We are running a series of interviews with out of home exec Tom Giesken. Last week Tom talked about getting into the out of home business and building his first billboard. Today he talks about leasing.
What have you learned about leasing?
Trust is important to landlords. I always tell people, you’re gaining a partner. I’m going to be on your property. We’re going to be partners for the term of this lease and maybe further so you want somebody you can trust. I promise you I will earn your trust.
The difference between sales and leasing is in sales you want them to give you money and with leasing you’re giving them money. I always I walk in there with my suit on and they say ohh this guy wants to sell me something. I say, “No, I’m here to give you money today.” A few times guys were like, Come on in. Sit down, get him something to drink!!
As far as the lease paperwork I think the most important clause was the indemnification clause which releases the landlord of all liability. All people are worried about these days is being sued. I tell them “you’re completely indemnified for everything…even if something blows off that board and hits a windshield on a car going by.” They can come in and yell at you but I said to tell them “you’re going to have to yell at the billboard guy because this says right here that I’m completely indemnified with anything pertaining to that billboard…” People bought it bc it was the truth.
What are some landlord hot buttons?
One hot button is what goes on the board. Some didn’t want Democrats and some didn’t want Republicans and some didn’t want alcohol and some people didn’t want anything about faith or religion and some people didn’t want competitors advertising. They might not think of it so you got to throw them some options but don’t let them get too discriminative.
What type of lease payment
The smaller the board and the less the traffic count, the less you have to pay. For most boards, small and medium, I would always offer to pay the whole year in advance. It justs saves on bookkeeping. I’d pay the larger leases monthly and of course you have escalators where every five years it goes up 5% or so. Then you have also the ones with a percentage of sales payment and those are those are a pain. Steer away if you can!! They are a lot of work because some landlords want to be able to audit to make sure that you’re giving them the correct commission. It gets to be a big pain and so I try to stay away from them. I would just offer people a signing bonus to try to entice them andmake it worth their while.
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