• Landmark’s Marketing Strategy

    Landmark Infrastructure buys of home advertising ground leases.  Insider knows someone in the billboard business who owns land under billboards through a separate company.  Insider reviewed the landowner’s Landmark Infrastructure file and here are the results:

    • Landmark aggressively contacts landlords.  Landmark has approached the landowner 19 times in the past three years asking him to sell his ground lease.
    • The marketing materials emphasize four benefits to the landlord from selling a lease: immediate cash; a tax free exchange if the landlord accepts Landmark Infrastructure stock; reduced risk; and an ability to get higher returns elsewhere by reinvesting the money.
    • The ground lease buyout valuation varies from letter to letter but the promotional materials use hypothetical valuations of 9-12X annual rent for ground leases.   The language looks like this:

    • Insider imputed ground lease valuations of 9.0-12.0 times in different letters by dividing the lump sum amounts promised to the landlord in letters by by the annual monthly rent.
    • Landmark uses a high multiple in the example but doesn’t always pay it.  Insider has been contacted by some landowners who report receiving offers of 6-7 times annual rents.  The amount Landmark pays depends on terms of the amount of the lease, the location of the billboard and whether there are price inflators.  Landmark doesn’t like to buy small dollar lease on rural locations.
    • Landmark also approached the landlower’s billboard company directly with a lending product promising repayment terms of 15-40 years and a low fixed rate.

    Insider’s take:  Insider views Landmark as less of a threat as a senior lender than as a landlowner.  If you are concerned about dealing with Landmark as a landlord you should send letters to your landlords offering to buyout leases so that they approach you first before responding to Landmark.  You also might want to add a clause in your leases giving you first right of refusal to buyout a ground lease.  Some landlords my not agree to this however.

    Insider would love to hear your stories about dealing with Landmark.  Contact Insider at 206-910-1283, billboardinsider@gmail.com or use the following form.

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