Will 2015 be the year of the REIT for phone companies, including perhaps Verizon and AT&T? Converting to a real estate investment trust provides tax benefits on earnings. Most REITs own office buildings and shopping centers, but companies in other industries have sought REIT status to lower tax bills. Conversion to a REIT requires IRS approval. Within the telecom industry, cellphone tower operators American Tower (AMT) and Crown Castle
American Tower (AMT) could buy Verizon’s cellphone towers, but at a lower price than some analysts have speculated, says a Citigroup report. AT&T (T) last year sold rights to 9,700 cellphone towers to Crown Castle International (CCI) for $4.85 billion in cash. Crown Castle bought 600 towers outright and leased 9,100 other towers under a long-term deal. Crown Castle has the option of purchasing the 9,100 towers for $4.2 billion. Verizon (VZ)
Morgan Stanley downgraded the telecom sector on Wednesday to “cautious,” citing concern over “competition, valuation and regulation.” The downgrades included cellphone tower company American Tower (AMT). “In conjunction with the downgrade of our telecom industry view to cautious, we are downgrading American Tower to equal-weight due to fair valuation, and overhangs related to international expansion,” wrote Simon Flannery, a Morgan Stanley