Specialty REITs

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CCI

AMT

Short on REITs but worried about tenants? Consider this specialty
(05 May 2020) Real estate investment trusts (REITs) can offer a dynamic range of investment options, but investors can get burned if they don't do their homework. For example, retail REITs who own B- and C-level malls were getting hammered leading into the pandemic; now they are getting crushed. Office space REITs must contend with tenants not paying their monthly leases or going out of business during the lockdown. There is one niche specialty in the REIT world, however, that many investors fail to consider: cell tower owners. Take $67 billion REIT Crown Castle International (CCI $114-$158-$169), for example. The company owns and leases roughly 40,000 cell towers in the United States: cell towers which will be rife with 5G antennas over the coming few years. Did we mention that the company also owns over 80,000 route miles of fiber-optic cables? The kind of high-speed lines which allow hundreds of millions of Americans to attend classes online and take part in Zoom (ZM) videoconferencing calls. With its p/e ratio of 80, CCI may seem expensive, but its 11.33% YTD performance has put the major indices to shame, and we expect the company's rock-solid growth to continue into the future. Looking for a cell tower REIT with a lower multiple? Consider American Tower Corp (AMT $240) with its 57 multiple. These real estate entities will play a major role in America's 5G build-out.

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