KDC, the firm behind AT&T's new headquarters in Plano, is pursuing roughly $3.5 billion to fund construction of the multi-building campus. People with knowledge of the effort, who asked not to be named because they are not authorized to discuss it, said the borrowing would be tied to lease payments AT&T makes after the project is completed.
The structure is called credit tenant lease financing, where the loan is secured by rent from an investment grade tenant rather than the real estate itself. A report from PGIM puts most deals of this type in the $25 million to $100 million range, making AT&T's contemplated financing far larger than typical transactions.
The debt package is being put together by CGA Capital and CBRE. CGA did not provide a comment. AT&T, KDC, and CBRE didn't reply to requests for comment.
In February, the Plano City Council signed off on incentives stipulating that AT&T must put a minimum of $1.35 billion toward the project's construction costs for the headquarters. The current financing push offers a look at what the total build may ultimately run.
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AT&T told employees in January the campus will span 54 acres as it relocates from downtown Dallas. Wells Fargo & Co. and Caterpillar Inc. have made comparable choices, opting to construct sizable campuses in the city's suburbs.
This is a rare, outsized example of credit tenant lease financing in action. The markers to watch are the roughly $3.5 billion size, the expected 18.7 year weighted-average life, and the required $1.35 billion construction spend as CGA Capital and CBRE arrange the deal. The outcome will shape timelines and potential cash flows linked to AT&T's new campus.
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