Neil Bell of the Bell Board Podcast released a podcast interview with Trailhead CEO John Murrow this week.  We will run excerpts from the podcast.  Today Murrow talks about managing lease costs..

Getting started in out of home.

I started with Adams Outdoor as a real estate rep. Soon moved to Fairway Outdoor as a real estate rep, and then made my way up to real estate manager. Got into corporate a little bit when Adams came back into the picture and ran us for a few years, and then I went back as a real estate manager for Lamar before I got this opportunity and started with him. So I worked my whole way up through real estate.

Were you just managing real estate portfolio or going after new leases?

We we got incentivized on new leases, new builds. And I did quite a few of those. The, the primary job was renewing leases and managing that lease portfolio. One of the things that Adams liked about the way I managed is I didn’t just accept a 3% increase in lease cost year over year. I kind of pushed back and said, well, what if we can reduce lease costs? And they were like, well, yeah, if you can reduce cost, then go for it. And we were very successful at fairway, reducing lease cost in the hundreds of thousands of dollars over year over year.

How do you reduce lease costs?

There’s a lot of different strategy…landowners like their money, but, you know, they’d rather have some pie than none of the pie. So if a sign was upside down, we just go to them and say, look, we either have to take this sign down because it’s upside down or, you know, we can reduce the rent a little bit, make it profitable for us, and make it profitable for you. And we can keep going..And like in everything in business it comes back to the relationship. You know you got to build a relationship first and then you can have the tough conversations. And you know I’m I’m totally transparent and honest with everybody. So, you know, I’m not going to try and pull the wool over somebody’s eyes and make up a story just to reduce a rent.

Avoiding percentage rents

There were a lot of percentage deals. My policy as a real estate manager was to try and get away from those percentage deals. And, you know, a lot of the percentage deals was a base plus percentage. So I would go to them and say, look, you can either share in our good times and share in our bad times and have a straight percentage lease, or you can have a flat rate and be guaranteed every year. You’re not going to have a base and a percentage. And most of them get that

You can access the video podcast at the following LINK. Or watch it below.

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