Last Monday, Verizon and Vertical Bridge agreed to a $3.3 billion deal, granting VB exclusive rights to lease, operate, and manage 6,339 wireless towers across all 50 states. Surprisingly, VB outbid the three major tower companies, though the timing favored VB—I doubted they would win this portfolio if the deal occurred later. After Verizon’s $20 billion acquisition of Frontier, this move helps reduce the need to raise more capital. I initially thought Crown Castle would be the best fit, especially if they had sold their fiber and small-cell business, which is valued between $8-10 billion. The proceeds from that sale could have been used to buy Verizon’s towers. However, Crown Castle will have to wait for the next opportunity which won’t be far away.

Verizon had signaled months ago that their towers were for sale, giving all major tower companies time to assess the opportunity. Some in the industry may call it an overpayment, but there have been many such deals in the past. This portfolio is critical to Verizon’s network, making it a valuable acquisition. There’s likely to be interest from T-Mobile and AT&T, and it would be interesting to know the average tenant per tower before the deal closes.

This transaction mirrors deals from the mid-2010s by Crown Castle (with AT&T and T-Mobile) and American Tower (with Verizon). The carriers typically benefit from low, fixed rent (e.g., $1,900/month with a 2% annual increase), which is especially appealing as tenant rents rise. Verizon seems to prefer working with Vertical Bridge, given their build-to-suit joint venture, making the relationship another key factor in this decision beyond just the financials. However, don’t think the money didn’t matter.

So, what does all this mean for property owners?

Property owners should be aware of when their ground leases expire and who is currently on the tower. If a tower has only Verizon as a tenant, there’s a 50/50 chance Vertical Bridge (VB) will add another tenant, increasing the tower’s value. If your lease has 8-20 years remaining, it might be wise to wait and see what marketing efforts VB undertakes. Adding another tenant can significantly boost the value of the ground lease.

During my time at American Tower, we acquired 11,500 Verizon towers for managing and subleasing, with the goal of adding one tenant per tower. Though ambitious, this goal wasn’t fully met. Vertical Bridge likely needs to add more tenants to justify their purchase price, much like American Tower when they acquired Verizon’s towers.

Once the VB transaction is finalized, property owners involved will receive notification of the acquisition. Many leases likely expire within 15 years, as they were originally set for 25-30 years. Typically, carriers extend leases 2-3 years before expiration, while tower companies may extend leases up to 20 years in advance. VB will likely target Verizon property owners for lease extensions or buyouts after the transaction is complete. I’ve had a handful of Verizon property owners already reach out to me based on their situation.

At American Tower, we offered property owners signing bonuses between $2,500 and $10,000 to extend leases, depending on whether another carrier was on the tower. Though that was nearly a decade ago, the strategy remains relevant. With so many sites approaching expiration, VB will need to act quickly. They’ll work closely with Verizon property owners to secure leases, but if negotiations stall, Verizon may have the option to take over the negotiation. I managed this relationship at American Tower and understand the pressure tower companies face in these situations. We had hundreds of towers expiring within five years of final lease expiration.

For property owners with leases expiring in 2-3 years, there’s potential for a strong deal due to the urgency of securing the lease. If I were a property owner, I’d reassess the value of my site now that additional carriers may be added. A revenue-sharing clause could provide peace of mind. Having expert guidance is crucial, as mistakes can cost future value worth $100,000 or more.

If you own a Verizon-leased property that will pass to VB here in the future, it’s essential to understand your options. VB will be eager to add tenants, increasing your ground lease’s worth. Don’t settle for a small signing bonus, as it may limit future negotiations. This is where JP Tower Consulting can assist, helping you maximize the value of your ground lease.