VSAT - Cell Tower REITs: For 5G 4 Beats 3

• After uncharacteristically lagging for most of the year, Cell Tower REITs have been the best-performing property sector over the past quarter, benefiting from favorable macro shifts and positive industry-specific catalysts.
• One of the most “recession-resistant” property sectors, strong earnings results highlighted the underappreciated inflation-hedging characteristics of cell tower REITs as international lease escalators are typically linked with local CPI.
• DISH Network commercially launched its 5G network, becoming the fourth national wireless carrier alongside AT&T, Verizon, and T-Mobile. Tower leasing demand suggests that DISH intends to be a viable player.
• Given the industry skepticism over DISH’s viability, any level of success is incremental for tower REITs. We foresee DISH partnering with a major technology firm - possibly a Low Earth Orbit satellite provider - to create a competitive connectivity offering.
• We continue to monitor - and be impressed by - the pace of Low Earth Orbit satellite service deployment, led by Starlink and OneWeb. While there is some risk of disintermediation to towers if the mobility of satellite connections improves, we see a higher likelihood that LEO networks will be “customers” rather than “competitors” to tower REITs.

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