A few weeks ago out of home leasing and development expert told our readers to be cautious about billboard lease escalator clauses.  Trailhead Media Assistant Director of Real Estate agrees: 

From my experience, this is exactly where many OOH deals quietly go wrong.  I’ve seen leases that looked completely reasonable at signing—everyone optimistic, projections penciled out, maybe even a new digital conversion on the horizon. But when you stack annual escalators year after year, especially when both the landowner and are escalating independently, the economics drift out of reality fast.

The disconnect is simple: lease costs compound aggressively, while OOH revenue does not. Historically, our industry grows modestly. When fixed obligations grow at 6–8% annually and revenue grows at 2–3%, no amount of operational discipline can close that gap forever. Eventually, even strong locations become liabilities.

What’s often missed is that this isn’t adversarial. Most landlords aren’t acting in bad faith—they’re optimizing for short-term certainty. But long-term sustainability is what actually protects everyone’s interests.

Reasonable escalation isn’t about underpaying—it’s about alignment. When rent growth reflects actual revenue realities, assets stay up, investment continues, and all parties win over time. That’s the difference between a deal that survives on paper and one that survives in the real world.

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