How Do Billboard Ground Leases Work?

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      How Do Billboard Ground Leases Work?

      There are approximately 450,000 billboards in use across America today, and every one of them requires a small parcel of land. It would be far too expensive for outdoor advertising companies, billboard owners, and operators to buy enough land to satisfy the demand for outdoor advertising, which is why billboard leases are so popular right now.

      The value of a lease is determined by a range of factors, including the market value of the land, the volume of traffic passing by and the advertising dollars the land has generated in the past. It’s important to know exactly how a billboard ground lease works if the landowner is to maximize the revenues it generates.

      Billboard Companies Search for Land

      Billboard companies simply can’t afford to buy the land they need for advertising, so they lease it instead. They search for land with good counts of traffic, maximum visibility and the correct zoning. Once they’ve identified a parcel of suitable land, an approach to the landowner is made.

      Land Is Leased From the Owner

      The final details of a billboard ground lease can vary, depending on a range of issues. While some leases can last for just 10 years, others can last for up to 40. In most cases, the landowner will receive a fixed monthly payment or an annual lump sum. Some ground leases also pay the landowner a share of the advertising revenues generated. However, revenue sharing can have disadvantages for both the billboard company and the owner.

      The Costs of Development Lie With the Billboard Company

      The landowner’s involvement in the billboard project ends when the terms of the ground lease have been agreed. It is the responsibility of the company to cover the costs of erecting, insuring and maintaining the billboard. The lease payments are paid to the landowner whether the location proves productive or not.

      Billboard Leases Can Be Sold

      Many landowners are unaware that they can sell their ground lease to a company such as Outdoor Equities. Rather than wait for months or years for their leases to generate money for new investments, landowners sell their lease in return for an immediate lump sum. Selling allows the owner to generate the funds needed for new projects or to pay off debts. Meanwhile, the billboard remains in place and nothing visibly changes.

      Don’t wait for your land to generate the cash you need now. Arrange a billboard lease buyout by Outdoor Equities and secure the cash flow you need within a matter of days.