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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About Nick G. Foster
Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).