At the time of Wells Hill's engagement, AT&T was in the process of contemplating how to improve its balance sheet through the restructuring and disposition of its real estate portfolio, as well as reassessing its corporate real estate needs.

After completing a broader review of AT&T's surplus property portfolio, Wells Hill was retained to devise and implement a plan to resolve certain of AT&T's major real estate joint ventures. One property of particular concern was the Town Pavilion office building in Kansas City, where the company leased, but did not completely occupy, a one million square-foot tower.

The goal was to mitigate the cost of AT&T's lease. Following a review of a variety of options identified for AT&T, Wells Hill recommended and implemented a plan whereby AT&T offered to assist the landlord in the refinancing of the building, and, in return, the building's owner agreed to master sublease AT&T's excess space.

Wells Hill devised a 428,000 square-foot master sublease while concurrently structuring and negotiating a comprehensive tax- and accounting-sensitive recapitalization of Town Pavilion. Over $20 million of new equity was invested, and AT&T's primary lease was modified and used to support a $145 million private bond issue, the proceeds of which paid off the majority of the building's original first mortgage.

To accomplish these interrelated transactions, the project was divided into three bankruptcy-remote condominium elements, a new 450-car garage was approved and financed, and a complex combination of escrows were funded. In addition, all remaining AT&T obligations were defeased in the swap market. The combination of transactions resulted in AT&T's accountants recognizing approximately $50 million in savings and accordingly releasing that amount from reserves.

AT&T has engaged Wells Hill on subsequent assignments.