lmrk-10k_20181231.htm

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                    

Commission File Number: 001-36735

Landmark Infrastructure Partners LP

(Exact name of registrant as specified in its charter)  

 

Delaware

 

61-1742322

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

400 Continental Blvd, Suite 500,
P.O. Box 3429
El Segundo, CA 90245

 

90245

(Address of principal executive offices)

 

(Zip Code)

(310) 598-3173

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities Registered Pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Name of Each Exchange on which Registered

Common Units, Representing Limited Partner Interests

 

NASDAQ Global Market

8.0% Series A Cumulative Redeemable Preferred Units, $25.00 par value

 

NASDAQ Global Market

7.9% Series B Cumulative Redeemable Preferred Units, $25.00 par value

 

NASDAQ Global Market

Series C Floating-to-Fixed Rate Cumulative Redeemable Perpetual Convertible Preferred Units, $25.00 par value

 

NASDAQ Global Market

 

Securities Registered Pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes       No  

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes       No       

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  

 

Accelerated filer  

 

Non-accelerated filer  

 

Smaller reporting company  

Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

The aggregate market value of the equity held by non-affiliates of the registrant on June 29, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $13.85, was approximately $341 million.

The registrant had 25,338,432 common units outstanding at February 15, 2019.

DOCUMENTS INCORPORATED BY REFERENCE

None

 

 

 

 


Table of Contents

 

Table of Contents

 

 

 

Page
Number

 

PART I

 

Item 1.

Business and Properties

4

Item 1A.

Risk Factors

19

Item 1B.

Unresolved Staff Comments

47

Item 2.

Properties

47

Item 3.

Legal Proceedings

47

Item 4.

Mine Safety Disclosures

47

 

PART II

 

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

48

Item 6.

Selected Financial Data

50

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

55

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

74

Item 8.

Financial Statements and Supplementary Data

75

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

75

Item 9A.

Controls and Procedures

75

Item 9B.

Other Information

76

 

PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance

76

Item 11.

Executive Compensation

81

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

82

Item 13.

Certain Relationships and Related Transactions, and Director Independence

82

Item 14.

Principal Accountant Fees and Services

85

 

PART IV

 

Item 15.

Exhibits, Financial Statement Schedules

86

 

2


Table of Contents

 

Unless the context otherwise requires, references in this report to "our partnership," "we," "our," "us," or like terms refer to Landmark Infrastructure Partners LP. References to “our general partner” refer to Landmark Infrastructure Partners GP LLC.

Some of the information in this Annual Report on Form 10-K may contain forward‑looking statements. Forward‑looking statements give our current expectations, contain projections of results of operations or of financial condition, or forecasts of future events. Words such as “may,” “will,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward‑looking statements. They can be affected by and involve assumptions used or known or unknown risks or uncertainties. Consequently, no forward‑looking statements can be guaranteed. When considering these forward‑looking statements, you should keep in mind the risk factors and other cautionary statements in this Annual Report on Form 10-K. Actual results may vary materially. You are cautioned not to place undue reliance on any forward‑looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. The risk factors and other factors noted throughout this Annual Report on Form 10-K could cause our actual results to differ materially from the results contemplated by such forward‑looking statements, including the following:

 

the number of real property interests that we are able to acquire, and whether we are able to complete such acquisitions on favorable terms, which could be adversely affected by, among other things, general economic conditions, operating difficulties, and competition;

 

the number of completed infrastructure developments;

 

the prices we pay for our acquisitions of real property;

 

our management’s and our general partner’s conflicts of interest with our own;

 

the rent increases we are able to negotiate with our tenants, and the possibility of further consolidation among a relatively small number of significant tenants in the wireless communication and outdoor advertising industries;

 

changes in the price and availability of real property interests;

 

changes in prevailing economic conditions;

 

unanticipated cancellations of tenant leases;

 

a decrease in our tenants’ demand for real property interests due to, among other things, technological advances or industry consolidation;

 

inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change, unanticipated ground, grade or water conditions, and other environmental hazards;

 

inability to acquire or maintain necessary permits;

 

changes in laws and regulations (or the interpretation thereof), including zoning regulations;

 

difficulty collecting receivables and the potential for tenant bankruptcy;

 

additional expenses associated with being a publicly traded partnership;

 

our ability to borrow funds and access capital markets, and the effects of the fluctuating interest rate on our existing and future borrowings;

 

mergers or consolidation among wireless carriers;

 

restrictions in our revolving credit facility on our ability to issue additional debt or equity or pay distributions;

 

performance of our joint ventures; and

 

certain factors discussed elsewhere in this Annual Report on Form 10-K.

All forward‑looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

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Table of Contents

 

PART I

ITEM 1. Business and Properties

 

Overview

We are a growth‑oriented partnership formed by Landmark Dividend LLC (“Landmark” or “Sponsor”) to acquire, develop, own and manage a portfolio of real property interests and infrastructure assets that are leased to companies in the wireless communication, outdoor advertising and renewable power generation industries. The Partnership is a master limited partnership organized in the State of Delaware and has been publicly traded since its initial public offering on November 19, 2014 (the “IPO”). Our common units are listed on the NASDAQ Global Market under the symbol “LMRK”. The Partnership holds substantially all of its assets in a wholly owned subsidiary, Landmark Infrastructure Inc., a Delaware corporation (“REIT Subsidiary”), which elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with its taxable year ending December 31, 2017. We intend to continue to own and operate substantially all of our assets through the REIT Subsidiary. Our legal structure substantially eliminates unrelated business taxable income allocated by the Partnership to tax-exempt investors, including individuals investing through tax-deferred accounts such as an individual retirement account, and we do not intend to generate state source income.

Our real property interests underlie our tenants’ infrastructure assets, which include freestanding cellular towers and rooftop wireless sites, billboards, wind turbines and solar arrays. These assets are essential to the operations and profitability of our tenants. We seek to acquire real property interests subject to triple net or effectively triple net lease arrangements containing contractual rent increase clauses, or “rent escalators,” which we believe provide us with stable, predictable and growing cash flow.

Our real property interests consist of a diversified portfolio of long‑term and perpetual easements, tenant lease assignments and fee simple properties located primarily in the United States. These real property interests entitle us to receive rental payments from leases on our 1,920 tenant sites. Approximately 79% of our leased tenant sites are leased to large, publicly traded companies (or their affiliates) that have a national footprint and for our renewable power generation segment includes tenants with power purchase agreements with subsidiaries or affiliates of high credit rated utilities or high quality offtakers. These tenants, which we refer to as our “Tier 1” tenants, are comprised of AT&T Mobility, Sprint, T‑Mobile and Verizon in the wireless carrier industry, American Tower, Crown Castle and SBA Communications in the cellular tower industry, Outfront Media, Clear Channel Outdoor and Lamar Advertising in the outdoor advertising industry and Southern California Edison and Duke Energy in the renewable power generation industry.

We believe the terms of our tenant lease arrangements provide us with stable, predictable and growing cash flow that will support growing distributions to our unitholders. Substantially all of our tenant lease arrangements are triple net or effectively triple net, meaning that our tenants or the underlying property owners are contractually responsible for property‑level operating expenses, including maintenance capital expenditures, property taxes and insurance. Over 90% of our tenant leases have contractual rent escalators, and some of our tenant leases contain revenue‑sharing provisions in addition to the base monthly or annual rental payments. In addition, we believe the physical infrastructure assets at our tenant sites are essential to the ongoing operations and profitability of our tenants. When combined with the challenges and costs of relocating these infrastructure assets and the key strategic locations of our real property interests, we expect continued high tenant retention and occupancy rates. As of December 31, 2018, we had a 95% occupancy rate, with 1,831 of our 1,920 total available tenant sites leased.

We benefit significantly from our relationship with Landmark, our Sponsor. Landmark, a private company formed in 2010, is one of the largest acquirers of real property interests underlying the operationally essential infrastructure assets in the wireless communication, outdoor advertising and renewable power generation industries. We believe Landmark’s asset acquisition and management platform will benefit us by providing us with acquisitions and development opportunities. Please read “Our Relationship with Landmark” and “Infrastructure Development”.

We conduct business through three reportable business segments: Wireless Communication, Outdoor Advertising and Renewable Power Generation. Our reportable segments are strategic business units that offer different products and services. They are commonly managed, as all of these businesses require similar marketing and business strategies. We evaluate our segments based on revenue because substantially all of our tenant lease arrangements are triple net or effectively triple net. We believe this measure provides investors with relevant and useful information because it is presented on an unlevered basis. See Notes to the Consolidated and Combined Financial Statements for additional information on our business segments.

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Table of Contents

 

Our Portfolio of Real Property Interests

Our portfolio of property interests consists primarily of (i) long‑term and perpetual easements combined with lease assignment contracts (which we refer to as our “lease assignments)” (ii) lease assignments without easements and (iii) properties we own in fee simple. In connection with each real property interest, we have also acquired the rights to receive payment under pre‑existing ground leases from property owners, which we refer to as our “tenant leases.” Under our easements, property owners have granted us the right to use and lease the space occupied by our tenants, and when we have not been granted easements, we have acquired economic rights under lease assignments that are substantially similar to the economic rights granted under our easements, including the right to re‑lease the same space if the tenant lease expires or terminates.

The table below provides an overview of our portfolio of real property interests as of December 31, 2018.

Our Real Property Interests

 

 

 

 

 

 

 

Available Tenant

 

 

 

Leased Tenant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sites(1)

 

 

 

Sites

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

Monthly

 

 

Quarterly

 

 

Percentage

 

 

 

Number of

 

 

 

 

 

 

Property

 

 

 

 

 

 

 

Lease

 

 

Tenant Site

 

 

Effective Rent

 

 

Rental

 

 

of Quarterly

 

 

 

Infrastructure

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

Term

 

 

Occupancy

 

 

Per Tenant

 

 

Revenue

 

 

Rental

 

Real Property Interest

 

Locations(1)

 

 

Number

 

 

(Years)

 

 

 

Number

 

 

(Years)(2)

 

 

Rate(3)(4)

 

 

Site(4)(5)

 

 

(in thousands)(6)

 

 

Revenue(6)

 

Tenant Lease Assignment with

   Underlying Easement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

726

 

 

 

918

 

 

 

72.7

 

(7)

 

 

864

 

 

 

27.8

 

 

 

 

 

 

 

 

 

 

$

5,156

 

 

 

35

%

Outdoor Advertising

 

 

531

 

 

 

631

 

 

 

80.5

 

(7)

 

 

615

 

 

 

17.6

 

 

 

 

 

 

 

 

 

 

 

4,150

 

 

 

28

%

Renewable Power Generation

 

 

24

 

 

 

56

 

 

 

28.6

 

(7)

 

 

56

 

 

 

29.3

 

 

 

 

 

 

 

 

 

 

 

432

 

 

 

3

%

Subtotal

 

 

1,281

 

 

 

1,605

 

 

 

78.6

 

(7)

 

 

1,535

 

 

 

23.8

 

 

 

 

 

 

 

 

 

 

$

9,738

 

 

 

66

%

Tenant Lease Assignment only(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

122

 

 

 

176

 

 

 

48.2

 

 

 

 

158

 

 

 

17.8

 

 

 

 

 

 

 

 

 

 

$

994

 

 

 

7

%

Outdoor Advertising

 

 

32

 

 

 

35

 

 

 

63.1

 

 

 

 

34

 

 

 

14.2

 

 

 

 

 

 

 

 

 

 

 

225

 

 

 

2

%

Renewable Power Generation

 

 

6

 

 

 

6

 

 

 

48.6

 

 

 

 

6

 

 

 

27.6

 

 

 

 

 

 

 

 

 

 

 

57

 

 

 

%

Subtotal

 

 

160

 

 

 

217

 

 

 

50.8

 

 

 

 

198

 

 

 

17.5

 

 

 

 

 

 

 

 

 

 

$

1,276

 

 

 

9

%

Tenant Lease on Fee Simple

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

19

 

 

 

29

 

 

 

99.0

 

(7)

 

 

29

 

 

 

18.7

 

 

 

 

 

 

 

 

 

 

$

1,213

 

 

 

8

%

Outdoor Advertising

 

 

50

 

 

 

54

 

 

 

99.0

 

(7)

 

 

54

 

 

 

7.8

 

 

 

 

 

 

 

 

 

 

 

906

 

 

 

6

%

Renewable Power Generation

 

 

13

 

 

 

15

 

 

 

99.0

 

(7)

 

 

15

 

 

 

30.9

 

 

 

 

 

 

 

 

 

 

 

1,581

 

 

 

11

%

Subtotal

 

 

82

 

 

 

98

 

 

 

99.0

 

(7)

 

 

98

 

 

 

14.4

 

 

 

 

 

 

 

 

 

 

$

3,700

 

 

 

25

%

Total

 

 

1,523

 

 

 

1,920

 

 

 

72.9

 

(9)

 

 

1,831

 

 

 

22.6

 

 

 

 

 

 

 

 

 

 

$

14,714

 

 

 

100

%

Aggregate Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

867

 

 

 

1,123

 

 

 

68.8

 

 

 

 

1,051

 

 

 

26.0

 

 

 

94

%

 

$

1,927

 

 

 

7,363

 

 

 

50

%

Outdoor Advertising

 

 

613

 

 

 

720

 

 

 

80.8

 

 

 

 

703

 

 

 

16.7

 

 

 

98

%

 

 

2,535

 

 

 

5,281

 

 

 

36

%

Renewable Power Generation

 

 

43

 

 

 

77

 

 

 

37.3

 

 

 

 

77

 

 

 

29.6

 

 

 

100

%

 

 

8,960

 

 

 

2,070

 

 

 

14

%

Total

 

 

1,523

 

 

 

1,920

 

 

 

72.9

 

(9)

 

 

1,831

 

 

 

22.6

 

 

 

95

%

 

$

2,458

 

 

$

14,714

 

 

 

100

%

 

(1)

“Available Tenant Sites” means the number of individual sites that could be leased. For example, if we have an easement on a single rooftop, on which three different tenants can lease space from us, this would be counted as three “tenant sites,” and all three tenant sites would be at a single infrastructure location with the same address.

(2)

Assumes the exercise of all remaining renewal options of tenant leases. Assuming no exercise of renewal options, the average remaining lease terms for our wireless communication, outdoor advertising, renewable power generation and total portfolios as of December 31, 2018 were 3.8, 8.5, 17.6 and 5.9 years, respectively.

(3)

Represents number of leased tenant sites divided by number of available tenant sites.

(4)

Occupancy and average monthly effective rent per tenant site are shown only on an aggregate portfolio basis by industry.

(5)

Represents total monthly revenue excluding the impact of amortization of above and below market lease intangibles divided by the number of leased tenant sites.

(6)

Represents GAAP rental revenue recognized under existing tenant leases for the three months ended December 31, 2018. Excludes interest income on receivables.

(7)

Fee simple ownership and perpetual easements are shown as having a term of 99 years for purposes of calculating the average remaining term.

(8)

Reflects “springing lease agreements” whereby the cancellation or nonrenewal of a tenant lease entitles us to enter into a new ground lease with the property owner (up to the full property interest term) and a replacement tenant lease. The remaining lease assignment term is, therefore, equal to or longer than the remaining lease term. Also represents properties for which the “springing lease” feature has been exercised and has been replaced by a lease for the remaining lease term.

(9)

Excluding perpetual ownership rights, the average remaining property interest term on our tenant sites is approximately 64 years.

Our real property interests entitle us to receive rental payments from tenant leases in the wireless communication, outdoor advertising and renewable power generation industries. The table below summarizes our Tier 1 tenants which comprised approximately 79% of our tenants as of December 31, 2018.

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Table of Contents

 

Our Tier 1 Tenants by Industry

 

Wireless Communication

 

 

Outdoor Advertising

 

 

Renewable Power Generation

 

Wireless Carriers

 

 

Tower Companies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Total

 

 

 

 

% of Total

 

 

 

 

% of Total

 

 

 

 

% of Total

 

 

 

Leased

 

 

 

 

Leased

 

 

 

 

Leased

 

 

 

 

Leased

 

Tenant

 

Tenant Sites

 

 

Tenant

 

Tenant Sites

 

 

Tenant

 

Tenant Sites

 

 

Offtaker

 

Tenant Sites

 

T-Mobile

 

 

10

%

 

Crown Castle

 

 

9

%

 

Lamar Advertising

 

 

9

%

 

Southern California Edison

 

 

2

%

AT&T Mobility

 

 

8

%

 

American Tower

 

 

8

%

 

Outfront Media

 

 

9

%

 

Duke Energy

 

 

1

%

Verizon

 

 

7

%

 

SBA Communications

 

 

1

%

 

Clear Channel Outdoor

 

 

8

%

 

 

 

 

 

 

Sprint

 

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

32

%

 

Total

 

 

18

%

 

Total

 

 

26

%

 

Total

 

 

3

%

 

Our real property interests underlie a diverse range of tenant structures. We evaluate assets based on a variety of attributes, including, but not limited to, the marketability of the underlying title, the stability of the rental cash flow stream and opportunity for rent increases, tenant quality, the desirability of the structure’s geographic location, the importance of the structure to the ongoing operations and profitability of our tenants and the challenge and costs associated with tenants vacating sites. In certain instances, we lease a tenant site for our tenant’s base station and equipment, but not the tenant’s antenna array located on infrastructure owned by a third party. We refer to this type of arrangement as an “equipment only” lease. Within the wireless communication industry, our tenants’ structure types include rooftop sites, wireless towers (including monopoles, self-supporting towers, stealth towers and guyed towers), other structures (including, for example, water towers and church steeples or commercial properties) and equipment only sites. In the outdoor advertising industry, our tenants’ structure types include both static and digital billboards. Our real property interests in the renewable power generation industry currently underlie wind turbines and solar arrays.

The table below presents an overview of the structures underlying our real property interests, as of December 31, 2018:

Our Real Property Interests by Structure Type

 

 

 

 

 

 

 

Available Tenant

 

 

 

Leased Tenant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sites(1)

 

 

 

Sites

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

Remaining

 

 

Quarterly

 

 

Percentage

 

 

 

Number of

 

 

 

 

 

 

Property

 

 

 

 

 

 

 

Lease

 

 

Rental

 

 

of Quarterly

 

 

 

Infrastructure

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

Term

 

 

Revenue

 

 

Rental

 

Structure Type

 

Locations(1)

 

 

Number

 

 

(Years)(2)

 

 

 

Number

 

 

(Years)(3)

 

 

(in thousands)(4)

 

 

Revenue(4)

 

Rooftops

 

 

312

 

 

 

422

 

 

 

60.3

 

 

 

 

376

 

 

 

13.1

 

 

$

2,707

 

 

 

18

%

Towers

 

 

418

 

 

 

461

 

 

 

76.3

 

 

 

 

451

 

 

 

34.4

 

 

 

2,423

 

 

 

16

%

Billboards

 

 

613

 

 

 

720

 

 

 

80.8

 

 

 

 

703

 

 

 

16.7

 

 

 

5,281

 

 

 

36

%

Other structures

 

 

107

 

 

 

127

 

 

 

75.3

 

 

 

 

123

 

 

 

34.7

 

 

 

1,669

 

 

 

11

%

Equipment only(5)

 

 

32

 

 

 

116

 

 

 

62.9

 

 

 

 

104

 

 

 

13.7

 

 

 

573

 

 

 

4

%

Wind turbines

 

 

16

 

 

 

47

 

 

 

32.9

 

 

 

 

47

 

 

 

35.1

 

 

 

365

 

 

 

3

%

Solar

 

 

25

 

 

 

27

 

 

 

58.7

 

 

 

 

27

 

 

 

26.9

 

 

 

1,696

 

 

 

12

%

Total

 

 

1,523

 

 

 

1,920

 

 

 

72.9

 

(6)

 

 

1,831

 

 

 

22.6

 

 

$

14,714

 

 

 

100

%

 

(1)

“Available Tenant Sites” means the number of individual sites that could be leased. For example, if we have an easement on a single rooftop, on which three different tenants can lease space from us, this would be counted as three “tenant sites,” and all three tenant sites would be at a single infrastructure location with the same address.

(2)

Fee simple ownership and perpetual easements are indicated as having a term of 99 years for purposes of calculating the average remaining term. Also includes “springing lease agreements” whereby the cancellation or nonrenewal of a tenant lease entitles us to enter into a new ground lease with the property owner (up to the full term) and a replacement tenant lease. The remaining lease assignment term is, therefore, in many cases, higher than the remaining tenant lease term.

(3)

Assumes the exercise of all remaining renewal options. Assuming no exercise of renewal options, the average remaining lease terms for our wireless communication, outdoor advertising, renewable power generation and total portfolio as of December 31, 2018 were 3.8, 8.5, 17.6 and 5.9 years, respectively.

(4)

Represents GAAP rental revenue recognized under existing tenant leases for the three months ended December 31, 2018. Excludes interest income on receivables.

(5)

In certain instances, we lease our tenant site for our tenant’s base station and equipment, but the tenant’s antenna array and related hardware are located on infrastructure owned by a third party. We refer to this type of arrangement as an “equipment only” lease. At 58 infrastructure locations, we have leased space for equipment together with other structures.

(6)

Excluding perpetual ownership rights, the average remaining property interest term on our tenant sites is approximately 64 years.

We are geographically diversified with assets primarily located throughout the United States, and no single state accounted for more than 11% of our tenant sites as of December 31, 2018. Additionally, the majority of our wireless communication and outdoor advertising assets are located in major cities, significant intersections, and traffic arteries in the United States that benefit from high urban density, favorable demographic trends, strong traffic counts and strict zoning restrictions with legacy zoning rights (commonly referred to as “grandfather clauses.”) These attributes enhance the long‑term value of our real property interests, as our wireless communication and outdoor advertising tenants are focused on placing their assets in dense areas with large populations and along high‑traffic corridors. Additionally, local zoning regulations often restrict the construction of new cellular towers, rooftop wireless structures and outdoor advertising and billboard structures, creating barriers to entry and a supply shortage. We believe this leads to improved value of our assets and further increases the likelihood for continued high occupancy.

6


Table of Contents

 

The table below summarizes our real property interests by state as of December 31, 2018.

Our Real Property Interests by State

 

 

 

Wireless Communication

 

 

Outdoor Advertising

 

 

Renewable Power Generation

 

 

Total

 

 

 

Number of

 

 

Quarterly

 

 

Number of

 

 

Quarterly

 

 

Number of

 

 

Quarterly

 

 

Number of

 

 

Quarterly

 

 

Percentage of

 

 

 

Available

 

 

Rental

 

 

Available

 

 

Rental

 

 

Available

 

 

Rental

 

 

Available

 

 

Rental

 

 

Quarterly

 

 

 

Tenant

 

 

Revenue

 

 

Tenant

 

 

Revenue

 

 

Tenant

 

 

Revenue

 

 

Tenant

 

 

Revenue

 

 

Rental

 

 

 

Sites

 

 

(in thousands)(1)

 

 

Sites

 

 

(in thousands)(1)

 

 

Sites

 

 

(in thousands)(1)

 

 

Sites

 

 

(in thousands)(1)

 

 

Revenue

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alaska

 

 

2

 

 

$

6

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

2

 

 

$

6

 

 

 

0.0

%

Alabama

 

 

6

 

 

 

19

 

 

 

8

 

 

 

28

 

 

 

 

 

 

 

 

 

14

 

 

 

47

 

 

 

0.3

%

Arkansas

 

 

11

 

 

 

31

 

 

 

4

 

 

 

7

 

 

 

 

 

 

 

 

 

15

 

 

 

38

 

 

 

0.3

%

Arizona

 

 

35

 

 

 

155

 

 

 

20

 

 

 

97

 

 

 

 

 

 

 

 

 

55

 

 

 

252

 

 

 

1.7

%

California

 

 

151

 

 

 

909

 

 

 

26

 

 

 

1,168

 

 

 

41

 

 

 

1,540

 

 

 

218

 

 

 

3,617

 

 

 

24.6

%

Colorado

 

 

30

 

 

 

189

 

 

 

6

 

 

 

58

 

 

 

 

 

 

 

 

 

36

 

 

 

247

 

 

 

1.7

%

Connecticut

 

 

21

 

 

 

145

 

 

 

10

 

 

 

71

 

 

 

 

 

 

 

 

 

31

 

 

 

216

 

 

 

1.5

%

District of Columbia

 

 

1

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

7

 

 

 

0.0

%

Florida

 

 

54

 

 

 

390

 

 

 

73

 

 

 

316

 

 

 

1

 

 

 

14

 

 

 

128

 

 

 

720

 

 

 

4.9

%

Georgia

 

 

13

 

 

 

65

 

 

 

80

 

 

 

310

 

 

 

 

 

 

 

 

 

93

 

 

 

375

 

 

 

2.4

%

Hawaii

 

 

1

 

 

 

6

 

 

 

 

 

 

 

 

 

1

 

 

 

40

 

 

 

2

 

 

 

46

 

 

 

0.3

%

Iowa

 

 

3

 

 

 

7

 

 

 

3

 

 

 

4

 

 

 

 

 

 

 

 

 

6

 

 

 

11

 

 

 

0.1

%

Idaho

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

0.0

%

Illinois

 

 

74

 

 

 

680

 

 

 

48

 

 

 

237

 

 

 

2

 

 

 

63

 

 

 

124

 

 

 

980

 

 

 

6.7

%

Indiana

 

 

5

 

 

 

27

 

 

 

25

 

 

 

60

 

 

 

1

 

 

 

1

 

 

 

31

 

 

 

88

 

 

 

0.6

%

Kansas

 

 

14

 

 

 

63

 

 

 

4

 

 

 

5

 

 

 

4

 

 

 

8

 

 

 

22