Free Writing Prospectus Filed Pursuant to Rule 433
Relating to the Prospectus dated March 10, 2016
Registration No. 333-209533
Explanatory Note: This Free Writing Prospectus supersedes in its entirety the Landmark Infrastructure Partners LP Unit Exchange Program Free Writing Prospectus originally filed by Landmark Infrastructure Partners LP on March 11, 2016.
+++
LANDMARK INFRASTRUCTURE PARTNERS LP UNIT EXCHANGE PROGRAM (UEP™)
Issuer: Landmark Infrastructure (Nasdaq: LMRK)
| 1. | Background |
Landmark Dividend (“Landmark” or the “Company”) is a national industry leader in acquiring the real property interests underlying essential infrastructure assets. Landmark’s management team pioneered the ground lease acquisition industry in 2002 and has successfully closed over 5,000 transactions. In November 2014, our affiliate, Landmark Infrastructure Partners LP (Nasdaq: LMRK), a growth-oriented master limited partnership (“MLP”) formed to acquire, own and manage a portfolio of real property interests leased to companies in the wireless communication, outdoor advertising and renewable power generation industries, became a publicly traded company. As of September 30, 2017, the Company managed a portfolio of over 3,000 assets held at Landmark, its multiple private funds and LMRK. Landmark currently operates in the United States, Australia, United Kingdom and Canada and is actively seeking acquisition opportunities. LMRK will be the issuer of the UEP units. For more information, please refer to www.landmarkdividend.com and www.landmarkmlp.com.(1)
| 2. | Unit Exchange Program Overview |
Many property owners don’t sell their assets because they don’t want to incur taxes on the sale or they don’t know what to do with the cash proceeds. The Landmark Unit Exchange Program or UEP™ directly addresses these two issues.
With our UEP, the property owner contributes the asset in exchange for units in LMRK, the public MLP, rather than receiving cash. Gain on the contributed assets may potentially be tax-deferred and the proceeds of the sale are now efficiently invested in a large, diversified, growing pool of assets similar to the one just sold. It is possible, however, that the exchange will be taxable to you even if you receive no cash in the exchange. We recommend you consult your tax advisor regarding the tax consequences to you of the proposed transaction.
The UEP provides the seller with a number of significant advantages:
| • | Attractive Pricing for the assets; |
| • | Potential Tax Deferral of gain or loss on the assets; |
| • | Significant Diversification given that the seller would now own an undivided, percentage of a large diversified growing pool of similar assets instead of 100% of a single asset with all of the attendant risks; |
| • | Continued Current Cash Flow through the quarterly LMRK distributions (to the extent the board of directors of LMRK’s general partner determines that LMRK has available cash (as defined in its partnership agreement)); |
| • | Liquidity (the holder of the units may sell at a later date of their choosing); |
| • | Attractive Investment Alternative as the seller rolls into units in a publicly-traded company; |
| • | First-Loss Protection: LMRK has a class of units which is subordinated to the common unitholders which may, for a period of time, provide a cushion against future losses and unforeseen decreases in the distribution; and |
| • | Streamlined Documentation for the transaction. As a securities offering, documents are set, eliminating the time and expense of negotiating provisions. |
| (1) | Information on the websites is not incorporated herein by reference. |
| 3. | Landmark’s Asset Acquisitions |
Landmark purchases with its own capital long-term (30-60 year and perpetual) ground lease property rights underlying billboards, cell towers and renewable energy assets. Landmark pools these assets into diversified portfolios and then transfers these assets to LMRK, providing investors with attractive risk-adjusted returns and significant additional benefits.
| • | Mission-Critical Infrastructure - These assets are essential to the tenants’ business operations resulting in very stable historical performance and minimal net default rates; |
| • | Triple Net Leases - Tenant pays real estate taxes, insurance, maintenance and utility expenses; |
| • | High-Quality Tenants - Tenants are primarily large, publicly-traded companies or their affiliates; |
| • | Vast, Growing Industries - Estimated $100 billion market, growing ~ $10 billion per year; |
| • | Comprehensive Asset Underwriting - Landmark performs rigorous site-by-site underwriting including credit, location, tenancy, competition, market demographics and physical site review. |
| 4. | Example of Pre-Tax and After-Tax Cash Flow With a Tax Shield |
The examples below show pre-tax and after-tax returns using an asset with a capital gain of $1,000,000. Scenarios A and B illustrate how the Capital Gain Tax reduces investment proceeds and the After-Tax Return % after the asset is sold and a Capital Gain Tax is paid. For Scenario C, the After-Tax Tax Cash Flow and After-Tax Return % are shown after the effect of $40,000 of non-cash deductible expenses (depreciation) and is applied to the Pre-tax Return.
| Scenario: |
A Hold Asset |
B Sell Asset & Reinvest |
C Alternative Investment (with Tax Shield) |
|||||||||||||||||||||
| Principal Investment or Asset Value |
$ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | ||||||||||||
| Capital Gain Tax on Sale (30%) |
$ | 0 | $ | (300,000 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
| After-Tax Investment Proceeds |
$ | 1,000,000 | $ | 700,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | $ | 1,000,000 | ||||||||||||
| % Return on Principle (example) |
8.0 | % | 8.0 | % | 8.0 | % | 7.0 | % | 6.0 | % | 5.0 | % | ||||||||||||
| Pre-tax Return |
$ | 80,000 | $ | 56,000 | $ | 80,000 | $ | 70,000 | $ | 60,000 | $ | 50,000 | ||||||||||||
| Non-Cash Deductible Expenses (Tax Shield) |
$ | 0 | $ | 0 | $ | (40,000 | ) | $ | (40,000 | ) | $ | (40,000 | ) | $ | (40,000 | ) | ||||||||
| Pre-tax Income |
$ | 80,000 | $ | 56,000 | $ | 40,000 | $ | 30,000 | $ | 20,000 | $ | 10,000 | ||||||||||||
| Ordinary Income Tax % |
40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | ||||||||||||
| Ordinary Income Tax $ |
$ | (32,000 | ) | $ | (22,400 | ) | $ | (16,000 | ) | $ | (12,000 | ) | $ | (8,000 | ) | $ | (4,000 | ) | ||||||
| Income After Taxes |
$ | 48,600 | $ | 33,600 | $ | 24,000 | $ | 18,000 | $ | 12,000 | $ | 6,600 | ||||||||||||
| After-Tax Cash Flow |
$ | 48,600 | $ | 33,600 | $ | 64,000 | $ | 58,000 | $ | 52,000 | $ | 46,600 | ||||||||||||
| After-Tax Return % |
4.80 | % | 3.60 | % | 6.40 | % | 5.80 | % | 5.20 | % | 4.60 | % | ||||||||||||
Disclaimer: Landmark does not provide tax advice. It is important that you consult a professional tax advisor regarding your individual tax situation. Examples are illustrative only to show how capital gain tax and a tax shield can affect a hypothetical investment. The information on our websites is not offering information and should not be relied upon by any investor.
| 5. | UEP™ Addresses Key Asset Sale Concerns |
Reasons to Sell Your Asset
| • | Get Liquidity & Cash |
| • | Reduce Risk through Diversification |
Reasons Not to Sell Your Asset
| • | Taxes on the Sale |
| • | What to do with the sale proceeds |
UEP Addresses All Concerns Above
| 6. | About Master Limited Partnerships (MLPs) |
| • | An MLP is a publicly-traded partnership that must derive 90% of its income from real estate, natural resources or commodities. |
| • | MLPs were first created in 1981 to provide capital to the oil and gas industries. |
| • | As of October 31, 2017, there were more than 100 MLPs in the U.S. with an estimated aggregate market capitalization of approximately $370 billion. |
| • | MLPs typically possess a significant “first loss” investment made by the sponsor which serves to protect the common unitholders from unforeseen losses. |
| • | As partnerships, MLPs generally don’t pay corporate-level federal income taxes so MLP investors don’t suffer double taxation on quarterly distributions they receive (which often are not immediately taxable, in whole or in part, due to tax deferrals). |
| 7. | Landmark Infrastructure Partners LP as of 9/30/2017 | Number of Leased Tenant Sites: 2,099 |
| 8. | The Closing Process |
| • | The UEP™ transaction typically takes 45-75 days to close. |
| • | In order to complete the transaction, a Letter of Intent is executed by all parties. |
| • | The asset purchase transaction is managed the same way it would in a cash sale. |
| • | Information about LMRK is provided to the property owner. |
| • | Before closing, the price per unit is calculated using a volume-weighted average price over a specified period of time. At closing, a UEP document package will be delivered to you and executed. |
| • | At the time of closing units in LMRK will be distributed. |
Contact Info
Jeffrey Knyal - Vice Chairman
O: 310.294.8190
jknyal@landmarkdividend.com
www.landmarkdividend.com
2141 Rosecrans Avenue | Suite 2100
El Segundo, CA 90245
Disclaimer: Before deciding to participate in the UEP, you should carefully read LMRK’s most recent Annual Report on Form 10-K, including the risk factors set forth therein, and subsequent quarterly and current reports filed with the Securities and Exchange Commission. If any of the risks discussed in such reports were to materialize, LMRK’s business, financial condition, results of operations and cash flows could be materially adversely affected and you could lose all or part of your investment.
LMRK has filed a registration statement (including a prospectus) on Form S-4 (File No. 333-209533) with the Securities and Exchange Commission for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents LMRK has filed with the Securities and Exchange Commission for more complete information about LMRK and this offering. You may get these documents for free by visiting EDGAR on the Securities and Exchange Commission website at www.sec.gov. Alternatively, LMRK will arrange to send you the prospectus if you request it by calling toll-free 1-800-843-2024.