In October, Lendlease Group established a joint venture with SoftBank Group to develop and own telecom infrastructure assets in the United States. Initially, the $400M joint venture plans on buying 8,000 towers and rooftop sites. Lendlease Towers, the JV’s name, will target $5B of telecom infrastructure assets over the medium term.
Joe Mullin: Everyone is watching that one. There is an interesting dynamic in the relationship between the three public tower companies and the carriers, AT&T and Verizon, in particular.
Ron Bizick: I have a hard time adding up 8,000 towers (only) of acquisitions independent of a US Cellular or Vertical Bridge sale, if they were on the market. And if they ever are, the competition from the likes of American Tower, SBA and Crown Castle International would be heavy. That is a formidable group, with deep pockets and competitive financing. The same would apply to a strategy of gobbling up all the small and mid-size tower companies. Lots of buyers, lots of money chasing and looking, not a lot of deals. And at the moment not a lot of Sellers.
Tony Peduto: The carriers are clearly pushing back. They want to reserve space on the tower for very low rates and be able to add up to certain loading level without incurring any additional charges. I have seen deals come through where a carrier has asked for no fees for applications, no fees for modification drawings. The question is how much it will impact the big three tower companies. It will be difficult to sync up the lease expiration dates of AT&T and Verizon.