Cell Tower Valuation Model

In today’s hyperconnected world, the steel and spectrum behind our phone calls, streaming, and cloud access are becoming just as valuable as the properties we live and work in, growing the need for a cell tower valuation model. Cell towers, once overlooked as niche utility structures, have quietly become high-demand assets in the commercial real estate landscape. From remote mountaintops to urban rooftops, these vertical sites are generating reliable, inflation-protected income and commanding premium valuations.

Interest in this asset class is accelerating across markets, driven by 5G deployment, rising data consumption, and the ongoing expansion of wireless infrastructure. It’s not just telecom operators taking notice; private equity firms, infrastructure funds, and real estate professionals are also recognizing the value these assets bring to a diversified investment strategy.

To meet that demand, we built the Cell Tower Valuation Model, a detailed, Excel-based tool created specifically for professionals underwriting telecom infrastructure. Designed using A.CRE best practices, this tool helps you build projections, test scenarios, and understand upside in a space where traditional real estate models fall short.

In what follows, I’ll unpack the valuation mechanics behind cell towers, walk through current market trends, and explain how this model can bring structure and insight to one of CRE’s most overlooked yet essential asset types.

WHY UNDERWRITE CELL TOWERS IN 2026?

The fundamentals driving tower demand in 2026 are stronger than ever. As wireless networks expand and technology continues to evolve, cell towers sit at the intersection of connectivity and cash flow, and investors are taking notice.

Here’s what’s pushing the market forward:

• 5G rollouts continue to require denser networks and more site-level infrastructure.
• New operators are entering competitive markets, pushing coverage into previously underserved areas.
• Data usage per user keeps climbing, forcing carriers to upgrade and expand their networks.
• Rooftop and stealth installations are becoming essential in urban environments with zoning and visibility constraints.

For professionals underwriting these assets, the opportunity lies in applying a structured, transparent approach to a growing asset class that’s traditionally been modeled in less conventional ways.

CAP RATES AND TOWER MULTIPLES – HOW THE INDUSTRY FRAMES VALUE

When it comes to pricing cell towers, the industry speaks a slightly different language than traditional real estate. While cap rates are still relevant, most tower transactions are benchmarked using cash flow multiples, a simple, intuitive way to express value relative to income.

In practice, they’re two sides of the same coin:

• 30x multiple = 3.3% cap rate
• 17.5x multiple = 5.7% cap rate

Tower assets, which typically incur operating costs, are valued using Tower Cash Flow (TCF):

TCF = Gross Revenue – Expenses

Lease assets, on the other hand, are often expense-free, so valuation is based directly on rental income.

Typical 2026 ranges:

• Tower assets: 15x – 40x → cap rates of 6.6% to 2.5%
• Lease assets: 10x – 25x → cap rates of 10% to 4%

But here’s where it gets more nuanced: multiples alone don’t capture what makes a tower valuable. Factors like lease-up potential, tenant credit, structural capacity, and zoning protections can materially shift pricing. That’s why having a robust model is so important; it lets you move beyond rules of thumb and into real-world, scenario-based valuation.

WHAT BUYERS ARE LOOKING FOR IN 2026

As the tower market continues to mature, buyers in 2026 are approaching acquisitions with greater focus and discipline. While demand remains strong, premium valuations are being reserved for assets that check the right boxes, both structurally and contractually.

If you’re underwriting a tower for sale, acquisition, or hold strategy, here are the factors that matter most:

Tower Fundamentals

• Zoning protections that limit future tower construction nearby
• Lack of competing towers in the immediate coverage area
• Structural capacity to accommodate additional tenants or equipment
• Maintenance records and any FAA lighting requirements that may impact OpEx or compliance

Tenant Profile

• Strong anchor tenants such as AT&T, Verizon, or T-Mobile
• Broadband users (vs. narrowband or WISP tenants) with longer expected lifespans
• Well-structured leases with clear escalations, limited termination rights, and minimal sublease restrictions

Lease and Ground Rights

• Long lease terms or perpetual easements offering predictable control
• No revenue sharing obligations with landowners
• Landlord responsibility for expenses, including taxes and maintenance, clearly defined and limited

Portfolio Fit

• Geographic concentration that supports efficient management and operations
• Consistency in structural condition and documentation across sites
• Strategic alignment with the buyer’s thesis—whether that’s growth, lease-up, or stabilized yield

WHAT DRIVES VALUE? THE ART AND SCIENCE BEHIND TOWER MULTIPLES

When it comes to cell tower valuation, the multiple, or cap rate, is only the surface layer. Beneath it lies a series of interdependent factors that ultimately determine what a buyer is willing to pay today, and more importantly, what they believe the asset can deliver over time.

At its core, valuation multiples are shaped by two key dimensions:

1. The stability of current income
2. The potential for future revenue growth

Understanding both is essential to arriving at a defensible value.

Key Drivers of Valuation Multiples

• Tenant profile: Are the tenants financially secure? Are there risks of early termination or industry disruption?
• Tower age and lease-up history: Is the asset new with strong absorption potential, or seasoned with a flat income curve?
• Zoning protections: Do local regulations create barriers to entry, limiting future competition?
• Proximity to competing towers: Could tenants relocate to other nearby sites?
• Structural capacity: Can the tower support additional tenants or upgraded equipment?
• Available ground space: Is there physical room for tenant expansion?
• Location context: Rural towers often offer stronger zoning protection and less competition, while urban assets may be constrained by space but benefit from higher tenant demand.

A tower that checks most of these boxes, strong tenant, growth potential, zoning protection, might command a multiple in the 35x–40x range. Mature towers with limited upside and full tenancy typically trade lower, often in the 10x–20x range, depending on risk and income durability.

AVOID THE COMPARABLE TRAP

It’s tempting to value a tower by pointing to a recent comp:

“That one sold for 20x, so mine should too.”

But in telecom infrastructure, no two assets are identical, and trying to back into value using multiples alone can be misleading. Unlike traditional real estate, tower assets are shaped by engineering specs, spectrum access, tenant mix, lease mechanics, and regulatory overlays.

Public tower company transactions often involve bundled assets, long-term relationships, or embedded rights that don’t translate to individual or small-scale sales. Strategic premiums, shared infrastructure, or market-entry incentives often distort headline multiples.

This is where the Cell Tower Valuation Model adds value. Rather than relying on rules of thumb or market averages, the model gives you a bottom-up framework to underwrite the specific economics of each asset.

Ready to bring structure and confidence to your tower underwriting?

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DOWNLOAD THE CELL TOWER VALUATION MODEL

To make this model accessible to everyone, it is offered on a “Pay What You’re Able” basis with no minimum (enter $0 if you’d like) or maximum (your support helps keep the content coming – typical real estate acquisition models sell for $100 – $300+ per license). Just enter a price together with an email address to send the download link to, and then click ‘Continue’. If you have any questions about our “Pay What You’re Able” program or why we offer our models on this basis, please reach out to either Mike or Spencer.

We regularly update the model (see version notes). Paid contributors to the model receive a new download link via email each time the model is updated.

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OVERVIEW: CELL TOWER VALUATION MODEL

This investor-oriented, fully dynamic tool is purpose-built to underwrite, evaluate, and monitor cell tower acquisition opportunities. The model delivers a robust and transparent framework for projecting tower-level cash flows, structuring capital stacks, and evaluating returns under various scenarios.

Tailored for professionals acquiring stabilized or value-add tower assets, often with long-term lease contracts in place, the model provides the analytical depth required to assess income durability, estimate reversion values, and structure deals confidently. It supports a wide range of strategies, from core acquisitions to opportunistic purchases with a defined exit horizon.

The Cell Tower Acquisition Model emphasizes clarity and usability. The initial version includes a centralized Underwriting tab where all key inputs and assumptions are entered and outputs are reviewed, along with a Version Control tab for tracking model updates. Future enhancements are planned to further increase flexibility, scenario testing, and reporting features.

Your feedback is valuable, please reach out with suggestions for features or improvements that would enhance your workflow and decision-making.

WHAT’S UNDER THE HOOD – CELL TOWER VALUATION MODEL

Version Tab (Default View)

The version tab serves as the model’s homepage. It includes:

A detailed change log outlining updates in the latest release.

Helpful links to model tutorials, guides, and additional support materials.

Underwriting Tab (Primary Inputs – Default View)

The Underwriting tab serves as the model’s central command center for inputting and reviewing the assumptions that drive its outputs. It begins with a summary of key investment metrics at the top, followed by structured sections covering valuation, investment details, the development budget, capital stack, rental income, operating expenses, and reversion assumptions.

To ensure both clarity and efficiency, the layout is divided into seven core input sections, organized vertically from top to bottom. Users can scroll through the sections manually or use the ‘ONE-CLICK SECTION SHORTCUTS’ at the top of the tab to jump directly to the desired area.

The Underwriting tab is thoughtfully organized into intuitive sections that streamline both data entry and analysis. Below is a breakdown of each section:

• Key Investment Metrics: A concise summary of unlevered and levered performance indicators, including IRR, equity multiple, net profit, and net present value, along with key operating metrics.
• Valuation: Core valuation inputs, such as the TCF entry and exit multiples, which—when paired with projected tower cash flows—form the basis for calculating entry and exit valuations.
• Description: General information about the individual cell tower or asset.
• Investment: A full breakdown of the capital stack, covering equity, senior debt, mezzanine financing, interest rates, funding timelines, and draw schedules.
• Operating: Assumptions related to revenue, operating expenses (OpEx), and tower cash flow (TCF) before and after financing.
• Reversion (Sale): Exit assumptions including TCF multiples, implied cap rates, selling costs, and valuation logic based on projected cash flows.
• Returns: A summary of return outputs, featuring both levered and unlevered metrics such as IRR, equity multiple, net profit, net present value, and cash-on-cash return.

To enhance usability, all input cells are shown in blue font, while outputs and calculated fields appear in black font. This consistent color-coding approach is standard across all A.CRE models, making it easy to distinguish between editable inputs and automated results.

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Frequently Asked Questions about the Cell Tower Valuation Model

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Version Notes

beta v1.0

• Initial Release