Cell tower owners have been among the fastest-growing companies in the real estate investment trust sector, as consumers use more data through mobile phones and tablets than ever before. With carriers and the federal government poised to make more investments as 5G networks begin to roll out this year, the value of these towers is expected to rise, WSJ reported. The promise of self-driving cars offers additional upside in the future.
- Why it matters: Owners of cell towers lease space to wireless carriers like AT&T and T-Mobile, so they can broadcast and pick up signals from cellphones and other devices. Many of these towers were built by the carriers themselves decades ago and were then sold to these REITs on a sale-leaseback basis.
- Be Smart: The three cell-tower companies have become among the biggest in the REIT sector – larger than even the biggest office or apartment REITs by market capitalization. Over the past three years, Crown Castle’s share price rose about 80 percent, while the shares of American Tower and SBA have doubled in price. By comparison, the FTSE Nareit All REITs Index gained 23 percent over that period, WSJ noted.