Landmark Portfolio Update

The outdoor easement and lease purchaser Landmark Outdoor has released 2016 financials.  Here are the highlights from Insider’s review of the 2016 financials and Seeking Alpha earnings call transcript.  Insider has summarized Landmark’s Outdoor Advertising Investments in the following table.

Landmark Infrastructure Outdoor Advertising Real Estate Property Interests 2015 and 2016

  • Landmark’s outdoor site portfolio increased by 62% to 440 sites during 2016.
  • Outdoor accounts for 28% of Landmark’s 1,565 total sites at December 2016.
  • The average monthly outdoor rent on Landmark’s sites is $1,351 which suggests that Landmark is concentrating on prime urban sites.  Landmark is not aggressively seeking sites with rent of $300/month or less.
  • Georgia, Florida and Texas are the three states in which Landmark has been the most active as you can see from the following table.

Landmark Infrastructure Outdoor Advertising Sites By State 2015 and 2016

  • At 12/31/16, Outfront was a tenant on 125 Landmark sites, Lamar was a tenant on 119 Landmark sites and Clear Channel Outdoor was a tenant on 118 Landmark sites.
  • Landmark CEO Tim Brazy said on the earnings call that the company has formed a joint venture to aggressively purchase outdoor leases and easements in Europe.

In December we formed a joint venture with a partner who will selectively source and manage outdoor advertising assets for us in certain European markets.  We believe this venture is a tremendous opportunity for LMRK because it allows us to acquire high quality outdoor advertising assets in new strategic markets that have potential upsides through digital conversions. As a result of this venture we do expect acquisition volume to increase materially later in 2017 and beyond.

  • Landmark CFO George Doyle said that Landmark will seek lease increases when static boards are converted to digital:

On the outdoor advertising side, we do you receive some increasing rents from percentage rents, which is nice but it’s not a very fast growing segment for the most part. I mean outdoor advertising has generally been growing along the same pace as the US economy. So you have about 2% average growth in the market. There are some unique opportunities potentially in the portfolio over time where we could get a static converted to a digital. Where potentially we can get much higher growth rate.

Insider’s take: Landmark is having success acquiring assets and isn’t going away any time soon although they don’t seem to be interested in rural signs with low monthly rents because the due diligence and documentation costs are too high.  Landmark is the landlord for one of the billboard structures Insider acquired in Indianapolis from Clear Channel Outdoor so Insider will soon know what they are like  to deal with.


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