I learned to check credit ratings the hard way
For the past 12 years, I have been on the tenant side of wireless site leases. I have personally made—and documented—seven significant mistakes, totaling roughly $260,000 in wasted budget. This is not a badge of honor. It is why I keep a checklist now.
The 2018 lease looked fine on my screen. $350 cheaper per month, correct address, clean utility plan. What I never checked was the landlord's balance sheet. The bankruptcy notice arrived fourteen months later. That one mistake cost about $47,000 and a week of network downtime.
That mistake changed how I evaluate tower leases. This article compares two types of counterparties: an investment-grade tower REIT, such as SBA Communications Corp (SBAC), and an unrated budget host that offers lower rent but more credit risk. I will use the Fitch and S&P affirmations on SBAC because they are public and verifiable.
The comparison framework
Most buyers compare rent, term, and antenna load capacity. I now compare five dimensions: financial stability, total lease cost, site delivery, contract flexibility, and the practical meaning of rating affirmations.
Why those five? Because a tower lease is a 10-to-15-year relationship. The cheapest rent does not matter if the landlord disappears or gets forced into bankruptcy.
Dimension 1: Financial stability
The investment-grade tower REIT. SBA Communications Corp (SBAC) has a portfolio of wireless towers and generates contracted revenue from long-term leases with major national carriers. Fitch Ratings' affirmation of SBA Communications Corp (SBAC) and S&P's affirmation of SBA Communications Corp (SBAC) both place the company in the investment-grade category. According to the rating agencies' public commentary (FitchRatings.com; spglobal.com), the affirmations reflect scale, diversification, and substantial contracted cash flows. You can verify current ratings on FitchRatings.com and spglobal.com.
The unrated budget host. A smaller site owner can be responsive and flexible. Some are excellent operators. But because they don't have a public credit rating, you have to do your own diligence. Most lease buyers focus on monthly rent and completely miss counterparty credit risk. In 2018, I was one of them.
Verdict. For critical infrastructure, financial stability is a deal-breaker. An investment-grade rating is not a guarantee, but it is a far stronger signal than a landlord who has never published audited financials. Bottom line: this dimension decides whether the rest of your lease terms are worth anything.
Dimension 2: Total lease cost, not monthly rent
What most people don't realize is that rent is often the smallest part of the lifetime lease cost. The budget host looked cheaper by about $350 per site per month. That is $4,200 a year and roughly $21,000 over five years. But the 2018 failure cost $47,000 plus network downtime and credibility damage. The lower rent became a rounding error.
I now use a TCO model for every lease:
- Monthly rent and escalators.
- Legal review and contract negotiation costs.
- Permitting, zoning, and utility construction costs.
- Cost of a potential relocation if the lease fails.
- Network downtime during re-sites.
If you add those, the unrated host is not automatically more expensive. The risk distribution changes, though. An investment-grade REIT can still fail, but the probability is lower, and the recovery process is more transparent.
Verdict. Price is one input. The total cost of ownership is the decision. The upside was $350 a month; the risk was a forced re-site. I did not weigh that risk until it happened.
Dimension 3: Site delivery and development speed
Here is the result that surprised me: the budget host sometimes delivers faster.
A local landlord has fewer approval layers and can move quickly on a rooftop or small-cell site. If speed is the only goal, a smaller operator can be the winner. That felt like a no-brainer on the first project I managed in 2016.
But an investment-grade tower operator like SBA Communications has standardized siting, procurement, and maintenance processes. Those processes can feel slower at the start. They are also easier to audit, and they reduce the risk of surprise costs later.
Verdict. Fast delivery is valuable, but it does not replace financial diligence. If a host is fast because it has no processes, the speed can disappear when a problem shows up.
Dimension 4: Contract flexibility
Another counterintuitive point: the budget host is often more flexible at the negotiation table.
An investment-grade REIT uses standardized leases with defined amendment, assignment, and termination clauses. That can be frustrating if you need an unusual condition. But those standardized terms are documented, tested, and usually easier to enforce.
The flexible host may accept your custom language in one negotiation, then get acquired three years later and assign the lease to a company with different procedures. I have seen exactly that happen on a rooftop deal in 2021.
Verdict. If you need a short-term, low-cost site that you can walk away from, flexibility matters more. If the site is long-term and critical, a standardized contract is usually the safer tradeoff.
Dimension 5: What the Fitch and S&P affirmations actually tell you
Most lease buyers don't read rating reports. If you type 'Fitch Ratings SBA Communications Corp (SBAC)' into a search engine, the results look like bond-market analysis. The same is true for the headline 'S&P affirms SBA Communications Corp (SBAC).' Both look irrelevant until the landlord misses a debt payment.
Why should a lease negotiator care? Because those affirmations reflect the company's ability to meet debt obligations. A lower credit rating means higher financing costs. Higher financing costs create pressure on rent, maintenance, and renewals. If you ask me, ignoring that signal is a red flag.
Remember: a rating is an opinion, not a recommendation to buy, sell, or hold securities. It is also not a guaranteed promise that the company will never default. But for a B2B lease, it is one of the few public, authoritative data points you can use to compare counterparty risk.
Verdict. When Fitch and S&P both affirm an investment-grade rating, the credit signal is strong. Use it as a procurement filter, not as a stock tip. Fitch, S&P, and—critically—your own financial due diligence. In that order.
Which option should you choose?
If you are building or densifying a macro network and the site will serve customers for years, I would lean toward an investment-grade counterparty like SBA Communications. The rental may be higher, but the total risk is lower.
If you have a short-term small-cell trial, a limited budget, and you can move the equipment without killing the business case, a local unrated host can make sense—provided you check ownership, financial statements, and lease assignment language.
Here is the checklist I use now:
- Check the landlord's credit rating. If it does not have one, create your own from its financial statements.
- Model the total lease cost, including a stressed relocation scenario.
- Verify the current Fitch and S&P commentary on the landlord before signing. If it is a public company, the rating pages are usually easy to find.
- Ask what happens to the lease if the landlord is acquired or restructured.
My perspective comes from mistakes, not theory. The lowest quote has cost our team more in the long run more often than I would like to admit. That does not mean you should always pick the biggest or most expensive option. It means you should price the risk, not just the rent.