Outdoor advertising companies that have billboards on private property pay the owner monthly rent based on billboard lease rates for the use of their land. The property owner can be a private individual, municipality, county, religious institution, government or quasi-governmental entity or non-profit or business.
The liquidation value of a billboard lease directly correlates to the billboard lease rate that the outdoor advertising company pays to the property owner. The monthly or annual rent is subsequently determined by how much the billboard company is able to charge advertisers for use of their billboard. The most expensive billboard advertising rates in the world are in Times Square, New York City, where monthly billboard lease rates can surpass $1 million. By contrast, a rural billboard on a lonely stretch of highway may cost advertisers only $1,000 a month.
The most valuable billboard lease rates paying the highest rent are typically in urban areas along major interstates and freeways with heavy daily traffic. Billboard advertising rates are determined by daily impressions – the number of people who see the billboard every day. This is turn affects the billboard lease rates, which translates to rent that the billboard company pays to the property owner.
Many billboard ground leases contain rent escalation clauses, which automatically increase the rent paid to the property owner at set intervals, typically every five years. Escalators impact the value of the billboard lease rates because the income stream continues to rise as time passes.
Although rent reduction or decommissioning of a billboard site is possible, the risk is statistically low. The far greater risk to the owner of a billboard lease is opportunity cost. That means losing out on the opportunity to earn better growth from a financial asset. Applied to a billboard lease, it means that investing the cash proceeds in real estate, a business or securities can often provide significantly stronger growth over the next 10, 20 or 30 years, compared to the cumulative monthly rent in that same time period.
Billboard lease owners can liquidate their lease for a lump sum cash payment by selling it to Landmark Dividend, which then receives the monthly rent for the remaining life of the lease. Through a lease buyout transaction with Landmark Dividend, you only grant an easement and assign the lease rights to us, not your property as a whole. You retain ownership of your land so you can build long-term value and net worth. Even if you don’t need cash right now, doesn’t it make sense to know the market value of your lease? If your site meets our criteria, we can provide you with a no-obligation analysis and valuation. Please call us at 1-800-843-2024 or click here to submit your information online so that we may contact you.