(Reuters) -AT&T said on Friday it has secured $850 million through the sale-leaseback of its underused central office facilities that house its legacy copper networks to real estate development firm Reign Capital.
The U.S. telecom major is planning to exit a majority of its copper network operations by 2029 as customers shift to newer technologies such as fiber optics and wireless networks, which offer superior speed and reliability and require a smaller space to operate.
Sale-leaseback is a financing option in which a company sells part of its assets to raise capital and leases back the same property to run its operations.
AT&T (NYSE:T) will lease back only the space required for its network operations.
“The uniquely structured deal unlocks value in otherwise stranded commercial real estate space,” said Michael Ford (NYSE:F), head of global real estate at AT&T.
The transaction, which closed in early January, includes asset transfer of 74 properties across the country, affecting only a small portion of AT&T’s portfolio of central offices and has no impact on jobs or changes in the services, the company said.
The Dallas, Texas-based company’s shares rose 0.7% in early trading.
