Tubes 2Q'26: Starlink Scenarios, Estimates to 28, Tech REITs Getting Attractive to Traditionals

Research evidence excerpt

Tubes 2Q'26: Starlink Scenarios, Estimates to 28, Tech REITs Getting Attractive to Traditionals

June 11, 2026

6 below shows the y/y growth rate for interconnection revenues for the data centers, which were

double digits for both companies in 1Q. We assume this continues for our forward forecast period.

Overall, we expect low to mid single digit same store growth for data centers for our forecast period

(Exhibit 7).

■Fee income - a meaningful but potentially moderating earnings driver. Both EQIX non-recurring

revenue (NRR) (Exhibit 8), and DLR fee income have contributed to earnings this year (Exhibit 9).

Our forward forecasts for both companies assume fees as a percent of overall earnings declines. We

will watch to see fee sizing for 2026 to see whether they create "tough comps" for forward earnings.

○External Growth. Exhibit 10 below shows our estimate of annual accretion on a headline basis for external

growth from development for the companies under coverage. The calculation assumes external capital

(rather than retained cash) for funding. Our analysis concludes data centers have greater external growth

potential, due to larger annual activity with only AMT (through Coresite) participating on the cell tower

side. Please note the following:

■AMT external growth capex includes non-data center investments (such as ground lease purchases)

which reduces overall yield versus data center development.

■There is "double counting" in the accretion associated with development and internal growth.

For example, the growth shown for Coresite in Exhibit 2 below includes growth associated with

development spend.

○Refinancing will remain a headwind for the entire sector (Exhibit 11 shows the magnitude of debt