Subject:  (DePippo) $$$Tower power$$$.... (fwd)
Date:     Sat, 13 Mar 1999 085934 -0600 (CST)
From:     "Roy L. Beavers" <rbeavers@llion.org>
To:       emfguru <rbeavers@llion.org>
--------------------------------------------------


......This explains a lot!!!!......  As Peter observes, the health
hazard issue is not even "at the table.".......

Roy Beavers (EMFguru)
rbeavers@llion.org................
...It is better to light a single candle than to curse the darkness... 
.................PEOPLE ARE MORE IMPORTANT THAN PROFITS...............

......DOYOU KNOW OF OTHERS WHO SHOULD BE ON THIS LIST?????............

---------- Forwarded message ----------
Date: Sat, 13 Mar 1999 09:53:16 EST
From: PDepippo@aol.com
To: rbeavers@llion.org
Subject: Tower power

Roy,

Here's and article from Fortune concerning cell towers.  Obviously, they
don't mention a word about EMR or opposition by concerned citizens.

Peter



"Bandwidth may be infinite, but land is not. Here's the latest play in the
wireless game." 

Tower power 

By Michelle Conlin 

REAL ESTATE STOCKS are in the dumps. From operators of trailer parks to
collections of Class A office space, the shares of real estate companies are
down 26% from September. 

But one obscure corner of the real estate business, one that's only a few
years old, is in a bull market: wireless towers. This bane of every
neighborhood zoning czar is emerging as the hot new play. Shares of the two
top publicly traded companies (see table) that own towers are up an average
52% since September. 

Six wireless carriers now compete in most of the top 15 U.S. markets. It's a
buyer's market. But the supply of choice transmission sites is short. With at
least 92 million dropped or interrupted calls every month, demand for better
wireless coverage is intense. There are now about 65,000 towers in the U.S.
Carriers will need 35,000 more by 2004. 

Demand for good sites is so intense that Samuel Zell's Chicago-based Equity
Office Properties has seen rents for its rooftops double since 1996, to more
than $1,600. In contrast, rents for the new office space below are only up
25%. 

Steven Dodge sees the value in such vertical real estate. In 1995 the former
lending officer at BankBoston took his American Radio Corp. public at $16.50 a
share, then sold the company's 100 radio stations to CBS three years later in
a deal worth $2.6 billion. For each American Radio share, Dodge's original
investors got $44 in cash and one share, worth $21, of a newly created public
company, American Tower. 

With this new Boston-based company, Dodge kept control of the towers the
stations used, figuring—correctly—that he would have no problem renting
antenna space on the towers to cellular phone operators. Shares now trade at
$25. American Tower has 3,200 towers, more than any firm in the U.S., and it
is buying and building rapidly. Dodge aims to have 10,000 by 2003. 

Carriers are only too happy to sell these vertical eyesores to entrepreneurs
like Dodge—and get the debt used to finance them off their balance sheets.
Carriers also don't want competitors sharing their tower space. A third party
can more easily rent to multiple tenants. 

Bell Atlantic was the first to throw in the towel. In December it sold off its
1,427 towers to a joint venture with Crown Castle International Corp. Bell
Atlantic got $380 million in cash and a 37.7% equity stake in the joint
venture, worth $240 million. 

Two months later Nextel followed suit by selling its 2,000 towers to privately
held SpectraSite for $560 million in cash plus a 17% equity stake in the
company, worth $70 million. 

Where's all this cash coming from? Mostly debt. A lot of the tower outfits
have debt loads of 65% of capital or more. Carrying costs are high. None of
the firms is making a profit yet. 

But the potential is certainly there. Towers positioned on the ground cost
about $200,000 to build. Operating costs hover around $10,000 a year no matter
if there's one tenant or ten. Rents run from $2,200 a month per tenant for a
city like Boston down to $500 in a rural area. 

American Tower's Dodge gets an average of 4.5 tenants on each of his towers in
Florida. In a city, of course, he has to pay rooftop rent to a Sam Zell.
Still, Dodge says that in some areas he's seeing a 40% cash-on-cash return,
meaning that if he spends $200,000 on a site he will pocket $80,000-a-year
over and above the minimal operating costs. 

Build a hotel and you have to fluff the pillows every day. "With a tower, all
you have to do is put down the weed killer and mow the grass," says
SpectraSite's chief executive, Stephen Clark. 

Clark not only plans to increase the number of cellular tenants on the former
Nextel towers, but he also won the rights to build 1,700 more towers for
Nextel over the next five years. 

Expect more deals like these. Already rural affiliates of AT&T and Sprint are
using the tower companies to do the building and managing for them. 

Someday there will be a glut of wireless towers. But that's a few years off. 





Archive provided courtesy of WaveGuide, http://www.wave-guide.org
Reprinted with permission of Roy Beavers, http://www.feb.se/EMF-L/EMF-L.html