lmrk-10k_20171231.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, 2017

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.)

2141 Rosecrans Avenue, Suite 2100,
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

 

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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 30, 2017, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $16.00, was approximately $306 million.

The registrant had 21,656,705 common units and 3,135,109 subordinated units outstanding at February 9, 2018.

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

20

Item 1B.

Unresolved Staff Comments

44

Item 2.

Properties

44

Item 3.

Legal Proceedings

44

Item 4.

Mine Safety Disclosures

44

 

PART II

 

Item 5.

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

45

Item 6.

Selected Financial Data

48

Item 7.

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

52

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

70

Item 8.

Financial Statements and Supplementary Data

70

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

70

Item 9A.

Controls and Procedures

70

Item 9B.

Other Information

71

 

PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance

71

Item 11.

Executive Compensation

76

Item 12.

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

77

Item 13.

Certain Relationships and Related Transactions, and Director Independence

78

Item 14.

Principal Accountant Fees and Services

81

 

PART IV

 

Item 15.

Exhibits, Financial Statement Schedules

82

 

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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. References to “Fund C” refer to Landmark Dividend Growth Fund-C LLC, references to “Fund E” refer to Landmark Dividend Growth Fund-E LLC, references to “Fund F” refer to Landmark Dividend Growth Fund-F LLC and references to “Fund G” refer to Landmark Dividend Growth Fund-G LLC (collectively referred to as the “Acquired Funds”). As of December 31, 2017, references to the “Remaining Landmark Funds” which have granted us a right of first offer on their assets, refer to, Landmark Dividend Growth Fund-H LLC, Landmark Dividend Growth Fund-I LLC, Landmark Dividend Growth Fund-J LLC and Landmark Dividend Growth Fund-K LLC, collectively.

Some of the information in this Annual Report on Form 10-K may contain forwardlooking statements. Forwardlooking 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 forwardlooking statements. They can be affected by and involve assumptions used or known or unknown risks or uncertainties. Consequently, no forwardlooking statements can be guaranteed. When considering these forwardlooking 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 forwardlooking 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 forwardlooking 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; and

 

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

All forwardlooking 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, 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. In addition, the Partnership owns certain interests in receivables associated with similar assets. The Partnership is a limited partnership organized in the State of Delaware and has been publicly traded since its initial public offering (“IPO”) on November 19, 2014. Our common units are listed on the NASDAQ Global Market under the symbol "LMRK". On July 31, 2017, the Partnership completed changes to its organizational structure by transferring substantially all of its assets to a subsidiary, Landmark Infrastructure Inc., a Delaware corporation (“REIT Subsidiary”), which is intended to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). We intend to continue to own and operate substantially all of our assets through the REIT Subsidiary. These changes are designed to simplify tax reporting for unitholders and intended to broaden the Partnership’s investor base by substantially eliminating 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.

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 2,239 tenant sites. Approximately 83% 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, Duke Energy and Pacific Gas and Electric 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 93% 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, 2017, we had a 96% occupancy rate, with 2,157 of our 2,239 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. Our initial assets and liabilities were contributed to us from two private investment funds sponsored, managed and controlled by Landmark. As of December 31, 2017, Landmark controlled approximately 700 additional tenant sites through the Remaining Landmark Funds. The Remaining Landmark Funds have granted us a right of first offer on real property interests that they currently own or acquire in the future before selling or transferring those assets to any third party. We refer to these real property interests as the “right of first offer assets.” During the years ended December 31, 2017, 2016 and 2015, the Partnership completed the acquisition of 2, 386 and 401 tenant sites subject to our right of first offer, respectively. See further discussion of the acquisitions in notes to the Consolidated and Combined Financial Statements for additional information. We believe Landmark’s asset acquisition and management platform will benefit us by providing us with drop‑down acquisition opportunities from Landmark’s substantial and growing acquisition pipeline, as well as the capability to make direct acquisitions from third parties. 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, 2017.

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

 

 

1,068

 

 

 

1,357

 

 

 

78.2

 

(7)

 

 

1,305

 

 

 

28.6

 

 

 

 

 

 

 

 

 

 

$

7,282

 

 

 

51

%

Outdoor Advertising

 

 

432

 

 

 

521

 

 

 

84.1

 

(7)

 

 

509

 

 

 

18.0

 

 

 

 

 

 

 

 

 

 

 

2,939

 

 

 

20

%

Renewable Power Generation

 

 

21

 

 

 

53

 

 

 

29.1

 

(7)

 

 

53

 

 

 

28.4

 

 

 

 

 

 

 

 

 

 

 

466

 

 

 

3

%

Subtotal

 

 

1,521

 

 

 

1,931

 

 

 

79.1

 

(7)

 

 

1,867

 

 

 

25.8

 

 

 

 

 

 

 

 

 

 

$

10,687

 

 

 

74

%

Tenant Lease Assignment only(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

154

 

 

 

213

 

 

 

49.3

 

 

 

 

195

 

 

 

18.3

 

 

 

 

 

 

 

 

 

 

$

1,333

 

 

 

9

%

Outdoor Advertising

 

 

24

 

 

 

25

 

 

 

59.7

 

 

 

 

25

 

 

 

15.0

 

 

 

 

 

 

 

 

 

 

 

196

 

 

 

1

%

Renewable Power Generation

 

 

2

 

 

 

2

 

 

 

74.8

 

 

 

 

2

 

 

 

6.6

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

%

Subtotal

 

 

180

 

 

 

240

 

 

 

50.6

 

 

 

 

222

 

 

 

17.8

 

 

 

 

 

 

 

 

 

 

$

1,535

 

 

 

10

%

Tenant Lease on Fee Simple

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

14

 

 

 

22

 

 

 

99.0

 

(7)

 

 

22

 

 

 

18.2

 

 

 

 

 

 

 

 

 

 

$

136

 

 

 

1

%

Outdoor Advertising

 

 

27

 

 

 

31

 

 

 

99.0

 

(7)

 

 

31

 

 

 

12.1

 

 

 

 

 

 

 

 

 

 

 

539

 

 

 

4

%

Renewable Power Generation

 

 

13

 

 

 

15

 

 

 

99.0

 

(7)

 

 

15

 

 

 

31.9

 

 

 

 

 

 

 

 

 

 

 

1,585

 

 

 

11

%

Subtotal

 

 

54

 

 

 

68

 

 

 

99.0

 

(7)

 

 

68

 

 

 

18.3

 

 

 

 

 

 

 

 

 

 

$

2,260

 

 

 

16

%

Total

 

 

1,755

 

 

 

2,239

 

 

 

76.6

 

(9)

 

 

2,157

 

 

 

24.7

 

 

 

 

 

 

 

 

 

 

$

14,482

 

 

 

100

%

Aggregate Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

1,236

 

 

 

1,592

 

 

 

74.6

 

 

 

 

1,522

 

 

 

27.1

 

 

 

96

%

 

$

1,838

 

 

$

8,751

 

 

 

61

%

Outdoor Advertising

 

 

483

 

 

 

577

 

 

 

83.8

 

 

 

 

565

 

 

 

17.6

 

 

 

98

%

 

 

1,754

 

 

 

3,674

 

 

 

25

%

Renewable Power Generation

 

 

36

 

 

 

70

 

 

 

39.9

 

 

 

 

70

 

 

 

28.5

 

 

 

100

%

 

 

9,779

 

 

 

2,057

 

 

 

14

%

Total

 

 

1,755

 

 

 

2,239

 

 

 

76.6

 

(9)

 

 

2,157

 

 

 

24.7

 

 

 

96

%

 

$

2,073

 

 

$

14,482

 

 

 

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, 2017 were 3.8, 8.8, 18.0 and 5.3 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, 2017. 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 66 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 83% of our tenants as of December 31, 2017.

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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

 

 

11

%

 

Crown Castle

 

 

12

%

 

Lamar Advertising

 

 

6

%

 

Southern California Edison

 

 

2

%

AT&T Mobility

 

 

10

%

 

American Tower

 

 

8

%

 

Outfront Media

 

 

6

%

 

Duke Energy

 

 

1

%

Verizon

 

 

9

%

 

SBA   Communications

 

 

2

%

 

Clear Channel Outdoor

 

 

6

%

 

Pacific Gas and Electric

 

 

< 1

%

Sprint

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

39

%

 

Total

 

 

22

%

 

Total

 

 

18

%

 

Total

 

 

4

%

 

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, 2017:

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

 

 

439

 

 

 

599

 

 

 

69.8

 

 

 

 

552

 

 

 

14.7

 

 

$

3,937

 

 

 

27

%

Towers

 

 

622

 

 

 

679

 

 

 

78.9

 

 

 

 

671

 

 

 

36.4

 

 

 

3,232

 

 

 

23

%

Billboards

 

 

483

 

 

 

577

 

 

 

83.8

 

 

 

 

565

 

 

 

17.6

 

 

 

3,674

 

 

 

25

%

Other structures

 

 

136

 

 

 

164

 

 

 

74.3

 

 

 

 

160

 

 

 

34.0

 

 

 

831

 

 

 

6

%

Equipment only(5)

 

 

41

 

 

 

153

 

 

 

75.1

 

 

 

 

142

 

 

 

14.3

 

 

 

756

 

 

 

5

%

Wind turbines

 

 

9

 

 

 

40

 

 

 

32.7

 

 

 

 

40

 

 

 

32.1

 

 

 

346

 

 

 

2

%

Solar

 

 

25

 

 

 

27

 

 

 

59.2

 

 

 

 

27

 

 

 

27.9

 

 

 

1,706

 

 

 

12

%

Total

 

 

1,755

 

 

 

2,239

 

 

 

76.6

 

(6)

 

 

2,157

 

 

 

24.7

 

 

$

14,482

 

 

 

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, 2017 were 3.8, 8.8, 18.0 and 5.3 years, respectively.

(4)

Represents GAAP rental revenue recognized under existing tenant leases for the three months ended December 31, 2017. 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 82 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 66 years.

6


Table of Contents

 

We are geographically diversified with assets primarily located throughout the United States, and no single state accounted for more than 15% of our tenant sites as of December 31, 2017. 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 longterm 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 hightraffic 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.

7


Table of Contents

 

The table below summarizes our real property interests by state as of December 31, 2017.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alabama

 

 

8

 

 

$

36

 

 

 

7

 

 

$

27

 

 

 

 

 

$

 

 

 

15

 

 

$

63

 

 

 

0.4

%

Alaska

 

 

9

 

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

38

 

 

 

0.3

%

Arizona

 

 

55

 

 

 

237

 

 

 

19

 

 

 

101

 

 

 

 

 

 

 

 

 

74

 

 

 

338

 

 

 

2.3

%

Arkansas

 

 

13

 

 

 

34

 

 

 

4

 

 

 

7

 

 

 

 

 

 

 

 

 

17

 

 

 

41

 

 

 

0.3

%

California

 

 

226

 

 

 

1,382

 

 

 

25

 

 

 

1,142

 

 

 

40

 

 

 

1,680

 

 

 

291

 

 

 

4,204

 

 

 

29.1

%

Colorado

 

 

46

 

 

 

243

 

 

 

4

 

 

 

9

 

 

 

 

 

 

 

 

 

50

 

 

 

252

 

 

 

1.7

%

Connecticut

 

 

36

 

 

 

241

 

 

 

7

 

 

 

37

 

 

 

 

 

 

 

 

 

43

 

 

 

278

 

 

 

1.9

%

Delaware

 

 

1

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

7

 

 

 

0.0

%

District of Columbia

 

 

2

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

16

 

 

 

0.1

%

Florida

 

 

76

 

 

 

561

 

 

 

59

 

 

 

208

 

 

 

1

 

 

 

12

 

 

 

136

 

 

 

781

 

 

 

5.4

%

Georgia

 

 

25

 

 

 

138

 

 

 

63

 

 

 

238

 

 

 

 

 

 

 

 

 

88

 

 

 

376

 

 

 

2.6

%

Hawaii

 

 

3

 

 

 

14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

14

 

 

 

0.1

%

Illinois

 

 

99

 

 

 

552

 

 

 

43

 

 

 

259

 

 

 

2

 

 

 

63

 

 

 

144

 

 

 

874

 

 

 

6.0

%

Indiana

 

 

5

 

 

 

26

 

 

 

20

 

 

 

42

 

 

 

 

 

 

 

 

 

25

 

 

 

68

 

 

 

0.5

%

Iowa

 

 

8

 

 

 

21

 

 

 

3

 

 

 

4

 

 

 

 

 

 

 

 

 

11

 

 

 

25

 

 

 

0.2

%

Idaho

 

 

6

 

 

 

14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6