American Tower Corporation 2019 Q1 Review

By Nick G. Foster
May 22, 2019

American Tower Corporation had their quarterly earnings call on May 3, 2019. We reviewed their 10-K filing submitted to the SEC and their slide deck published with their 2019 Q1 earnings call. Below are our findings.

American Tower Corporation (NYSE: AMT) is the largest global cell tower REIT with assets in many countries such as the United States, Brazil, Argentina, Mexico, Kenya, and South Africa.

  • In general, a tenant lease (such as with AT&T, Verizon, etc.) will have an initial non-cancellable term of ten (10) years with multiple renewal terms.
  • Typical rent escalation with tenants are 3% annual.
  • Historically, losing sites in their portfolio (churn) averages 1% to 2% per year.
  • 52% of their property segment revenue is from US based towers.
  • AMT’s US based revenue from the four top tenants was AT&T (19%), Verizon (15%), T-Mobile (9%) and Sprint (8%).
  • AMT owns approximately 25,000 towers in the US and operates an additional approximately 16,000 towers.
  • AMT maintains a gross profit margin of 85% on their cell towers.

The above information will help you understand who you are negotiating with, when negotiating with American Tower Corporation. It also shows you that a common mistake landlords are making is leaving money on the table allowing American Tower Corporation to secure a 85% profit margin on their land.

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