AT&T Secures $850M In 13M SF Sale-Leaseback With Reign Capital
AT&T sold dozens of office buildings for more than $850M as part of the telecommunications giant's effort to reposition its real estate footprint.
New York-based Reign Capital purchased the properties through sale-leaseback agreements with AT&T. The acquisitions span more than 13M SF of office space that AT&T said was being underutilized.
The locations of the 74 properties weren't disclosed, but the list includes the $112M sale of an office building in downtown Washington, D.C.
“The uniquely structured deal unlocks value in otherwise stranded commercial real estate space,” Michael Ford, AT&T head of global real estate, said in a statement. “It's a creative solution providing both upfront and long-term value through a revenue sharing model that fits with our broader company and transformation initiatives.”
The properties were built when connectivity relied on copper wire networks, and many of the spaces are outdated with unnecessary, bulky, energy-intensive equipment, AT&T said in a release. The deal is part of a plan to exit the vast majority of its legacy copper network operations by the end of 2029.
AT&T will lease back portions of the underutilized properties Reign purchased and will generate more cost savings as it pushes services off its energy-intensive copper wire and into modern fiber-optic and wireless networks that require less space and power, the company said.
Reign Capital didn’t respond to a request for comment.
As part of the transaction, AT&T maintains final approval rights for the redevelopment of any of the sites, and it will have the option to partner with the developer to secure a share of redevelopment projects' revenue.
The deal, which closed Jan. 8, won't impact AT&T’s staffing or services, the company said.
CEO John Stankey first announced plans in May 2023 to cut AT&T’s footprint and consolidate operations in nine core locations, including Dallas, Atlanta, Los Angeles, Seattle, Washington, D.C., San Ramon, California, and Middletown and Bedminster, New Jersey, according to CoStar.
At the time, the firm leased more than 75M SF across 12,000 locations across the U.S.
In 2021, Reign purchased three properties in Milwaukee, Detroit and Pittsburgh from AT&T, which remained a tenant in the buildings. The company sold its Dallas headquarters in 2018 in a similar deal.
