Last week Crown Castle filed their 8-K filing with the SEC. To save you time from reading the 69 page document, here are what we believe are key takeaways for landlords.
As of December 31, 2018, Crown Castle reported the following:
- Crown Castle has 40,039 cell towers.
- Crown Castles leases land for 29,800 of their cell towers, 74% of their portfolio. Of those leases 17,552, or 44% of the leases expire in greater than 20 years, 6,997 or 17% expire between 10-20 years, and 5,251 expire in less than 10 years.
- Crown Castle has on average 2.2 tenants per tower.
- More specifically, for cell towers constructed or acquired prior to 2006, 29% of cell towers in their portfolio have less than 2 tenants, 25% have two tenants, 20% 3 tenants, 14% four tenants, 7% five tenants, and only 5% of their portfolio has greater than 5 tenants.
- For cell towers constructed or acquired 2007 to present, the numbers increase to 48% less than 2 tenants, 26% 2 tenants, 14% 3 tenants, 7% 4 tenants, 3% 5 tenants and 2% greater than 5 tenants.
- Average remaining lease term for a tenant on a Crown Castle tower is 6 years. Excludes renewal terms at customer’s option.
- Crown Castle owns the leases under 10,239 of their cell towers, 26% of their portfolio.
- Crown Castle extended 1,841 leases for an average of 43 years, for 12 months ending December 31, 2018.
- Crown Castle purchased 277 ground leases under Crown Castle towers for approximately $81,000,000.00, for 12 months ending December 31, 2018.
- The highest percentage of Crown Castles portfolio by state is 11% in California and 11% in Texas. The remaining states make up the remaining 78% of Crown Castle’s portfolio.
- The highest percentage of Crown Castle’s tenant base are companies other than AT&T, Verizon, Sprint, or T-Mobile, comprising of 27% of Crown Castle’s tower revenues, followed by AT&T at 22%, T-Mobile at 20%, Verizon at 18%, and Sprint at 13%.
The above information will help you understand who you are negotiating with, when negotiating with Crown Castle. It also shows you that a common mistake landlords are making is renewing their land lease agreements with Crown Castle for an average of 43 years, when Crown Castle’s average tenant lease is 6 years. By renewing for such a long period of time, the landlord has removed their ability to renegotiate a higher rental rate with Crown Castle for decades to come.
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