Insider was asked again this week what he thinks of Landmark Infrastructure.  Landmark Infrastructure is a public company which owns 1,456 billboard, tower and wind turbine leases and easements.    Landmark has an office or origination person in 24 cities (see graphic below which came from a March 2016 investor presentation).  Outdoor leases account for 17% of Landmark’s revenue.

Landmark Infrastructure Offices and Origination Personnel

Insider has seen several Landmark easement transactions and continues to hear from outdoor companies who’s landlords are being approached by Landmark.  Landmark reports that it has 119 origination and due diligence employees who attend 15,000 meetings each year, negotiate 3,500 transactions and close 500-700 site purchases each year.

Remember the proverb about having a long spoon when you sup with the devil? Here are five reasons to be careful when dealing with Landmark:

• They may ask to own your sign with the lease expires or terminates.

• They may ask to see your financials. I give my financials to my bank and my investors, not to my landlords.

• They may ask for a right of first refusal on your signs if you ever want to sell. When I want to sell I don’t want to have to wait 45 days while Landmark decides if they wish to purchase my signs. Time is the enemy of a sale and Landmark’s first right of refusal is adding time into a sale process.

• They may try to cross-default locations. If you have five different billboards with five different landlords and you run into difficulty at one location you can let the lease default and negotiate with the landlord over removing the board. If you have five different billboards with Landmark you may have cross-default language in your agreement which says that all the locations go into default if you fail to make payments at one location.

• They will attempt to push rates. Here’s a direct quote from Landmark’s June 30, 2015 10-Q. They are talking about their approach to repricing cellular tower leases but I think they will apply the same strategy to outdoor leases: “Occupancy rates under our tenant leases have historically been very high. We also believe we are well positioned to negotiate higher rents in advance of lease expirations as tenants request lease amendments to accommodate equipment upgrades or add tenants to increase co‑location.” Any of you have railroad leases? They are more expensive and shorter than most other leases because the railroad controls multiple locations and uses pricing power. The same will apply to Landmark.

What should you do if your landlord tells you they’ve been approached by Landmark?

• Offer to match Landmark’s price to the landlord.

• Ask your landlord for the Landmark rep and call and tell them you don’t want to do business with them.  Insider has heard of outdoor companies who have threatened to take down a board if Landmark buys the easement.

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