I’ve spent over three decades investing in commercial real estate (“CRE”) in some form or another. So, I’ve seen a whole lot of change.
I’ve witnessed CRE booms and busts as a developer. And as an analyst, I’ve seen real estate investment trusts (“REITs”) expand into one new sector after another.
The short list includes:
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Life-science properties in 1994
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Telecommunication towers in 1999
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Data centers in 2004
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Single-family rentals in 2012
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Farmland and casinos in 2013
There’s plenty more room to run, though. We could still see railroad REITs, theme-park REITs, and even jet-hanger REITs before long. I’ve been saying that for quite some time.
What I’ve only wised up to recently, however, is that we could see space-based REITs as well.
Why not, when both private companies and governments around the world are advancing their galaxy-exploring capabilities?
We all saw the success of NASA’s Artemis II mission this month. Launching on April 1, the spacecraft went on to successfully orbit the moon, then splash back to Earth on April 10.
Its stated intent was to prepare for Artemis III, which would land on the moon in the next year or two – marking the first time human beings have done so in over half a century.
The larger program is just one more step toward turning outer space into a vast economic structure, not just a place to explore.
Launchpads, satellites, lunar land zones, asteroids for mining – these are the land parcels of the future. And we’re hurtling toward that future thanks to both private and governmental efforts around the world.
So, what would a space REIT actually mean?
A Beautiful, High-Tech Blend
I know there’s been recent speculation about space-exploring efforts eventually replacing land-based property types outright.
Take Elon Musk’s SpaceX and Starlink. The company has already deployed an array of satellites around the planet, with plans to launch thousands more.
I wrote about the data-center side of the equation in early February. “Put very simply,” I noted, “Musk sees hurdles for building new AI computing capacity here on Earth. So, he’s looking to space.”
However:
Even if Musk were to achieve his vision for space data centers, this impressive global cloud ecosystem would still need land-based data centers to route to Amazon Web Services (AWS), Microsoft Azure hubs, Google Cloud campuses, and [REIT]-owned data-center facilities.
That’s why I’m not concerned about how data centers like Digital Realty (DLR) and Equinix (EQIX) hold up from here. Musk knows he needs a network of Earth and “sky” assets to make his ambitions a reality.
As most of my readers know, I recommended these two data-center REITs – as well as Iron Mountain (IRM) – last year, with shares soaring by an average 32% year to date.
This same reasoning applies to cell towers as well, which I also covered in January. Most investors think of them as being a separate asset class from data centers. But they’re really two halves of the same infrastructure equation, considering how:
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Your wireless device connects to a cell tower.
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The cell tower connects to a data center.
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Everything you do on that device – streaming videos, sending messages, running apps, asking AI questions – travels the resulting path in milliseconds to make your request a reality.
One without the other is incomplete infrastructure. And both asset classes are driven by the same secular force: the exponential growth of data.
When data consumption grows – and it has, compounding at roughly 30% annually for the past decade with no sign of slowing – both asset classes benefit simultaneously.
SBAC Goes Up for Sale
There are three cell-tower REITs: American Tower (AMT), Crown Castle (CCI), and SBA Communications (SBAC). Together, they have a market capitalization of $145 billion, with American Tower boasting $84.47 billion and SBA coming in a far third at $23.35 billion.
Yet it’s that smaller REIT that’s making big news this month.
Bloomberg recently reported that SBA Communications is exploring a potential sale after receiving preliminary takeover interest from large infrastructure funds. The company is working with financial advisers, and discussions have reportedly been underway since late 2025.
TMT Finance named both KKR (KKR) and Brookfield Asset Management (BAM) as interested parties. Though it remains unclear whether they would bid jointly or separately.
Regardless, SBAC surged 18.93% on April 3 to $204.04… then climbed an additional 5.7% on TMT’s reports. As of April 13, shares were trading near $220.34.
The appeal here is clear: Cell towers are a growing necessity in our increasingly technology-driven world. And SBA has plenty of them. It operates roughly 46,000 towers globally, with 17,464 in the U.S. and 22,285 internationally across 13 markets in South America, Central America, Canada, and Africa.
If it goes private, that will leave only two real public towers left. So, I imagine more capital will flow into both AMT and CCI automatically.
Both stocks are worth considering, but I do like the former’s prospects better. That’s because American Tower owns 26 data centers on top of its massive network of cellular sites.
As such, it can give one-stop shopping to many of its wireless tenants – which often need interconnection and colocation space as they build out their 5G core networks.
AMT is now trading at 16.8 times price to adjusted funds from operations (P/AFFO). That’s below both CCI at 19.8 times and SBAC at 17.4 times. And its dividend yield is 3.8%, with a payout ratio of 66% based on AFFO per share.
Given the current setup, we forecast AMT shares could return around 20% over the next 12 months. That’s partially based on the fact that data-center REITs are trading at an average of 25 times… and you’re essentially getting a collection of data centers for free.
Source: FAST Graphs
It will be interesting to see what happens to the cell-tower sector REIT from here. But this I can practically guarantee: It’s not going anywhere anytime soon.
Not even as the larger tech world shoots for the literal moon.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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