what should I charge for a billboard land lease?

Question

I have a property on 620 in Austin.  Its the area past the dam, almost in Lakeway.  It has 620 frontage, with no trees or obstructions that would hinder anything to do with the billboard.

A company approached me about leasing for their billboard the would erect on my land and lease back from me.

Any advise on how much I should charge monthly?  I know its a formula of traffic count, billboard company's net income, etc.

But if anyone knows what a billboard land lease would typically be for my area.  Please advise.  I would love some advise about what I can expect to get by agreeing to this land lease.

Kindly, Keri  Keri Parker

Paul Klei · Answer

Also, I'd like to negotiate out the sole discretion language that allows them to remove the sign or lower/stop rent payments. Is there a way to remove or mitigate that language? And, to your knowledge, does that language affect appraisal of the lease? Thanks!

Paul Klei · Answer

I am negotiating a lease to allow a sign to be built on my land. They are offering 20% of revenue. I would like a base rent so that there is predictable income to better facilitate lease valuation because I would like to monetize the lease. I am considering asking for 10% of revenue as the minimum, plus 10% variable revenue share. I would like an escalation clause for the base rent but I'm receiving mixed advice about this. I've been told leases are appraised at 8-10x annual revenue, as opposed to gross lease value. Do you have any idea how leases are appraised in relation to how they are structured, escalation clauses, etc.?

Keri Parker · Answer

thank you for the replies! Great advice. I will of course let them present their # first. I've done my research thoroughly but I jiffy can't seem to find specific #s and lease amounts that I should negotiate with for a lease of this type on my area. And id like to be completely prepared and seem "educated" for this mtg.  I'd just like an educated ball park figure. For this type of lease in KY area. The traffic count is 36,000 daily. 100% visibility of Billboard (no trees). Av household income $145,000. Just wondering if someone knows about land lease amounts to charge for an LED, single pole Billboarpole my area, with my details mentioned above. if so, I'd love some guidance and information. Thank you in advance. Kindly, Keri

Rich Baer · Answer

@Keri Parker

I can't help with the specifics for your area. However, I would go back to them and ask what they are willing to pay. Take that information and do some research. Call some other billboard companies and commercial realtors. You are in the driver seat in this situation. You will need to have an Attorney review any contract. Reel in the fish.

Matthew Paul · Answer

Curious as to what they offered .