrades, which happen systematically atexisting cell sites across the U.S.

• Modifications to accommodate new frequencies from the recent 700MHzand AWS-3 Auctions are currently taking place, and require multiple leaseamendments.

CELLTOWER INVESTMENTS

HAVE A STABLE FOUNDATION

• Grade A “Blue Chip” Company TenantsAT&T, Sprint, T-Mobile, Verizon

• Prepaid Long Term Leases

• Fixed Escalations typically around 3%

• Incremental growth on existing towers require very low capital investment

• Limited operating expenses which do not increase linearly with revenue

STOCK STEADILY INCREASES

FOR TOP 3 CELL TOWER COMPANIES

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015

SBAC

CCI

AMT

MAJOR TOWER ACQUISITIONS FOR

TOP 3 U.S. CELL TOWER COMPANIES

American Tower (AMT)2015 – 11,448 sites from Verizon

2013 – 5,400 towers and 9,000 rooftop sites from Global Tower Partners

Crown Castle (CCI) 2015 – 10,000 miles of Fiber for Small Cell builds

2013 – 9,700 towers from AT&T

2012 – 7,200 towers from T-Mobile

SBA (SBAC) 2012 – 2,300 towers from Mobilitie

2012 – 3,256 towers from TowerCo

TOWERS OWNED BY TOP 3 U.S.

CELL TOWER COMPANIES

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

American TowerCrown Castle

SBA Communications

*from the Wireless Estimator 8/17/15

39,739

14,87

3

39,928

TOTAL FUNDING RECEIVED BY 11

PRIVATE CELL TOWER COMPANIES

050

100150200250300350400450500550600650700

*in Millions of Dollars

BLUE SKY TOWERS

DATE CAPITAL SOURCE PURPOSE

3/14/14 $80 M Peppertree Capital

Mgmt.

To fund 700-800 new

cell sites in the next 5

years (2/3 rooftops sites/

1/3 macro cell towers)

Formed: 2014Towers Owned: Unknown; although we expect that it’s <50Sites Managed: ~1,000, including rooftop and smaller cell sites that don’t

provide cellular income. Footprint: NE United States

CENTRAL STATES TOWER


11/16/13 $35 M CIT Corporate

Finance

To refinance debt and

provide capital for

construction &

development of new

towers.

8/10/12 $35 M Goldman Sachs

Specialty Lending

Group

To continue development

of tower sites.

4/06/10 $25 M Goldman Sachs

Specialty Lending

Group

To continue growth of

tower portfolio.

Formed: 2008Towers Owned: 265

CTI TOWERS (COMCAST)


10/14 $30 M Debt Financing -

Undisclosed

To aggregate tower

portfolio.

2011 Undisclose

d

Seaport To continue development

of tower sites.

Formed: 2011Towers Owned: 230Towers Managed: 800

HORVATH TOWERS, LLC


11/20/13 $20 M The PrivateBank To develop and manage

cell sites for wireless

carriers.


Mgmt.

To develop cell towers.


INSITE WIRELESS


8/14 $177.5 M Secured cellular site

2013-1 Rev Notes

backed by

mortgages.

To develop and operate

cell phone towers.

2011 Undisclose

d

Seaport To continue development

of cell sites.

Formed: 2010Towers Managed: 1,100 + 16 DAS NetworksMajor Acquisitions: 2015 – 294 towers from CTI Towers; 2012 – Turis Sites of Canada

LIBERTY TOWERS (CIG)


8/13 $35 M Fir Tree Partners Preferred Stock Financing

Agreement

8/13 $25 M Fir Tree Partners To acquire cell towers.

9/12 $150 M Macquarie Bank To aggregate cell tower portfolio.

Formed: 2007Footprint: NE United StatesTowers Owned: 200 (recently sold)

PEGASUS TOWER


9/20/13 $20 M Cornerstone Holdings,

LLC & Highland

Holdings, LLC

To develop a new

portfolio of towers.

4/01/07 $15 M National City Bank To aggregate a sizeable

tower portfolio.


Fund, LP & Primus

Capital Fund V

To fund wireless

communications sites

developed and acquired

through the U.S.


PHOENIX TOWER


5/11/15 $32.5 M Banco General,

TowerBank, MetroBank

To support acquisitions,

new tower build

programs & growth

strategy


Major Acquisitions: 60 cell towers from American Tower Corp’s Panamanian tower business; 500 towers from T4U Holding Brasil

SKYWAY TOWERS


1/20/13 $77 M Tinicum L.P. & Permit

Capital Private Equity Fund

To develop wireless

communications

towers in strategic

location.

6/12/11 $65 M Goldman Sachs Specialty

Lending Group

To grow tower

portfolio.

3/08/09 $55 M Tinicum L.P. & Permit

Capital Private Equity Fund

To buy and build

tower sites.

Formed: 2009Towers Owned: 250Major Acquisitions: 2009 - 60 towers from Towers of Texas

TARPON TOWERS II, LLC


4/21/15 $60 M Redwood Capital

Investments & Tarpon

Towers

To buy and build cell

tower sites.

3/15/10 $15 M Spire Capital Partners

6/09/09 $25 M ABS Capital Partners To acquire and build

cell towers.

Formed: 2010Towers Owned: 78Footprint: Primarily SE & NE United StatesAffiliations: Dixie Towers, LLC; North Atlantic Towers, LLC; Florida

Tower Partners, LLC

VERTICAL BRIDGE

DATE CAPITA

L

SOURCE PURPOSE

12/10/14 $470 M Incremental equity

commitments in second

round capital raise


new tower build

programs & growth

strategy

9/10/14 $230 M Digital Bridge Holdings;

The Jordan Company &

The Edgewater Funds


new tower build

programs & growth

strategy

Formed: 2002Towers Owned: 2,864 owned/ managed and 1,406 land parcelsMajor Acquisitions: 2015 – 43 towers from Townsquare Media, 411 broadcast towers

from iHeartMedia, 200+ towers from a merger with CiG WirelessCorp.; 2014 - 595 decommissioned towers from U.S. Cellular*Vertical Bridge has the exclusive right to market 1,000+ Conterratowers.

Steel in the Air has been

assisting private landowners,

business and venue owners

and government entities with

cell tower and cell site lease

negotiations and valuation

since 2004.

© 2015 Steel in the Air – All Rights Reserved.

We welcome any questions or feedback.

Email: [email protected]

Phone: (877) 428-6937

mailto:[email protected]

Private towerinvestments10

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