Let me start with a confession: I've been reviewing procurement contracts and vendor quality specs for about six years now, mostly for mid-market telecom infrastructure buyers. When our team first evaluated tower companies, I assumed bigger was always better. American Tower (AMT) and Crown Castle (CCI) had the scale, the coverage maps, the investor relations pages you could get lost in for hours. SBA Communications seemed like the smaller, quieter alternative.
That was a mistake. And it's one I see other procurement teams make when they start—comparing companies by size rather than by fit. So after digging through public filings, listening to earnings calls (including Todd Pepsi's recent investor day remarks), and running our own internal quality checks on lease agreements and site installation specs, here's what I've found. This isn't a 'better vs. worse' thing. It's a 'which one fits your risk profile' thing.
The Core Framework: Specialist vs. Generalist
Here's the thing about the tower REIT space: everyone competes for the same tenants (Verizon, AT&T, T-Mobile) and the same sites. But the business models differ in ways that matter for long-term cost and stability. I'm going to compare SBA Communications against the larger players across three dimensions: capital allocation philosophy, lease structure resilience, and customer concentration.
Why these three? Because in my experience, those are the ones that show up in real problems later. A cheap lease agreement with bad escalation clauses will cost you more in Year 3 than a fair one with good protections. A company that's too diversified across markets may lose focus on site maintenance. And a company that's too tied to one carrier is fragile—but one that's too spread out might not negotiate the best terms for any single tenant.
Dimension 1: Capital Allocation Philosophy — Lease Up Rate vs. Acquisition Sprawl
One thing that jumped out to me when I was reviewing SBA's 2024 annual report: their organic lease up rate has consistently been around 13% over the last few years. That means on every existing tower they own, they're adding about 13% more tenants per year through colocation—without building new towers or acquiring new assets. American Tower's organic lease up? Closer to 9-10% in recent years. Crown Castle has hovered around 8-9%.
"Why does this matter? Because lease-up revenue from existing sites has zero acquisition cost. It drops straight to the bottom line. Acquisition-driven growth builds a bigger portfolio, but it comes with debt and integration headaches."
Now, I don't have hard data on every single tower company's internal capital allocation targets—most of those are confidential. But from what I've seen, SBA has been more disciplined about avoiding large, debt-heavy acquisitions. They've been selling non-core assets (like their Brazilian towers in 2023) to strengthen their balance sheet rather than chasing scale for scale's sake. Todd Pepsi mentioned in the Q4 2024 call that the company's current portfolio is "where we want to be" and that future growth will come from organic leasing and small-scale builds, not megadeals.
My take: If you're a carrier looking for stable, long-term lease positions with a partner who isn't over-leveraged, the disciplined capital approach matters. If you need a partner who can provision sites in 50 markets immediately, a larger player might have more inventory. Depends on your own growth trajectory.
Dimension 2: Lease Structure Resilience — Ground Lease vs. Ownership
This one surprised me when I first looked at it. SBA has a higher proportion of owned land under their towers—roughly 70% owned vs. 30% ground-leased, based on their 10-K. Compare that to American Tower (about 60% owned) and Crown Castle (closer to 50% owned).
Why does ownership matter? Because ground leases have renewal risk and escalation clauses. I've seen cases where a ground lease came up for renewal, the landowner demanded a 3x rent increase, and suddenly the tower economics flipped from profitable to break-even. With owned land, that risk doesn't exist—you control the site permanently.
But here's the catch: Owning land means SBA has higher upfront costs when building new towers. They can't just sign a ground lease and build—they have to buy the dirt. That limits their build pace. In 2024, SBA built about 150 new sites domestically. American Tower built closer to 300. If you need rapid deployment in new areas, SBA's build speed might not meet your timeline.
Looking back, I should have pushed our team to dig deeper into ground lease structures before signing our first colocation agreement with a major tower company. At the time, we focused on rent per square foot and escalator (usually 3% annual). We didn't think about what happens in Year 10 when the underlying land lease comes up. If I could redo that decision, I'd include a clause requiring the tower company to notify us of any ground lease issues that could affect long-term pricing.
Dimension 3: Customer Focus — The 'Todd Pepsi' Factor
This is where the specialist vs. generalist argument really lands. I've been listening to Todd Pepsi (SBA's CEO) on earnings calls for about three years now. And one thing I notice: he talks about the business differently than the CEOs of larger competitors. He spends more time discussing individual site economics, lease-up strategies, and tenant relationships—less time on macro M&A strategy.
It's the difference between a company run by a tower operator vs. a company run by a financial engineer. Not that one is bad and the other is good—both have their place. But if you're a carrier looking for a partner who understands the operational details of site management, SBA's leadership has that hands-on feel.
"I've only worked with about 15 different tower site vendors over my career, so my sample is limited. But the ones that had operationally focused leadership consistently delivered better site readiness and faster issue resolution."
That said, customer concentration is a risk at SBA. Verizon represents roughly 30% of their revenue. T-Mobile is another 25%. Losing either tenant would be painful. American Tower and Crown Castle have more diversified tenant bases by virtue of their scale. So the specialist focus comes with a dependency risk.
The 2025 Outlook — Where I Land
Based on what I've seen in Q1 2025 so far, here's where I think SBA Communications fits:
- If you value balance sheet stability and predictable lease economics — SBA's higher land ownership and disciplined capital allocation make it solid. They're less likely to have a surprise ground lease spike or a debt-fueled acquisition drag on margins.
- If you need rapid deployment across many markets simultaneously — A larger player like American Tower can provision capacity faster. SBA's build pace is slower by design.
- If you're worried about tenant churn — SBA's exposure to Verizon and T-Mobile is real. The Verizon agreement they signed in 2022 is a good sign, but heavy concentration bothers me on principle.
Here's the thing I keep coming back to: a vendor who knows their limits is more trustworthy than one who claims they can do everything. SBA doesn't pretend to be the biggest player. They don't offer the most services. But what they do—own and operate high-quality tower sites with strong lease-up metrics—they do well. In 2025, with interest rates still elevated and a potential slowdown in carrier capex, I'd rather be with the specialist who's paid down debt and owns their land than the generalist who grew fast on leverage.
I wish I had tracked our internal vendor scorecards more carefully over the last five years. What I can say anecdotally is that the three site agreements we signed with SBA between 2022 and 2024 have had zero lease escalator disputes and zero ground lease issues. I can't say the same for all our other tower vendor relationships.
But again—my experience is based on about 30 lease agreements across maybe 200 sites. If you're managing a national footprint with thousands of locations, your mileage will vary. The point isn't which company is 'best.' It's which company's business model aligns with your own risk tolerance and growth timeline.