AT&T's sale-leaseback of more than 13 million square feet to a New York-based investor for potential redevelopment includes at least five properties that are larger than 400,000 square feet.
The company announced the $850 million deal with Reign Capital last week but did not reveal the addresses of the 74 properties in the portfolio. CoStar research has exclusively identified all the real estate involved in the sale.
The telecommunications giant sold the portfolio of so-called central offices that were built to house and connect large, bulky and energy-intensive equipment for outdated copper networks. AT&T is planning to exit the large majority of its legacy copper network operations by the end of 2029 as technology evolves and AT&T customers move to fiber and wireless systems that require less space.
That led to the sale-leaseback deal to Reign Capital that includes a provision for AT&T to get revenue from any redevelopment of the properties. The largest property in the portfolio is the 584,000-square-foot structure at 1004-1010 Pine St. in St. Louis that was built in 1978 on a 1.2-acre lot, according to CoStar data.
The potential redevelopment of the portfolio could be a boon for some U.S. markets, said Partners Senior Vice President of Research and Market Forecasting Steve Triolet.
"This was an eyebrow-raising move from AT&T," said Triolet, who was not involved in the deal.
Nationally, there's been interest in converting aging buildings into new uses like luxury apartments and hotels. The AT&T sale-leaseback buildings could certainly find a new use through redevelopment while having a Fortune 500 company as an anchor tenant in a long-term lease, Triolet said.
AT&T plans to consult and work with Reign Capital on any new plans for the properties. Reign Capital has not responded to requests for comment from CoStar News about its plans for the properties.