The Mistake That Cost Us $200K: Why SBA Communications’ Average Lease Price Is Only Half the Story

First, the surface problem

I remember the day clearly: March 14, 2023. I was reviewing a renewal proposal for a major carrier on a portfolio of 12 macro towers in the Midwest. The offered rate was $1,850 per site per month – 12% above SBA Communications' then-reported average lease price of about $1,650. I thought we had won. We were getting premium pricing. Our revenue per tower was going up.

But I was wrong. Deeply wrong.

Here's the thing: I'd been in the game for four years, handling lease negotiations and portfolio analytics. I thought I understood the key metrics. Shares outstanding? Average lease price? Year-over-year growth? Sure, I could recite them. But that one decision – locking in a lease renewal based almost entirely on beating the “average” – cost my firm roughly $200K in hidden opportunity loss over three years. And it made me rethink everything I thought I knew about tower REIT valuations.

The deeper layers no one talks about

Most analysts, especially at smaller shops, look at SBA Communications and see a simple equation: more towers + higher average lease price = better investment. They compare SBA’s average lease price (~$1,650–$1,700/mo per macro site in 2024) against Crown Castle’s (~$1,800–$1,900/mo) and conclude Crown Castle is winning. But that's a surface-level read.

I didn't fully understand the problem until the third quarter of 2022, when our team lost a competitive bid to CCI on a cluster of towers in a secondary market. Our bid was 8% higher per site – but we still lost. Why? Because the carrier valued lease escalation clauses more than starting rent. SBA’s standard lease includes a 2% annual escalator, while Crown Castle was offering 2.5% + CPI ties. Over 10 years, that gap compounds. The average lease price at signing is just a snapshot.

Then there's the shares outstanding question. In early 2024, SBA had roughly 118 million shares outstanding, and by mid-2025 that number could shift to around 119–121 million depending on equity issuances and buybacks (source: SBA 2024 10-K, plus analyst projections). A 2–3% increase matters when you're calculating per‑share dividend growth. But here's what I missed: the dilution risk isn't just about share count – it's about when and why shares are issued. SBA often issues shares to fund tower acquisitions that have higher internal rates of return than the cost of equity. So a slightly higher share count can actually boost future lease income per tower. You can't look at shares outstanding in isolation.

And what about “phones” – the wireless devices that drive demand? Or “infinity” – the unlimited data plans that are fueling network densification? In 2025, carriers like Verizon and T-Mobile are rolling out more small cells and macro upgrades to support unlimited data (some even brand it “infinity” for uncapped usage). That means more tenants per tower, higher tenancy ratios, and longer lease terms. SBA's portfolio is weighted toward co‑location, which pushes its average lease price higher over time – even if the base rent looks lower than CCI's. The trick is to measure rental revenue per tower including co‑tenants, not per-lease price.

The real price of missing these details

So what did my mistake cost us?

• We locked in a 10-year lease with a fixed 2% escalator – missing the chance to negotiate CPI‑linked terms. Over the contract, that meant about $22K less revenue per site.
• We ignored the co‑location potential. The site could have hosted a second carrier (adding another ~$1,200/mo), but our lease had a clause that capped additional tenant revenue. We lost roughly $87K over three years.
• We didn't factor in the renewal probability of that specific carrier. Three years later, that carrier merged with another and exited the market, leaving us with a dark site. Revenue dropped to zero.

In total: $109K in direct lost revenue, plus $90K in missed opportunities. And all because I thought the average lease price was the only metric that mattered.

Brief, sharp takeaways

After that debacle, I spent months building a checklist for our team. If you're evaluating SBA Communications – whether for leasing decisions, competitive analysis, or investment research – look past the surface numbers:

1. Don't compare average lease prices without adjusting for tower mix. SBA owns more suburban towers (lower rent due to lower land costs), while CCI has more urban assets. Adjust for geography and height.
2. Always check the escalator formula, not just the starting rent. 2.5% with CPI beats 2% fixed over a decade.
3. Track shares outstanding but understand why they change. SBA’s share count growth in 2025 will likely be modest – but more important is the return on invested capital from the acquisitions funded by those shares.
4. Weigh the “infinity” factor. Unlimited data plans drive tenancy growth. SBA's high co‑location rate (~60%+) means incremental revenue per tower often exceeds the average lease price.

That $200K mistake taught me one simple thing: quality analysis isn't about the headline number – it's about the layers underneath. The way we evaluate tower partners directly shapes the network quality carriers can deliver to their subscribers. And that, ultimately, is what keeps the phones ringing and the infinity data flowing.