RADI (2021 - Q2)

Greetings, and welcome to Radius Global Infrastructure Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. as a reminder, this conference is being recorded. I'd now like to turn the conference over to your host Mr. Jason Harbes, Head of Investor Relations for Radius Global Infrastructure. Thank you. You may begin. Jason Ha

Thank you, operator, and welcome everyone to the Radius Global Infrastructure second quarter 2021 earnings call. On this morning's call Bill Berkman, our CEO and Co-Chairman will provide an overview of our second quarter results, followed by a more detailed updates from Glenn Breisinger, our Chief Financial Officer. After these comments, we will open up the call to your questions. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under Federal Securities laws. As described in our earnings release and filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed. These statements speak as of today's date and we undertake no obligation publicly to update or revise these forward-looking statements. In addition, on today's call, we may discuss certain non-GAAP financial information. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in this morning's earnings release and the supplemental financial information available on our website, www.radiusglobal.com. And now I'd like to turn the call over to Bill.

Thanks, Jason. Thank you all for joining us today for Radius' second quarter 2021 earnings conference call. I am pleased to report that in the second quarter we maintained robust quarter-over-quarter growth exceeding $100 million in annualized in-place rents. This is a substantial accomplishment for the company, and I'd like to acknowledge the hard work of all of our team across the 19 countries in which we operate for this collective achievement. From the moment Radius became a public company, approximately 18 months ago, we embarked on a mission to significantly increase our scale, which we are in fact doing, and for which I thank our entire team again for their tireless efforts. Turning to our financial results. We generated revenue growth of 54% in the second quarter over the prior year period through disciplined capital deployment and organic growth from the portfolio. We remained optimistic about our ability to continue acquiring durable cash flow streams generated from real property interests, at the current quarterly pace through the remainder of 2021. During the quarter, we deployed approximately $125 million of Acquisition Capex, continuing the trend that accelerate capital deployment we began in the fourth quarter of 2020. This capital investment represents the acquisition of $9 million in additional rent increasing our total annualized in-place rents to a run rate of $102 million, a year-over-year increase of 60%. We are seeing the benefits of increased scale as larger acquisitions of recurring rental revenue continues to drive operational leverage against our origination platform costs, which Glenn will discuss in greater detail shortly. During the quarter, we raised $275 million of capital to support our acquisition strategy, which has continued to broaden from wireless only sites into adjacent digital infrastructure assets with similar characteristics. Although, we've seen increased competition to acquire assets in certain markets, we expect our recent acquisitions to generate mid-teen levered returns. As we share with you in our last earnings call, the range of digital telecom infrastructure assets we are selectively acquiring and others we are evaluating continues to expand. Our extensive multi-national origination networking team is uncovering mission-critical digital infrastructure assets from our core leasehold interested digital antenna systems or DAS, and to fiber connection rich communication aggregation sites or points of presence. All of the acquired assets have broadly similar attributes and underwriting criteria that we adopt. Specifically, they represent long duration, low risk, triple net rental streams pay by the world's largest communications operating and infrastructure companies. In June, Radius Global Infrastructure was added to the broad market Russell 3000 Index, the small-cap Russell, 2000 Index as well, and the Russell Microcap Index. We are pleased to be included in these indices, which we expect will increase our visibility in the investment community. Glenn Breisinger, our CFO, will now provide an overview of our current holdings and financial results in more detail. Glenn?

Thanks Bill. We continued to grow the portfolio at an elevated pace in the second quarter, taking advantage of investment opportunities across our footprint to deploy capital. As of the end of the second quarter, we owned 5,868 sites with 7,748 lease streams, represented by a tenant base comprised of 40% tower companies and 60% mobile network operators, the vast majority of which are investment grade. With respect to our annualized in-place rents 39% are denominated in euros, 20% in British pounds, 18% in U.S. dollars and the remaining 23% in other currencies. Revenues were up 54.3% to $25 million in the quarter and gross profit, or ground cash flow, rose 52.2% to $24.5 million resulting in a gross profit margin of approximately 98%. In the second quarter, we generated 3.9% growth from escalators and other organic growth, offset by 1.2% of gross churn, resulting in net organic growth of 2.7% on a year-over-year basis, which compared to 2.8% net organic growth in the second quarter of 2020. As Bill mentioned earlier, we deployed $125.4 million for Acquisition Capex in the quarter compared to $35 million last year, representing a 258% increase and up from $107.8 million in the first quarter. This level of deployment added $9.2 million in rent generated from 214 new sites across 282 new lease streams. We anticipate these new lease streams will generate a fully burdened initial cash yield of approximately 6.8% in line with the year ago level. With the continued growth of our portfolio, we are seeing the benefits of greater economies of scale from our acquisition platform. The multiple of origination SG&A to rent acquired declined to 1.2X in the second quarter versus 3.4X in the prior year period. We expect that this trend will continue as we deploy incremental capital and leverage the platform. Turning to our balance sheet and liquidity. At June 30, we had $894 million in total gross debt outstanding and net debt of $617 million. The debt carries in weighted average cash coupon of 4.1%. Overall, our debt has a weighted average term of 6.2 years and our first maturity of $75 million is in 2023. In the quarter we issued $75 million in junior debt secured by U.S. rental streams at 98.25, with a 6% cash pay maturing in April, 2023. We also raised $200 million of common equity in PIPE transaction in May. As a result of the debt and equity financing, the company had $337 million of liquidity available for incremental investment as of quarter-end. Please refer to the supplemental materials posted to our website this morning for the additional details. Bill?

Thanks, Glenn. That concludes our prepared remarks. Operator, please open the call for questions. Thank you.

Thank you. At this time, we'll be conducting a question-and-answer session. Our first question comes from the line of Sami Badri with Credit Suisse. Please proceed with your question.

Hi. Thank you for taking my question. I just first wanted to start with just an assessment of the competitive landscape that you guys are navigating now. I know your business has been in the public spotlight. Some of the other tower industry constituents are probably seeing the successes that you've been having, consolidating a very highly fragmented and global business. Could you kind of -- or opportunity, could you just give us a bit of a summary on some of the competitive dynamics that you're seeing and maybe just give us Europe and North America a little bit separately, just so we can understand the two different environments in each region.

Sure. Thanks Sami. And good question, I would have to say. Look, every country is different. Every -- the actual market landscape in each country is different. And what I mean by that is you have a movement where the MNOs, the mobile network operators, are shedding their towers or selling them to tower companies in the countries where that has yet to occur. It's obviously usually less competitive, because typically the MNOs don't spend the time or the capital to compete against us and acquire sites. When it does occur, as we all watching in cross most of the European countries, yes, we have more competition. Typically, the tower companies try to acquire properties underlying their sites in competition with us. Now, the funny thing is the market is so enormous that we will come across them in a competitive bidding environment to buy a site. But there are times, significant times where we don't just because for whatever reason, they didn't get to this landlord when we got to the particular property owner or vice versa, so that we expect to continue going forward. We expect we will continue to be successful. We expect that the extent of our success is still uncertain given what other things can happen in the market. But as we look at where we're going, we think at the very least we should remain in the ability to acquire what we've been acquiring to date. And then on top of that, we add new countries that we intend or hopefully expect to open, as well as new approaches to acquiring assets, which can range from different types of offers and different types of marketing approaches such that we can be a better competitor and access the asset, meaning acquiring the asset at a acceptable return for ourselves. I think -- yeah, I think that's basically how I would frame it.

Got it. Got it. One other follow-up is, has -- when you were approaching sellers for land interests and historically, maybe you guys were maybe the only party or the only buyer in the market, trying to quote the seller of the land interest. Have you seen now an increase in the number of potential offers that these same land interests are currently garnering? Are you seeing more people coming to the table and submitting offers?

We typically either -- if there's really two buckets to your good point, it's just us alone. And oftentimes it may take two or three years before a property owner says, yes, I'm ready to sell now because they typically sell, if you were member when they need capital. The second bucket would be, yes, it would be ourselves. And typically the -- if there's now a tower company, that's operating the steel on top of our -- on top of that property, it would be that tower company competing with us.

Okay. Got it. Got it. And then just my last question is …

But just to remember one thing, if you're -- because when I say, Sami, that if you're in a market such as France, there's 60,000 sites and you've got 20,000 sites, if you're the largest and assuming tower company, that's a lot of sites and a lot of people to reach, and it's never as efficient as you think, so that they always know that they should be being against us to buy that property. So, it's just oftentimes they didn't reach that landlord in time. And there are times when we didn't reach a landlord that they may acquire in time.

Got it. Got it. Thank you for that. And then, just my final question has a lot to do with the fully burdened unlevered yield, that the company targets to achieve. Your growth rate since you became more formalized as an independently listed public company has obviously been a lot higher than what a lot of us were computing. Have there been any changes with your targeted corporate, fully burdened, unlevered yield range that you're -- you guys are trying to achieve or produce?

No, I guess, the way we measure it is it's not just on our yield, even though we report it that way. In some of the alternative assets, which we really view as the same exact mission-critical durable revenue stream, you will know that the property right that we're acquiring is typically fee simple or 99 years. In other places where we're buying, the wireless related rooftop or ground underneath a ground-based tower, that can range from fee simple or 99 years and can be as short. And some of the Latin American countries is 30 years. So, obviously, you would see and say to yourself, if it's a 30-year one, the actual yield will be higher than the underlying net present value because you're only going out 30 years. Now, we always thought that it's 30 years. We have in year 10 or year five, the ability to always go back to the property owner and buy extra years whenever we want, it's sort of an embedded option, even though it's not formalized.

The other thing I'd add there, Sami -- sorry. It’s Glenn Breisinger. I add there is, in Q2, I'm sorry, the second quarter, second half of the year for 2021, our purchase term was 84 years versus 58 years in the prior period. And then, you're seeing our percent of escalators that are inflation based or market based are moving up to 76% from 70%. So that's going to drive delevered returns.

Thanks, Glenn.

Got it. Got it. Thank you.

Thank you. Our next question comes from the line of Walter Piecyk with Lightshed. Please proceed with your question.

Hey, Walt.

Hi. What's going on Bill? Hey. The escalations line, it seems to kind of bounce around a little bit, obviously very good this quarter at three, over 3%. At first I thought it was like kind of a rounding error because you gave like one decimal, but then I see actually in your report, show it at 3%. So, like our experience with tower companies is that typically a pretty stable number. Like, what makes that move around or what was it in the given quarter in terms of mix of assets that drove that up? And is -- I guess most importantly is, can 3% be the new norm when you look at your business going forward?

I think, just to remind you -- I was going to say just at the high level to remind you how the escalators work. As Glenn mentioned, many of our countries are inflation based and every country is different. So, you're going to see some variability in whatever the inflation measure was. That's the first part of the escalator. The second part of the escalator would be increases from lease expiration with our tenants being a tower company or a mobile network operator, where when we go to renew and have that negotiation, you'll get a bump up if it's below market. So that's another contributor to, I guess, the variance in lease-up, when you think about your escalator. I don't know if you're breaking it out from our organic growth versus the actual escalator. If it's just the escalator you're focusing on, yes. 3% fixed in the U.S. and it's inflation link because that's going to vary. Plus you've got some FX movement too.

Got it. And then, also in the release, you talked about -- obviously huge origination again this quarter. So, I guess the first part of that question is like, is this the new normal on origination. But more importantly, when you talked about raising the additional capital, and you talked about broadening from wireless only sites into adjacent digital infrastructure assets with similar characteristics. You may have touched on this a little bit last quarter, but you can just kind of refresh our memory on what are these adjacent digital infrastructure assets that are kind of mixing into the portfolio.

I know it's a mouthful. Do you have a better way for us to frame it from …?

No. I think it's good. I think it's good.

Yeah. Let me handle. But, yeah, I think, specifically it would be -- as an equivalent, I'll give you an example. We would buy the hospital's revenue stream they received from two or three mobile network operators to put a distributed antenna system within a hospital. So that would be an example. So, we're buying the same type of rent from the three operators that we would typically get. If we were just owning the ground under a tower, it just so happens that we're buying the distributed antenna driven rent, which is long-term and contractual. So, we don't really -- in our mind think it's any different, but technically I guess you would say, well, let's see indoors, if that makes sense. Another example would be a fiber -- I am sorry.

No, no. Yeah. That makes sense. Go on.

Yeah. So that's why we haven't really broken it out, it’s the same thing to us. And then, the other would be a fiber aggregation point where you've got a meeting point where multiple networks, including the largest MNOs come together, fiber gets connected. We used to call it either an MTSO, but it's really basically a routing point as they interconnect right there. Typically, these are in structures. So, we have -- we're actually owning the physical structure. Oftentimes there be a cell site on the roof. So, we would get that too. It's the reason we haven't broken it out. Those are larger scale assets than we typically would acquire on a wireless site. And as a result that has been driving a lot of our alternative -- sorry -- our adjacent asset acquisition. So, we'll see that in a lot of places. I'm trying to think what else. We have bought -- let's see, we most recently bought a data center that is hosting medical information, and oftentimes these have cell sites on the roof. This one was in a particular country, it’s sort of mission-critical, it's terrific site with a great structure. Again, I want to remind you that it's all triple net lease.

So, what's interesting about all of these things that you've described, is that it seems to me that on the surf -- like, yes, you have what you call revenue enhancements growth, which in kind of tower lingo is the colo and amendments, right? The incremental growth is organic.

All that organic. That’s just organic.

Right. Whatever the words are, it's the extra stuff, right? So, when I think of land, obviously there's opportunities for shelters and other things that drive some of that growth. But when I think about -- when -- with what you described, it seemed like there might be more opportunity for those additional growth on existing assets, organic revenue, revenue enhancements, whatever you want to call it, is that true or is that not the way to look at it?

It's a great question. We spend a lot of time thinking about what are additional uses that our property rights permit us to actually do, and what can they be that could be in addition to the core activity, whether it's a wireless tower, antennas on a rooftop or in this particular case, data center structure, which may have a cell site on the roof. I'd like to say that there are a lot of things we've considered, nothing that we will come out yet and say, but I'm kind of determined to come up with something else that just adds value. But until we have one that we think the economics really work and it makes sense to us, we -- there's nothing to really talk about, but it's high on our -- I guess our think tank exercise. And there are lots of things that we have considered that one can put on a rooftop or the top of a structure. Let me say it that way. I don't mean to be coy, but we also don't want to alert our competitors to other things we're thinking about.

First -- the first example you provided though, where if it's a DAS and there's two operators in there. There's always an opportunity that I guess the third operator could come in there and if you own the hotel or the convention center or whatever it is as lease payments, and that would be incremental organic growth, which seems more logical than maybe someone putting a shelter on that -- on under -- the land underneath the tower.

No. That's correct. But I wouldn't say it's more logical. We often -- have an extra shelter. We often do get extra generator -- sorry, not an extra generator, but a new generator, that's put on a piece of property. We may have in some -- some countries, they may want to test other types of power generation, whether it's a solar or otherwise. There's lots of alternative things that can be put there, it could be a battery array. It could be a -- the diesel fuel tank that powers the generator. So, there is definitely uses.

Great. One last one …

And then the other one -- I'm sorry. I was going to say …

I am sorry.

… when you got tower, and you want to augment its capacity, in some countries you may want to go a little higher. You're going to maybe need guidewires and guidewires, as you remember, they go farther out in the plot of land, right, because they're sort of like the diagonal then a triangle. So they're going to need, if it's -- it start as a monopole and wants to convert to a guidewire tower, it's going to be more land.

Understood. Just one last one and sorry to other people on the call. But years ago, when Crown talks about Vapor IO and Sback had some deal with -- I don't even remember what company was -- that was, I think maybe PackIt, which is now I don't even .There was a lot of talk of edge compute and that could theoretically be something that you benefit from. But then it never really materialized. More recently DISH at Mobile World Congress had a lot to say, with Amazon, really the same concept, like putting physical products at closer to the edge at cell sites. And have you seen -- I guess sort of question is like, have you seen any of this anywhere in the world yet start to perk up? And is that something that you benefit from, or does that more a revenue opportunity for the tower companies?

No, I mean -- so number one, we haven't really seen it and certainly not in our numbers. It's going to get -- continue to get, I guess, a lot of talk. I'm somewhat skeptical, because what it's really solving is typically latency. And how many applications require latency differential between 10 miles, as an example with the speed of light. It's just not so much, but putting that aside if in the -- it should come and they need extra space, we will benefit.

Okay. Great. Thank you.

Thanks Walt.

Thank you. Our next question comes from the line of Jon Petersen with Jefferies. Please proceed with your question.

Hey, Jon.

Hey, thanks. Hey, how's it going?

Good.

I wanted to ask -- Bill, I think you said the $125 million of acquisitions in 2Q is a -- I think you said that's a good run rate for the rest of the year. I just wanted to confirm that, that was indeed guidance for the next couple of quarters.

Well, I think, we've been loved to give guidance too far out, because I think as I've said before, a, we've got visibility probably for a couple of quarters, but we're just pretty conservative in how we think about the world. I would say that -- I hate putting a number out there, but we're hopeful to repeat the quarter we've just had for the end of the year. I guess, in my mind, I'd keep it more simple and say, I'm thinking that through the end of the year, we probably could do about a $100 million and if we're optimistic better than that. So, it's just been -- it's been going really well and not just in terms of what we're investing, but, of course the returns that we're getting and the quality of the assets that we're buying in the countries that were most targeted on. And what we love Latin America, we do make sure that it's only a portion of what we do. Europe, of course, lately has been a big drive for us and it's going well, really well.

Got it. And so that was $100 million per quarter or $100 million spread over the next two quarters?

I just want to talk about to the end of the year. I think we would -- should be able to replicate this quarter is my hope, but I'd say a $100 million is my conservative way of reflecting it, not trying to sandbag or anything, but you never know if we do better.

Yeah. No, that's fair. And then just to get -- maybe a little more color on the acquisitions that you did do in the quarter. Can you break out like what percent was land under macro towers? How much was rooftop easements and how much was just other land under digital adjacent stuff?

Jon, it's a great question. We wrestle internally about when -- or if we want to actually do that. I was going to say is that we're not yet ready. And mostly because of competitive reasons, don't want to really detail to our competitors exactly what we're doing and how we're doing it. We recognize that we will very likely at some point go into more detail. But if it's okay with you, we're just not ready to share that for competitive reasons.

Okay. Same answer for geographic breakdown?

No. I think, geographic breakdown, we've -- Europe is definitely, as I mentioned before, probably our strongest push and drive, Latin America slightly less. Everything else was sort of in line with what we've done in the past. Glenn, correct me if I'm wrong?

Yeah. Sorry. I was on mute. Yes, that's correct. And you can see the trajectory through the annualized in-place rent slide -- on the -- that we break out in the supplement materials. So you can see that it is shifting from your -- from Latin to Europe.

Got it. Okay. Just one more question, speaking of competition, your competitors. Landmark Infrastructure seems to be in some sort of bidding war. That's probably your closest public peer. You don't have a pure public peer. But I'm just curious, any read-throughs or implications on kind of values of portfolios of land under digital assets out there and what that means for you guys? And maybe a follow-up, not that you guys might enter this bidding war, but does acquire a portfolio at some point makes sense for you guys to get to that -- to really kind of scale that G&A?

Yeah. I mean, I think two great questions. On the value of the portfolio, I think there's somewhat instructive. If you remember Landmark is different than us in that, it has a -- significant portion of their portfolio being billboards. And while we think they're a valuable asset and a good one, I think our belief is that they're just not worth the same as the mission-critical revenue streams we buy. Because oftentimes they are reflecting, not just contractual, fixed rents with an escalator, but a percentage of rent that they get paid from the outdoor advertising company. And as a result, you're tied to the economic health of the economy, which reflects, what happens with outdoor advertising. So, when you look at their mix, it's just different than ours. So, it's really hard to say apples-to-apples on evaluation. As to your second question, actually, I would say that, Melody sold its portfolio from what we understand for 26 or 27 times to Sculptor Capital and Diamond Tower -- Sculptor being the old ox, I guess fund in Diamond, I believe, is managing it and actually adds a sharp guy at Diamond, and that was a U.S. based portfolio. So that would be a good comparable and it was also mentioned to us, I can't confirm this, when American Tower bought Insight, we believe they paid around 26 times. If I'm not mistaken for the ground, that Insight, it also acquired in the U.S. So, those would be some comparable. In terms of, would it be helpful for us to buy portfolios? Sure. You bet. It would give us more scale, more property management efficiency and alike. And you would imagine that we've looked at a whole bunch of them, but they have to hit our return criteria and our quality of the assets that we're buying. Just -- we're -- actually, I would say we're very disciplined when it comes to that. In terms of the Landmark situation, I think, marked over -- DigitalBridge has done a terrific job in navigating clearly a complicated structure. And even though there's been other people trying to bid the price up, he has sole control as the GDP is when I looked at it. And I believe he has some other attributes that it's not -- if he acquires it, it's really just what price that he gets to with the conflict committee as I've read through it. And I think he did a good deal there. It was a complicated one, but he clearly is a terrific deal maker.

Okay. I appreciate that. Thank you very much.

Sure.

Thank you. Our next question comes from the line of Rick Prentiss with Raymond James. Please proceed with your question.

Hey, good morning, Rick.

Hey, good morning, guys. Sorry. I had to join the call in progress. We're at our Park City Summit. So, I've been listening through.

Which I wanted to be. Yes. I'll let you know that. I'm so sorry.

No worries. A couple of follow-on questions. Obviously, we're all monitoring the Delta variant in COVID-19. So, hope you and family, friends, employees are doing well. But how does it affect the M&A environment? How are landlords and owners dealing with COVID? How are you guys dealing with COVID as far as the flow internationally?

Look, I think, it's a great question. And I would say to you in the countries where culturally people like to do transactions face-to-face, it has impacted us specifically in Latin America. We just have been able to originate less, because people like to get deals done person-to-person. In the other countries, I would say common law, it really hasn't impacted us. In some of the civil law, you wouldn’t be go out and get a note only in-person, but even at the height of COVID, we've had -- our teams have been just really talented at navigating that and getting the proper notarized signature that they require. So, I'd say Latin America is the one place that we've really noticed that, but not really elsewhere.

Okay. Obviously, you've alluded to a couple of times, new countries maybe entering them, thinking in the past, you've mentioned get your sea legs walk before you run. How should we think about the pacing of when you might enter new countries and how that affects the SG&A ramp?

Yeah. That's a great question. Every new country we enter should typically impact the SG&A, but we've been trying awfully hard that when we enter, if we can, I guess already having hand a bunch of deals, so it mutes it a bit. That's been sort of one of our goals. We are beginning to get up and running in a couple countries. I don't think we'll announce that we're in them for a while again, for competitive reasons. There's no reason to alert our competitors that we're there. But yes, but we have a whole bunch of them that we should have open. And if our organic SG&A should increase, that's just the -- it's an investment to us. Just like when I look at organic SG&A, I always view it as an investment in growth CapEx even though the accountants call it SG&A. The good news is, of course, we get to deduct that SG&A from our any potential tax bill that we would have. But that's why EBITDA is less of a measure for us. We really focus ourselves on run rate ground or run rate rents as a triple net rent buyer.

Okay. Final one for me is, obviously we're all watching the interest rates bounces around, the tower stocks are fairly correlated to interest rates, not just growth rates of business. How are you guys viewing it? Where do you see interest rates heading, and how does inflation impact your business?

Right. So, it is the seminal question for almost -- for most businesses out there that, A, use leverage and grow or grow effectively with the impact of inflation interest rates, because they're completely detached at the hip. The way we've always viewed it as acquiring inflation-linked rents is a way to mute interest rates. So, when Glenn got on the phone and said 75%-plus of our rents are inflation-linked, that's pretty terrific. What I would also point out is if you look at Cellnex, typically their inflation-linked rents are capped. I'm not going to say all of them, but when I've read through their annual reports, you'll see that they get capped. I want to say a 2%, but I'd have to confirm that. Ours are open-ended and I've always felt that inflation linker or that option to get that growth from inflation has been undervalued and underappreciated in the market. But that is more of a mathematical discussion we could talk about. Then the other thing to remind you is when trying to keep this simple, is that when interest rates will rise, if a central bank wants to try to -- sorry -- inflation should rise, a central bank will typically want to raise interest rates. So that -- and there's a lag time between that, but we've always felt that if interest rates go up, we are nicely hedged with that inflation-linked bond. It's not to say that we won't be impacted by inflation rates because investors, for whatever reason may not know the actual -- the real underpinnings of what devalues event, inflation linker, hence my original point. But we feel pretty good about this. The last thing was, given interest rates across is, we're right now levered above six times at our holding company level, approximately, I want to say, 8.5 or so at the subsidiary AP Wireless level. When I think about leverage, I guess even inside our shop, the more leverage we put on, speaking simply the more equity we're taking out. So that means less of your equity is now exposed to any interest rate movement. So, we're not nervous, but we were always disciplined of how much leverage we put on, but we really wanted to hedge ourselves. That would be the simplest way, which is just to lever even more, so long as it was non-recourse to a particular country to set up country. Does that make sense?

Yeah. It does. Appreciate the color guys. Thanks.

Hey. Thanks, Rick. Have a good conference.

Thank you. Our next question comes from line of Simon Flannery with Morgan Stanley. Please proceed with your question.

Hey, Simon.

Thank you very much. Good morning. How are you? Bill, you talked about some very strong origination volumes. Can you give us some sense of the scale of the platform? I don't know if it's something like quota bearing headcount, or just how has that scaled over time and what are your projections there?

Right. I think our headcount hasn't necessarily changed dramatically. What has been changing is our ability to source and acquire the alternative adjacent assets that I mentioned in answering some of the earlier questions. That's been pretty terrific. And I'd say this has been just an incredible quarter for us. And our team is just doing a great job. We joke internally that it's like we have our CIA intelligence agents out there, looking for what we thought where $100,000 deals, but some of these alternative asset classes, like the aggregation points for fiber or the indoor distributed antenna systems at a hospital, as I mentioned, they're just larger ticket deals and that's been just really benefiting us.

So you got any more productivity. But I guess to get into, if you wanted to go into some new countries or whatever, you might want to add resources for that, is that fair?

That’s correct. But we're trying -- if we can, give me a new countries to -- if you were in France, can we also assist our team in Belgium with some of the French team that we have? Those are the types of things and overlaps we look for. I think that wasn't the best example, but we have other countries that we try to expand out to something that's on the border to see if we can use that team to assist us in the -- at other country. The other approach is sometimes finding local agents that can assist us where they are not part and parcel of our team. That being said, when we do open new countries, it does have an investment to get it up and running.

Yeah. Okay. And then, one of the big themes over the last couple of quarters in the tower space has been build-to-suit. We're seeing a lot of interest in Europe now with Drillisch in Germany. And then, it's obviously been big in Brazil and parts of Latin America for a long time, India. It does that create opportunities for you or do the tower companies kind of deal with the land at the time that they're kind of were helping to find those sites, et cetera.

It's a great question. And actually we've been adding to our team to hopefully be able to put ourselves in the position to initiate a build-to-suit platform. We don't have any need to report because we've only do it when we get a contract up front, there's no fuel to dreams in a way we view the business -- in the way the tower guys view the business. But I do think there's opportunities. Interesting in Europe and I'm sure you're well aware. Oftentimes, the carrier itself will do the build and then they'll sell it at the end once it's constructed to the actual tower company. We've seen that with Cellnex when they're buying these assets and bundling them with a build-to-suit contracts. Now that being said, I do think there's still an opportunity for us to win a whole bunch of contracts. And hopefully at some point we'll have somebody report on it, but we have to get a little lucky and we have to win contracts.

Great. And just one last one. You talked about your interest in Latin America, but you're kind of -- it sounds like you've got a little bit of emerging market kind of quota, if you like. So, what's the right way to think about your mix between developed and emerging over time?

I think, we've not really wanted to go greater than 20% from an emerging perspective. That being said, we -- when you have Chile, as an example, which is part of OACD, it's just slight -- it is just different than Mexico -- sorry, not Mexico, but then Brazil and Columbia. And so, we've had good experience in Chile. And so that would be an example of how we look at. But I don't see it going greater than 20%. Now the nice thing is that we've been buying so much in Europe, that Latin America continues to get smaller as a piece of the overall whole. And as I mentioned to Rick Prentiss, because of COVID, we were not able to acquire as much as we were expecting in Latin America, but, of course we made up for it in Europe, in spades.

Right. Thanks a lot.

Thanks Simon.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Berkman for any final comments.

Thanks operator. And thanks everybody for joining us. We look forward to hosting you for our next earnings call and I hope everybody stays safe and manages through both COVID and this Delta variant. Thanks very much.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.