Cell towers have entered a new era of opportunity

Tower REITs are entering a fundamental recovery, with fading one-off headwinds, rising data demand and a potential SpaceX terrestrial network creating scope for both cash-flow growth and valuation re-rating.

• Tower REITs fell 10.6% year to date through September 30, 2026, then gained 18.6% in October through October 23, returning their year-to-date performance to positive territory.
• Cohen & Steers forecasts tower cash-flow growth of nearly 5% in 2027 and more than 6% in 2028 as Sprint consolidation, DISH lease cancellations, asset sales and refinancing pressures fade.
• No remaining tenant outside the three national carriers accounts for more than 1% of U.S. tower revenue, reducing the risk of another cancellation cycle comparable to Sprint and DISH.
• The firm views satellites and towers as complementary: satellites extend coverage in remote areas, while towers provide dense, high-capacity coverage for indoor service and data-intensive applications.
• Cohen & Steers estimates that a sizable SpaceX terrestrial network could add approximately 100–200 basis points to current net organic revenue growth over several years, while a 5.2% one-day gain in tower REITs on October 23 showed the market's reaction to the possibility.
• Tower valuations remain below the broader REIT market, at a 4.1x price-to-cash-flow discount versus a 6.6x premium in 2020, leaving room for earnings-driven returns and a re-rating.

Takeaway: Investors may benefit from recovering tower cash flows and a valuation gap that could narrow, while the SpaceX network and renewed carrier spending are additional upside scenarios rather than requirements for the core recovery thesis.