For most, railroad tracks harken back to a time when America was first stretching across the continent. People could ride the rails to visit all the major city centers and presidential candidates could deliver speeches from the last car of a train. Today, those same tracks represent miles and miles of real estate running through both remote and dense urban areas.
Almost 90,000 of those miles of railway are available for CitySwitch to develop cell towers. To do that, it works primarily with three large class-one railroads.
CitySwitch is a privately held, full-service owner and developer of towers and other specialized wireless infrastructure throughout the U.S. It has a project management team that tailors projects to meet carriers’ needs for macro towers. It also provides colocation services across their portfolio of sites, and they will build small cells for wireless service providers requiring infrastructure in densely populated site locations.
A pioneer in railroad asset development, CitySwitch has a legacy dating back to the early 2000’s when they were originally formed in partnership with Norfolk Southern Railway, which was its largest shareholder and investor.
Over the years, CitySwitch diversified away from that model as its companies have participated in several strategic asset dispositions, including a platform rotation into Global Tower Partners in 2010, which then merged into American Tower Corporation.
In 2015, CitySwitch reconstituted and brought in new capital, with a follow-on round of larger, institutional private equity from its sponsor American Infrastructure Funds in 2018 to help support a sizeable build-to-suit backlog and future pipeline. In 2021, CitySwitch completed a strategic recapitalization with CBRE Investment Management, a leading infrastructure and real asset manager with more than $146.9 billion in assets, injecting new enduring capital and developing a platform positioned for long-term strategic growth.
Over the last four years, CitySwitch has built and leased over 200 new build towers and is actively developing a pipeline of another 300 in partnership with its wireless customers, many of which are purpose-designed strategic builds along the CSX right-of-way.
In August of this year, CitySwitch surpassed the 100-tower mark in its relationship with CSX, which has preferred access for use of these towers and will participate in the long-term value creation related to the developed assets. “We continue to add to our backlog of new tower sites, fueling the company’s organic growth,” said Robert Raville, President and CEO of CitySwitch. “We have good line of sight through the end of 2024; we should end the year close to the 50 tower mark.”
“CSX is certainly our largest and most productive real estate development relationship,” Raville said. “We developed many sites with CSX over the last few years, and our pipeline is robust. We’re excited about where we are collectively, and the business continues to grow.”
The Differentiator
CitySwitch does not focus on quantity when it comes to building sites. Its emphasis is on building high quality, high yielding assets through its strategic capital and operational relationships. “At the end of the day, we will build sites that others simply can’t deliver for the most part,” Raville said. “We have strategic national master lease agreements with all of the major carriers and are actively working with them to deploy balance sheet capital to highly strategic and mutually beneficial sites.”
Raville says the company is developing quickly, with the goal of continuing to deploy capital into infrastructure for the foreseeable future throughout the 5G lifecycle. As such, CitySwitch has deployed some small cells and mini macro-type poles. Since small cells don’t require a substantial compound, it opens up certain sections of the right-of-way that otherwise wouldn’t be suitable for a pure play tower, he explained.
Raville also sees opportunities to build out towers as a part of the effort to bridge the digital divide in rural areas. “We’ve done a fair amount of rural builds, both on the right-of-way as well as off, and we’ll continue to invest in underserved communities as our carrier customers continue to support these deployments,” he said.
What’s next?
CitySwitch’s future plans are robust and are advantaged through the years of operational partnership with key stakeholders. Their ability to leverage relationships with railroads, turnkey development partners, general contractors and infrastructure capital managers has proven to be invaluable for the servicing of their customers’ needs.
“With where things are heading in the run-up to and implementation of 5G deployments relative to wireless infrastructure, specifically, there could not be more of an interesting space to be in at this point in time,” Raville said. “So, from our perspective, we want to make sure that we have the capital available to deploy for our customers at scale, and that we deliver for them in a meaningful way, continuing to be regarded as an important part of their deployments over the coming years.”
For more information, email [email protected].
By J. Sharpe Smith, Inside Towers Technology Editor
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