Md7 Sending AT&T Renegotiation Letters- without Disclosing Letter is from Md7

We had heard previously that AT&T wasn't willing to allow lease optimization firms to send out letters on its letterhead without disclosing that the letter did not include actually come from the AT&T.   A client just received a letter though that clearly does not include anything identifying that Md7 (a lease optimization company) is involved.   We assume that Md7 is involved because the address on the letter as shown in the letterhead below

just happens to match that of Md7's offices.

The letter is the same as many other letters that are going out predominantly to private tower owners and municipal tower owners indicating that AT&T may extend or terminate the lease at the end of the current term and that AT&T is implementing a new program to "evaluate terms and conditions of all leases coming up for renewal, explore advance renegotiation options and consider alternative site locations." (emphasis added)   AT&T further requests that the tower owner: 

It appears that Md7 and AT&T have decided to remove any indication that Md7 is involved here altogether (except for the address).  Is that because the renegotiation efforts have been unsuccessful otherwise or is AT&T just looking to ratchet up the heat on tower owners to remove the opportunity for rent increases due to possible FirstNet modifications?  How many times can a company threaten to terminate a lease but not actually terminate it before owners just completely ignore the requests?   AT&T knows and based upon the fact that they keep sending the letters, there must be some tower owners that accept the revised terms with each round of letters.  

Et Tu, Brute? Verizon Appears to Have Hired Accenture to Renegotiate Cell Tower Leases Using Same Tired Threats of Relocation

Photo of Cell Tower
A cell tower with a substantial amount of equipment at the third RAD center
A municipal client, who has multiple public safety towers upon which Verizon is colocated, received a call and letter from a Verizon representative asking for reduced lease rate terms and escalation. The letter is on Verizon letterhead and does not make clear the relationship between Accenture and Verizon but refers to the Accenture employee or contractor as a "Verizon Representative." However, in the email from this representative, the signature block is for Accenture.  We surmise this means that Verizon is using Accenture instead of Black Dot or Md7 to renegotiate its leases. This is disappointing because Verizon has historically chosen not to stoop to these types of misleading negotiation tactics. And lest you think it is because of the ever more competitive wireless industry – Verizon still generates a very healthy 45.7% wireless profit margin.  

The letter states:  

As discussed during your recent call with ________, a Verizon representative, we are currently reviewing our real estate portfolio to assess market rates and trends. To remain competitive and provide the best value to our customers, we propose to modify our site lease terms, based on our knowledge of the market and our analysis of each site as follows:

 

 It further goes on to state (and this is the funny part):

Additionally, for all sites identified in this document, payment of rent shall include the following equipment rights:

  • 30,000 square inches wind load surface area at the RAD center (if available);
  • 10’ tip to tip RAD, if available. If not, space available up to 10’;
  • All you can build fixed fee amendments for the contract duration within the allotted tip to tip vertical and 30,000 square inches wind load surface area;
  • 16 cables;
  • No additional rent or fees for any additions or modifications to equipment throughout the contract term as long as the equipment rights identified above are not exceeded.

If we can't reach an agreement, we will remove you from our relocation list as we continue to evaluate our real estate portfolio.

As always, there is the implicit threat of termination – although carefully couched in language that doesn't constitute an anticipatory breach. So in essence, Verizon wants 30,000 square inches of equipment space in their 10' RAD center along with 16 cables. So no matter how much capacity this reduces on the tower or how much a tower owner would have to pay to structurally upgrade the tower to accommodate it, Verizon expects not to pay any additional fees. Generally, this is ludicrous and no tower owner should ever agree to this loading, regardless of whether they end up negotiating more favorable rent terms, in order to ensure the longevity of the lease. We aren't suggesting that Verizon may not eventually relocate some cell sites, just that it won't be that common and will be reserved for situations where they can save enough money by moving to justify the substantial expense of doing so.   

In this case, our municipal tower owner will be telling Verizon that they can keep their name on the relocation list. There is no chance on any of them that Verizon will end up moving. If you receive one of these Verizon/Accenture letters or calls threatening to renegotiate your lease or relocate the tower, please contact us.  

Want a Kinder Less Aggressive Tower Company Leasing Specialist? Just Fill Out a Survey!

Image of surveyOne of our client's called us yesterday to let us know that they had been beleaguered by a tower company rep who was perhaps too anxious and aggressive regarding a lease extension for a lease that wasn't set to expire for another 8 years.   This particular client has a Mona Lisa tower- a phrase American Tower used previously to refer to 4-6 carrier towers.   In other words, it wasn't going anywhere.   For some reason, the tower company rep felt that being aggressive and making all kinds of threats to move the tower and to cease discussions would make the landowner agree to the proposed terms.   

The landowner received a survey from the tower company- a generic one that asked about how the landowner felt about the tower company and whether lease payments were coming on time.   The landowner filled out the survey and added comments at the bottom that he didn't appreciate the rep's aggressive nature and angry demeanor.   Within a few days, the agent called him and apologized and the negotiations took a decidedly more friendly turn.    Perhaps that was because our client's tower is a very valuable tower.   Perhaps not.  Either way, if you are having a problem with your tower company rep and their negotiating tactics, fill out a survey or let the company know directly.   While the rep will and should continue to make threats about moving the tower, they should be able to do it in a less aggressive and cordial manner.  Both parties should remember that these negotiations are not personal, they are just business.  Treat the discussion as a business discussion, remove the personal aspect, and if you need help determining the business terms, consider contacting us.  

Sprint Enters the Lease Renegotiation Game Again

A landowner client of ours received this email from LCC, a company allegedly acting on behalf of Sprint where they claim that if the landowner doesn't agree to concessions, that Lendlease will consider relocating the Sprint site.  

Screen shot of email from Sprint
Email from Sprint Representative to Landowner

If you receive a similar request from Sprint, LCC, or Lendlease or another cell tower lease optimization company, please contact us.  We can help you evaluate the proposal and determine whether it is probable that Sprint would move in the event you choose not to accept their proposed rent reduction.

Zayo Group and Md7 Proposes Rent Reductions to $0/mo.

In a bold effort, MD7 on behalf of Zayo Group sent a letter to a client of ours asking the client to reduce the rent for the fiber access lease on their rooftop to $0/mo.   Their argument (a weak one) is that they are more akin to a utility and should be charged like one.   Since you don’t charge the power company to come on your property, why would you charge Zayo? [Read more…]

MD7 and the Value of a “Guarantee”

In the last 6 months, Md7 has been offering landowners a guarantee on their T-Mobile ground and rooftop leases equivalent to 10 years.   What may not be clear when they offer this guarantee is that T-Mobile is not the company making the guarantee- instead a subsidiary of Md7 named Md7 Capital Three is making the guarantee.  Some of our clients have started negotiations with Md7 believing that T-Mobile is the one who is actually guaranteeing the lease and did not know until retaining our services that Md7 Capital Three is actually the guarantor. [Read more…]

AT&T Mistakenly Reduces Cell Phone Tower Lease Rent

AT&T (previously Cingular), through a lease optimization firm (either BlackDot or Md7), contacts a landowner with a cell phone tower lease with AT&T and requests that the owner reduce their rent. The landowner tells AT&T that they won’t reduce the rent and does not agree to the proposed amendment to the cell phone tower lease. AT&T reduces the rent checks anyway. [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…]

Cingular to take lease reduction negotiations in house?

We heard a unsubstantiated rumor that Cingular is planning on pulling back the AT&T and Cingular cell site lease optimization program contracts back from Black Dot Wireless and MD7 and doing their own lease renegotiation in-house. There has been no formal press release to this effect and if you are still being contacted by MD7 or Blackdot Wireless- then perhaps they have some time to finish up loose ends or there is no truth to this rumor.

If this rumor is real, then we applaud (loudly). Don’t have someone else do your dirty work on a commission basis- and don’t have someone else mislead or use scare tactics to renegotiate YOUR leases with YOUR landowners. Have the *&@#*& to do it yourself.