Insider hears that Landmark Dividend employee Scott Furcolow, a former Lamar and Adams lease manager and GM is approaching billboard companies offering to purchase billboard easements or to provide long term leases as an alternative to financing.

Insider has seen enough Landmark transactions to know that you need to be cautious dealing with Landmark for five reasons:

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

• They may ask to see your financials.  Insider gives financials to his bank and investors, not to landlords.

• They may ask for a right of first refusal on your signs if you ever want to sell. When Insider wants to sell he doesn’t want to wait 45 days while Landmark decides if they wish to purchase his signs. Time is the enemy of a sale and Landmark’s first right of refusal can torpedo a sale.

• 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 pay for one location.

• They will 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.  Landmark will too.

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