Pebblebrook Puts Its Rooftops into Play with Cell Tower Investment

Alternative asset manager Melody Investment Advisors will invest in 14 rooftop cell sites at hotels and resorts owned by Pebblebrook Hotel Trust, marking the latest deal in a growing trend of commercial property owners putting otherwise dormant space into play.

Melody, which focuses on communications infrastructure, will invest in 14 rooftop wireless assets at 11 of the REIT’s properties across the US. Melody and Pebblebrook will also participate in a marketing and revenue sharing agreement covering the Pebblebrook properties. 

Jorge Pedraza, Operating Partner at Melody Investment Advisors and President of Symphony Wireless, its cell site acquisition affiliate, called the arrangement a “strategic urban center rooftop portfolio” in a statement. The agreement is also symptomatic of a larger trend at play for property owners: as cellular companies have dramatically increased their investment into 5G coverage, there’s been a feeding frenzy for 5G rights and tower placement sites. Rooftops are a natural, more aesthetically pleasing option for 5G infrastructure and offer commercial property owners the ability to monetize otherwise unusable space. 

“This arrangement positions us to generate additional revenue growth from a key, but underdeveloped, asset class that we have in our urban and resort lifestyle hotel portfolio: our rooftops,” said Max Leinweber and Jen Yager, Vice Presidents of Investments at Pebblebrook. 

Earlier this year, NAI launched a division to market buildings to cell tower operators. NAI Global Wireless rolled out to exclusively represent owners and landlords in marketing properties to cell tower operators and wireless carriers.  

“The telecommunications industry is on fire and the major carriers have issued dozens of RFPs to various providers for national and regional pricing related to installations, upgrades and conversions of existing cell sites nationwide for 5G upgrades, which means carriers are expected to designate approximately $6 billion in capital improvement projects in 2021 and 2022, with the third and fourth quarters of 2021 to be the most robust construction period for 5G conversion nationwide,” David Moore, who heads the NAI venture alongside Amber Brandhagen, told GlobeSt in January.