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AT&T Bags $850M in Upfront Proceeds from Sale-Leaseback of Central Offices
As part of its legacy network transformation, AT&T Inc. completed a structured sale-leaseback of underutilized central office facilities with private real estate development firm Reign Capital. The transaction generates more than $850 million in upfront cash proceeds for AT&T through a unique deal structure that enables future profit sharing from redevelopment opportunities.
The transaction includes the asset transfer of 74 less-utilized properties nationwide, encompassing more than 13 million square feet. AT&T said the deal not only monetizes real estate assets as the company plans to exit the large majority of its legacy copper network operations by year-end 2029 but also aligns with the company’s strategic capital allocation priorities.
Central offices were originally built to house and connect large, bulky, and energy-intensive equipment for outdated copper networks. As customers move from copper to fiber and wireless, a smaller, more efficient equipment footprint is managing the network.
“The uniquely structured deal unlocks value in otherwise stranded commercial real estate space,” said Michael Ford, head of global real estate, AT&T. “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.”
AT&T completed a similar but smaller real estate transaction with Reign Capital in 2021, involving 13 properties covering more than three million square feet. That deal generated more than $300 million in upfront cash, with initial redevelopment revenue generation projected to begin in 2025.
Pictured: An AT&T central office in Kalamazoo, MI.
- ◦Lease
- ◦Sale/Acquisition
