Lafoy on acquisitions: We’re looking now. Lease Acquisitions At Lease Advisors, our consultants have decades of combined experience in real estate, law, and financial services. In other words if the billboard land rent on a property is $500/month, a permanent easement to keep the sign on the property should be worth $48,000-60,000. Anna Bager: The strength of our industry is still there. There are many things that affect the cost of your lease. Non-Invasive Lamar uses rigid engineering standards to build structurally sound and safe billboard … When determining the value of a billboard lease rate, the entire process boils down to one thing: marketing impressions. A 10% cap rate for example is the same as a 10X cashflow valuation for an easement. If you are a billboard owner looking to buy an easement under a site where you have an existing land lease, a property owner, or an investor looking to buy or sell an easement under an existing land lease…the math is simple. Chris Cowlbeck says Independents coming through pandemic in good shape. With an easement, the billboard company is granted perpetual use to a defined section of property in order to develop a new billboard structure, given access the sign, given the right to run electricity to the sign, and protect the sign’s visibility from the roadway. Jim Poage on how to minimize OSHA fines and keep your employees safe. And, although everybody has forgotten by now, there have been periods of 10%+ annual inflation in this country. TG Shaw: The biggest mistake you can make when selling out of home is not knowing your inventory. For starters, it’s about obtaining maximum control of the lease value. Here are two nevers when negotiating a lease or an easement. If you would like to receive lease payments via direct deposit, please visit our Lease Direct Deposit page for additional information. A 10% cap rate for … Increase the value of your property through billboard rental income. Outdoor Equities LLC will purchase your current billboard lease in the form of a perpetual easement for a CASH lump sum payment. A cap rate is the % at which property income is capitalized to determine value. This means that the value of billboard lease rates are almost always going to be tied to the total number of views that billboard is capable of generating on a daily basis. Your email address will not be published. Your estimate will be prepared by experts with over 30 years of experience in the out-of-home advertising industry. I will attempt to go through those provisions of a billboard lease which I think raise the most issues for the billboard … Stephen Johnson on Building Your First Digital Billboard, Smartlink: A Made in America Success Story. It can be difficult to determine the proper billboard price for your agreement. Heathrow Land and Development Corporation that the value of a billboard is determined by "considering its contributive value as an improvement to the condemned real property or the value of the billboard itself and compensation must be awarded by using the method, applying standard appraisal techniques… Here’s the rationale he used in selecting the cap rate: “The 9.5% overall capitalization rate is selected after a review within the appraiser’s files of market data on land leases…General market evidence including one in which the appraiser was involved are in a range from 7-9%. Many appraisers use a cap rate to value billboard leases. Rod Rackley: No one should doubt his or her inner strength and ability to get through this. 6 times cashflow for fast or distressed sales. 3 Broad Steps in the cost approach are: • Estimate the replacement cost new of the improvements • Estimate the loss in value from all forms of depreciation, deduct the total amount of depreciation from the replacement cost new (MISSING) • Estimate the value of the land as if vacant and add the land value estimate to the depreciated cost … Yes, there are now multiple available ad spots on a digital billboard (as opposed to a static billboard that typically has 1 or 2 ad spots), but as mentioned in factors that affect the value of your billboard lease, it all depends on how much revenue a billboard company can generate on a billboard and nature of the market where the billboard … A few of these factors include: Although these factors are important to keep in mind, the ultimate decision comes down to a compromise between what the billboard company/investor wants, and what the property owner is willing to structure. I saw an appraisal this week in which the appraiser chose a 9.5% cap rate (10.5 times cashflow valuation) for a billboard easement. There are cases which have affirmed the market value approach for billboards affected by condemnation actions. An Easement is selling the rights for the billboard … The following information is based solely upon the experience of the Author and should not be used for legal or financial advice. Cash in today: Instead of waiting 10 years for the income for your billboard lease, Lang Media programs allow for lump sum payments today; No hassles: Lang Media will do all the work and communications with the current billboard company; Highest value… The power of our medium is still there and we’ve grown stronger. Grey Vick On Small Market Digital Billboards, Russell Abdullah on What Samsung is Doing to Advance Programmatic OOH. We apply that extensive experience to our goal of optimizing the value of your billboard lease with financial services designed to ensure that you receive the maximum value of your lease. That means the landowner shares in revenue growth as advertising rates increase. I have been hearing anecdotal stories that Landmark is willing to pay more than 10-14 times cashflow for easements. Here’s a recent post I put up at www.billboardinsider.com about valuing billboard easements. I’m used to seeing a value of 6-10 times cashflow for billboard easements. Simply put, if a billboard is in a high-value area, and the billboard … The liquidation value of a billboard lease directly correlates to the billboard lease rate that the outdoor advertising company pays to the property owner. In using the income approach to appraise a billboard, the formula for calculating value is: Value = Income/Rate (V=I/R) The first step in calculating the value is to identify the income from market rent, … At Lease Advisors, we assist clients in maximizing the value of their billboard leases and optimizing their billboard rent. On the off chance that an … A … Bill May On Defending the Out of Home Industry, TierOne’s Jesse London on Raising Capital. Get a fair lease rate estimate for the outdoor billboard on your property. When you do it well people talk. When you are talking long periods of time, nobody can predict where inflation will head. Billboard lease agreements come in various shapes, forms and lengths and are typically used by the billboard companies in many different states and jurisdictions. A valuation multiple is the reciprocal of the cap rate. These decisions can have dramatic impact on the profit and value of each sign. 8-10 times cashflow for a normal sale. Private lenders to billboard and digital sign companies since 1997. Easement – Receive a lump sum for your billboard location without selling your property or affecting the value of your land. Buyers know that the underlying assets generate the revenue and earnings. It’s essentially the net income from the sign times a scope of 15% to 20%. Dave Westburg, Billboard Insider, 1032 4th St, Kirkland, WA  98033, John Weller, Billboard Loans, 1405 W. Crestwood Ct., Spokane, WA  99218. Matt Schulze on 4 mistakes owners make when they build structures. In the billboard industry, an easement can be used to grant the right to use someone else’s property for a billboard location. Author’s Note: Chris Stark has been involved in the Billboard and Communication Tower Industries as a lender and advisor since the late 1990’s. Grant a billboard ground lease, its value has the potential income value that a billboard operator the to! 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