Everest Infrastructure Partners: The Phoenix of Tristar Investors?

Illustration of Phoenix Rising from AshesHISTORY OF TRISTAR INVESTORS

Back in 2008-2013, a company called Tristar Investors was attempting to acquire ground leases under American Tower Corporation (AMT) and Crown Castle (CCI) cell towers. They had some success acquiring the leases using a unique acquisition model where they would "buy out" the tower ground lease by paying the landowner an additional annual or monthly payment above and beyond their current rent through the expiration of the cell tower lease. Tristar would then offer the landowner 50% of any revenue from the operation of the tower after the expiration of the lease. The marketing pitch? At expiration, Tristar assumes ownership of the tower and the landowner becomes a "partner" in the revenue generated on the tower. This was an effective pitch to landowners, and our best guess is that Tristar acquired 300-500 leases under valuable multi-carrier towers.   

In 2013, Tristar settled litigation with American Tower and after that, they shut down. We surmise that Tristar agreed to non-compete and non-solicitation language in their agreements that barred them from purchasing leases from under American Tower. We also believe that Tristar executives previously agreed to language with Crown Castle that provided for similar restrictions on acquiring Crown Castle leases.  

THE RISE OF EVEREST INFRASTRUCTURE PARTNERS

Flash forward to 2017 and it appears that these non-compete/non-solicitation agreements have expired, because a landlord of ours with a multi-carrier American Tower Corporation tower received a purchase offer from a company named Everest Infrastructure Partners that looks suspiciously like previous offers from Tristar Investors. Upon further review of the signatory and the agent who contacted our property owner, it appears that someone has gotten the old Tristar team together and is now attempting to acquire leases under the Everest Infrastructure Partners name. Both the agent and signatory list previous positions with Tristar in their LinkedIn profiles .  

Here is what the offer from Everest looks like: 

Everest Infrastructure Partners, Inc. (“Everest”) is pleased to present to you (“Owner”) this offer letter (“Offer”) for Everest to acquire an easement to the cell tower real estate you own at _____________________(“Property”).    

1. Current Lease.  The Offer is based on the following terms of the current lease for the cell tower operated on the Property:

Current Rent:   $xxx.00 /month    Final Lease Expiration: xx/xx/xx

2. Payment to Owner.  Everest will pay to Owner the sum of xxxxx Thousand and No/100 Dollars ($xx,000.00) per year until the expiration of the Current Lease.  Owner will keep all rents generated by the Current Lease until expiration. Additionally, commencing at the expiration of the Current Lease, Everest shall thereafter pay to Owner ongoing payments equal to Fifty Percent (50%) of the rental revenues received by Everest from any lessee(s) of the Property.

 3. Easement. In exchange for the consideration above, Everest will be granted an easement to the property. The easement area shall be the portion of the Property currently leased for wireless telecom use, and shall include access and utility easements thereto. 

RECOMMENDATIONS FOR CELL TOWER LEASEHOLDERS

There are a few concerns that landowners should have about this offer. First, a landowner who receives this offer should clarify with Everest whether they intend to take over the ownership of the tower at expiration, whether they plan to sell the lease back to the tower company, or whether they expect to renegotiate the lease with the tower company and take 50% of the rent for doing so.   

In the first scenario, these types of offers can be attractive to landowners. Our clients who previously sold to Tristar were generally better off for doing so.  

In the second scenario, we believe the landowner is better off just selling or renegotiating the lease with the tower company. Otherwise, at expiration, if Everest sells the lease to the tower company, the tower company could just decide to offer below market lease terms and the landowner would get the very short end of the deal.   

In the third scenario, we also believe that the landowner is better served by selling to the tower company or renegotiating the lease with the tower company. Unless the "buyout" amount exceeds the present value of 50% of future rent from the extended tower lease, the landowner would be better off just keeping the lease and negotiating its own extension or sale with the tower company.   

Accordingly, if you receive an offer from Everest, we recommend confirming with them whether they intend to take over the tower at expiration. If not, we suggest asking Everest about their explicit intentions with the lease. In either of the latter two scenarios, we recommend contacting us so that we can help you determine the value of the lease and explain fully all of your options – not just those presented by Everest.   

Please note that we are not affiliated with Everest. Everest Infrastructure Partners may be a registered trademark. If you found this post while searching for Everest Infrastructure Partners, please direct your browser to www.everestinfrastructure.com.   

Tristar Investors Lawsuit Against American Tower Corporation

On Feb 16,  2012, Tristar Investors sued American Tower Corporation alleging that American Tower had violated the Lanham Act, unfairly competed, disparaged Tristar’s business, tortuously interfered with an existing contract and with prospective business relations, and lastly had breached a contract.   The suit was filed in Federal Court in Dallas.  The suit was quickly posted on the internet.  Tristar alleges in a lengthy complaint full of hyperbole that American Tower has prevented Tristar from purchasing assets that American Tower owns or subleases by using misrepresentation and unfair practices. [Read more…]

Crown Castle and Nextel Revenue Sharing

On a few occasions now, clients of ours with Crown Castle tower ground leases have received proposals to either purchase or extend their ground leases.   These lease extension or lease buyout offers are attempts by Crown Castle to tie up long term rights under their towers.   This is nothing new, as they have been making these offers for years now to every one of their landowners. [Read more…]

Wireless Capital Shutting Its Doors?

One of WCP’s agents told us yesterday that WCP is closing its doors and will not be funding any of the deals for which it has signed letters of intent. He mentioned that he was told this on a conference call where he was let go earlier this week. WCP blamed the issue on the financial markets.

Allegedly, WCP will release individuals who have signed letters of intent from their deal if the landowner calls WCP and requests to be released.

If you have entered into a deal with WCP and would like to check out other options, please contact us.

Wireless Capital Partners – Potential Woes

In recent months, we have received numerous inquiries from cell site lease holders who have entered into letters of intent with Wireless Capital Partners to sell their leases. These owners have contacted us because they have had difficulty getting Wireless Capital Partners to close on the purchases in a timely manner. To be fair to WCP, in some cases, the landowners were given a non-refundable fee to “hold” the closing for up to 3 more months. However in other cases, these owners could not reach their agent at Wireless Capital Partners. These owners wanted to see whether there was anyone else that would close quicker. [Read more…]

Wireless Capital Partners tells Landowners of Sprint/Nextel Credit Problems.

So today, two separate clients who are considering cell site lease buyouts from Wireless Capital Partners received emails from their WCP reps that has a cryptic message regarding Sprint/Nextel’s credit rating being downgraded to junk bond status. [Read more…]

AT&T to Build Cell Sites in McDonald’s Arches?

We have received recent inquiries from AT&T cell site owners who have been approached by Blackdot to renegotiate their leases. Of course, there is a new pitch, because the old pitch that the merger between AT&T and Cingular was going to cause terminations just doesn’t ring true anymore. [Read more…]

Global Signal signs Black Dot on to negotiate reductions in their leases.

It is incredibly disconcerting to me as a member of the wireless industry to see Black Dot Wireless’s success. They have made a business of convincing landowners who otherwise have no reason to negotiate a reduction in their cell tower lease to agree to such a reduction. [Read more…]