Darin Turner, managing director and chief investment officer for Invesco’s listed real assets team, was a guest on the latest edition of the Nareit REIT Report podcast.
Turner discussed the scope and growth of the tower REIT industry, its performance history, how the leasing structure works, the impact of 5G, global opportunities and challenges, benefits for the sector from AI and edge computing, and more.
Key Takeaways from the interview include:
- There are approximately 420,000 macro tower and small cell sites across the United States, with REITs owing about 90% of the approximately 150,000 macro tower sites.
- There hasn’t been any significant new development of macro tower sites in the last decade. New supply is “incredibly limited.”
- Most of the recent growth for tower REITs has been in international markets, in both emerging and developed markets.
- Over the past decade, tower REITs have been one of the best performing sectors in listed real estate.
- Tower REITs generally have about a 1% economic sensitivity to GDP, one of the lowest correlations in the listed real estate space.
- Tower REITs collect a service fee in connection to the replacement of carrier antennas, meaning that the transition to 5G an important factor in supporting underlying cash flow.
- AI and edge computing are additional revenue streams for the sector looking forward.