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REIT Spotlight: Crown Castle, Simon Property

Dave Royse

One real estate investment trust with a bullish growth outlook in cell tower infrastructure may have been marred by disclosure of an SEC probe, and the other is getting attention with a big drop in price.

Crown Castle IN/SH (NYSE: CCI) was boosted by its own results and a strong outlook for the cell tower landscape, offset by an SEC subpoena.

Simon Property Group Inc (NYSE: SPG), the nation’s largest shopping mall operator, saw big price movement in its shares early in the month, but the reasons were less clear.

Crown Castle

The REIT, which provides cell towers, rooftop towers and other wireless infrastructure, reported strong results Oct. 16, with net third-quarter income of $272 million, up from $164 million in the quarter a year ago.

Business looks good, with an expected boom in tower leasing as customers build out 5G mobile infrastructure and the CEO stating that the company is seeing the highest tower leasing activity in more than a decade.

SEC Probe

But there was also negative news, with Crown Castle disclosing in a regulatory filing that the Securities and Exchange Commission in September requested documents going back to 2015 related to “the company's long-standing capitalization and expense policies for tenant upgrades and installations in its services business.”

Crown Castle officials said it is cooperating and believes its policies are appropriate.

Crown Castle CEO Jay Brown’s bullishness appeared to be winning the day with investors: the REIT’s stock was up more than 3% Friday. 

“We expect the elevated level of tower leasing to continue into next year,” Brown said on Crown Castle's third-quarter call. “As 5G becomes a reality and wireless networks expand from connecting everyone to connecting everything, we believe new use cases will develop that will generate significant long-term demand for our infrastructure, with towers remaining at the core of the wireless network.”

See Also: Green Growth Brands To Open CBD Shops In Simon Property Group Malls

Simon Property

What’s driving trending interest in Simon Property Group is less clear, with the REIT making little news.

Its share price rose through this past week after a huge drop at the end of September that continued into early October.

The stock hit a 52-week low Oct. 9 at $145.34, after trading above $157 in late September following a Sept. 23 Citi downgrade. It's possible the suddenly lower price was drawing the interest.

Earlier this month, the Indianapolis-based company made an interesting announcement for a brick-and-mortar mainstay: it is partnering with Rue Gilt Groupe in the e-commerce discount shopping site ShopPremiumOutlets.com, building on its outlet mall brand. CEO David Simon said online value shopping is a big opportunity for the company.

Crown Castle shares were down 0.96% on Friday at $142.67 at the time of publication Monday. Simon Property was up 1.78% at $152.59.

Related Link: This Real Estate ETF Can Keep Serving Up Upside

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