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Crown Castle Mulling to Build 420,000 SF Facility in Houston

Zacks Equity Research

Going by a Houston Business Journal article that stated public documents, Crown Castle International Corp. CCI is expected to build a new 420,000-square-foot facility, along Interstate 10, west of the 610 Loop.

In fact, according to records with the Harris County Appraisal District and the Harris County Clerk's Office, the communications tower provider acquired the land at 8020 Katy Freeway from Prologis Inc. PLD last July.

The company plans to construct a 13-story office building with an estimated cost of $55 million, per document registered with the Texas Department of Licensing and Regulation on Apr 1. Further, construction is slated to commence on Aug 15 and is scheduled for completion on Jan 11, 2021.

Nonetheless, the company has not disclosed the purpose of the property once construction is complete. At present, the space is occupied as a warehouse property by a Houston-based furniture dealer — Debner. According to HCAD, the property was appraised at more than $6.9 million.

The acquisition will strengthen the company’s position in the Houston region. In fact, Crown Castle is shifting its focus from tower assets to become a fiber provider with greater emphasis on the small-cell opportunity. In line with this, the company is acquiring several fiber operators and deploying small cells in its assets. It witnessed the highest small-cell deployment in 2018 and expects to install another 10,000-15,000 nodes in the current year. These efforts will strengthen Crown Castle’s position as one of the largest fiber network operators in the United States.

Such moves are a strategic fit for the company amid favorable industry fundamentals. Specifically, the deployment of 5G will likely drive growth on the company’s tower and small-cell assets as wireless carriers are increasing investments to enhance their networks to provide the coverage, capacity and speed needed to support mobile video, Internet of Things (IoT) and fixed wireless broadband. Moreover, wireless data consumption is anticipated to shoot up considerably over the next several years, driven by increased innovation and adoption of data-driven mobile devices, and applications such as machine-to-machine (M2M) connections, social networking and streaming of video. Hence, with an extensive portfolio of towers and small cells, the company is well equipped with the network density required to meet such demands.

This Zacks Rank #2 (Buy) stock has gained around 22.2% over the past three months, outperforming 14.6% growth recorded by the industry.




Other Stocks to Consider

Investors can consider other similarly-ranked stocks from the same space like Terreno Realty Corporation TRNO and Cousins Properties Incorporated CUZ. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Terreno Realty’s funds from operations (FFO) per share estimates for 2019 remained unchanged at $1.42, in the past month. In addition, it has a long-term growth rate of 8.40%.

Cousins Properties’ Zacks Consensus Estimate for first-quarter 2019 FFO per share has been revised marginally upward to 20 cents in the past two months. Also, it has a long-term growth rate of 3.50%.

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