Office Building Signage: Can you get income from it?

5 Replies

I'm curious if anyone who owns a commercial office building has strategies to get additional income via building signage.  

I own an office building that is really well situated (high traffic area) and currently have a signage from a Local Bank, who is one of my tenants. Their lease is coming up next year and I want to start discussion on an extension. The signage is on top of the building facade facing the main traffic area and is the only one on the building. The tenant paid for the signage at move in on the initial lease, but I'm responsible for electricity and maintenance, as the signage is well lit at night. 

How would one get extra income from this?

Originally posted by @Henri Meli :

I'm curious if anyone who owns a commercial office building has strategies to get additional income via building signage.  

I own an office building that is really well situated (high traffic area) and currently have a signage from a Local Bank, who is one of my tenants. Their lease is coming up next year and I want to start discussion on an extension. The signage is on top of the building facade facing the main traffic area and is the only one on the building. The tenant paid for the signage at move in on the initial lease, but I'm responsible for electricity and maintenance, as the signage is well lit at night. 

How would one get extra income from this?

Henri,

I have worked with landlords that charge tenants a monthly signage fee. Typically, this only applies to tenants who lease less than a specific percentage or square footage of the building. If a tenant is over that percentage, there is usually no fee (other than install and maintenance).  

If this is a good credit tenant, would it be worth providing free signage as an incentive to keep them in your building?

I am in Southern California, so I am not sure of the specific details in your market. I would connect with a local broker or attorney who can review the lease, and see if anything regarding free/paid signage has already been agreed to. 

@Henri Meli I think this is a local issue. I am paying to put in signage for my office/retail tenants because there isn't great demand for those spaces in our market. But I guarantee you the companies putting their name on the top of buildings in downtown Atlanta or Charlotte are paying a lot for it or getting equal value in lease negotiations.

It sounds like your particular sign has some solid value to the business so I would start out asking for something for it in your negotiations and go from there depending on what else they and you want.

The only caution I would throw in is to look at how valuable that location is to the bank. Is it their main branch or a ancillary location? How close is their next nearest branch? Go in several times during working hours and see how busy they are. Lots of banks are closing down lower performing branches these days. So determine your negotiating leverage before you start talking to them about paying for the sign.

Henri look at the banks deposit levels to see how much activity they are getting. Local banks many customers still like going in to talk to tellers, branch managers, etc.

The more national type banks tend to be more no frills, robotic, your a number, etc. 

I like going to the hometown banks. I had national banks before and it just wasn't for me. There are so many layers of locations and employees that doing simple tasks can be burdensome .