Out of home development expert Andy Goodman writes for Billboard Insider on development issues.  His last column discussed billboards on native american tribe lands.  Today he discusses the best way to determine market rent for a billboard lease.

So the question here is how do I know that I’m getting fair market value rent for my billboard.  When I’m working with a landowner I’ll ask the billboard company to provide the historical financials for a sign for the past three years.  Pre-covid I can see the revenue generated by the billboard.  Then I can see what type of hit they took during Covid.  Coming out of Covid what I’m hearing is that business has been extremely good, so the revenue should reflect that. What I frown upon is calling a competitive billboard company and asking what the rates are on a billboard in that area. Usually what is being quoted is rate card, and rate card is not what the billboard is being sold for.  That’s going to give you too high a number to base your percentage of revenue rent.  At the same time, the billboard companies are right to quote higher when you call in for a single billboard in a particular area.  Landlords should not take that rate card quote as gospel.  It’s a mistake.  Again, the best way to determine a fair market rent is to ask for the historical data for the past three years and figure out what market rent is.  Is it 20% or 30% of revenue?

You can reach Andy at andygoodman.age@gmail.com, 310-721-8422.

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