As we look back on 2025, the tower industry has moved past the era of interest rate “shocks” and into a more disciplined, albeit steadier, environment. While 2026 may feel more muted than the “gold rush” years of early 5G, it remains a year of solid fundamentals. Private tower owners are shifting their focus toward maximizing the yield of existing assets and preparing for the next wave of “intelligent” infrastructure. Here are the top concerns our clients are raising as we look forward into 2026.
1. Are interest rates finally the “New Normal”?
In 2025, we were all holding our breath waiting for rates to drop. Now that we’re in 2026, the reality has set in: rates have stabilized, and while they remain elevated, the predictability has brought buyers back to the table. Investors remain frothy for towers, which continue to stand as one of the three critical pillars of the data center/fiber/tower triangle. Valuations for larger portfolios with established management teams remain robust. However, we are seeing a trend of smaller developers selling off mature sites to “recycle capital” into new, high-growth development pipelines. This isn’t due to a drop in asset value, but rather a strategic necessity as commercial bank debt carries high interest rates that make traditional funding for future development more expensive.
2. What does the “Three Tenant Reality” mean for your rent roll?
The industry is finally adjusting to a world with only three healthy national carriers. With the T-Mobile and UScellular merger fully closed as of August 2025 and the integration in high gear, we are seeing the peak of “site rationalization.” If you have both tenants on one tower, the churn risk is real. Furthermore, UScellular has rebranded as Array Digital Infrastructure, pivoting to become a tower owner themselves rather than a retail carrier. Simultaneously, optimism for DISH has evaporated following its $23 billion spectrum sale to AT&T. DISH has signaled a move to an “enhanced MVNO” model, which effectively means it is decommissioning physical mobile sites over time. This is creating a real “DISH Discount” in the M&A market, with many buyers valuing those leases at zero.
However, there is a silver lining to this consolidation: the three-carrier landscape has brought predictability and stability to the developer market that were missing during the volatile “fourth-carrier” chase. With three well-capitalized, rational players, tower developers can now project long-term demand with much higher confidence. The “wildcard” variables have been reduced, enabling more disciplined business planning and a more stable environment for those focused on core densification.
3. Will 2026 be better than 2025?
It’s likely a year of “slow and steady” rather than “fast and flashy.” The initial 5G coverage builds are in the rearview mirror, and we’ve now entered the “5G-Advanced” cycle (3GPP Release 18). The massive AT&T swap from Nokia to Ericsson gear is nearing the 50% completion mark. While carriers have generally been successful at staying within their existing equipment allowances—limiting massive amendment revenue—the sheer volume of activity keeps the industry floor high. While the technical shift to “AI-native” architecture is largely a carrier-level evolution, it is already driving increased power and fiber connectivity requirements.
4. How competitive is the Build-to-Suit industry?
The Build-to-Suit (BTS) landscape in 2026 remains highly competitive but increasingly segmented. While the “Big Three” carriers have slowed their macro-coverage builds, they are aggressively issuing BTS awards for targeted densification. However, the barrier to entry for developers has never been higher. Carriers favor developers who can demonstrate a strong “speed-to-market” and a track record of navigating complex local zoning. Competition for these awards is fierce among regional developers, often leading to compressed initial yields. The successful developers in this environment are those who view BTS not just as a construction project, but as a strategic entry point to secure a location that will eventually host multiple tenants and edge compute applications. Developers who can innovate to acquire sites and get towers standing faster will gain ground on those who do not. (Yes, it is still possible to innovate in tower development.)
5. What’s Happening with Build to Relocate?
The “wild west” days of build-to-relocate (BTR) have matured into a more tactical game. Carriers are still seeking partners to build adjacent towers to lower their rent, but the developer mindset has shifted. Tower developers are now more carefully scrutinizing BTR opportunities for real lease-up potential beyond the anchor tenant. Because a BTR tower by definition implies a low-barrier-to-entry zone (as the carrier was able to permit a second tower nearby), developers are increasingly pushing back on anchor tenant rent levels to reduce volatility and protect their yields. The market is moving away from “volume at any cost” toward a model where developers demand better terms to compensate for the inherent risk of a high-churn, low-barrier environment.
6. Why are developers increasingly focused on “the dirt”?
The focus on the underlying land has intensified as owners look for ways to future-proof their assets. Tower companies are becoming much more aggressive in securing long-term ground leases or buying the land outright to eliminate ground-rent escalations. But it’s not just about owning the dirt; it’s about what you’re allowed to do with it. Savvy owners are revising their leases to ensure they aren’t limited to “wireless communications.” As we look at the potential for battery backup, AI processing, and edge data storage, owning the “dirt” and having the right to use it for power-intensive applications has become a top strategic priority.
7. Will AI and remote sensors finally provide the “Killer App” for 5G?
For years, the industry has been searching for the use case that justifies 5G, and 2026 might finally be the year we see the first real “AI-native” deployments. We’re hearing more developers ask whether “Edge AI”—moving data processing to the tower base—will finally create the massive surge in data traffic and local compute demand that was promised years ago. While the potentially massive deployment of industrial IoT, smart city sensors, and autonomous system telemetry is still ramping up, the technical foundation is finally solid. If 2025 was the year of “AI hype,” 2026 is the year we start to see how that intelligence is physically deployed at a tower site. It’s an upside scenario that most owners are watching with cautious optimism.
