Crown Castle CEO Says Investors Beginning to Appreciate REIT’s Growth Story

Ben Moreland, president and CEO of Crown Castle International Corp. (NYSE: CCI), joined REIT.com for a video interview during NAREIT’s 2015 Washington Leadership Forum.

Crown Castle, which became a REIT in January 2014, is the nation’s largest provider of shared wireless infrastructure. Moreland reflected on developments at Crown Castle during the past year.

“We’ve become a company that’s pretty well-known in the REIT community,” he observed, not least because of a significant increase in Crown Castle’s dividend. Today, the company is paying an annualized dividend of $3.28 a share, Moreland said, which is above the average yield of Equity REITs. Crown Castle currently yields 3.86 percent compared to 3.50 percent for the FTSE NAREIT All Equity REITs index.

Crown Castle has “a growth story that investors are really beginning to appreciate,” Moreland said.

He reiterated that over the next five years Crown Castle anticipates growing adjusted funds from operations (AFFO) per share and its dividend at a rate of about 6 percent to 7 percent annually.

“We have a very attractive current payout yield with contracted growth,” Moreland said, in addition to the growth inherent in the wireless infrastructure business. Crown Castle, he added, “provides a unique platform for folks to invest in wireless without picking a carrier or a particular technology.”

Moreland also expressed confidence that more traditional REIT investors are becoming comfortable with the Crown Castle story. He stressed that “it’s very easy” for investors to make the connection between the smartphone or tablet in their hands and the real estate of cell towers.

Looking abroad, Moreland discussed the possible sale of Crown Castle Australia, which accounts for about 4 percent of the company’s overall revenues.

“We’ve done extremely well in Australia. We really like the business, but it’s hard to argue that it’s strategic to our core focus,” he said.

Moreland said that the possible sale highlights the company’s continued focus on the U.S. market, where wireless carriers are spending more than $30 billion a year improving their networks. “We think it’s the most attractive market in the world,” Moreland said. “We have a long runway of growth in front of us and we’re really excited about that.”

Meanwhile, Moreland noted that assets acquired by Crown Castle in 2013 and 2014 are already beginning to contribute to growth. That growth is in excess of the company’s legacy towers, despite their higher occupancy levels. “Our basic business model is to buy towers where the occupancy is very low and then lease them up to other carriers in the market,” he explained.