Tower Ventures LLC has recently purchased Cingular and AT&T those cell towers that AT&T and Cingular have terminated their leases on. Most of these towers do not have any revenue, or the revenue they generate is less than the expense of managing and operating the tower. According to Tower Ventures’ web site, it appears that they purchased about 300 towers.
Landowners who own the ground under these tower sites are being approached by Tower Ventures LLC through a sub entity called Tower Assets Newco II (and maybe other entities). The pitch is simple: the tower is no longer profitable, and the landowner needs to sign a new lease with Tower Ventures at a reduced lease rate in order for them to continue the lease.
In these situations, the landowner may currently receive a high lease rate because AT&T and Cingular terminated and sold off their more expensive sites and retained their cheaper sites. The landowner is being asked to reduce their lease rate substantially in some cases in order to retain any income at all. The proposed lease modifies the previous lease and makes changes that are favorable to Tower Ventures, LLC, but not to the landowner. The landowner may be weary because s/he was already contacted once before by Black Dot Wireless and chose not to negotiate.
These towers have value and as the landowner, you should be aware of what that value is. Your lease rate should reflect a negotiated agreement that is profitable for both you and Tower Ventures. In many cases, there is no way around it – you will need to reduce your rent.
However, Steel in the Air can assist you in evaluating how much you will need to reduce your rent. We can help you evaluate whether revenue sharing is appropriate for your lease if Tower Ventures adds additional tenants to the tower. Lastly, we can help you understand your options.
If you have been contacted and need help renegotiating your lease, please fill out our contact form with information regarding your Tower Ventures LLC lease and we will get back to you shortly.