Billboard Lease Buyouts

Outdoor advertising companies that have billboards on private property pay the landowner either monthly, quarterly, or annual fixed rent based on billboard lease rates for the use of their land or a % of net revenue coming in on the sign from advertisers. The landowner can be a private individual, municipality, county, religious institution, government or quasi-governmental entity or non-profit or business.

In most U.S. markets, marketing impressions determine billboard lease rates.

The liquidation value of a billboard lease directly correlates to the billboard lease rate that the outdoor advertising company pays to the property owner. The monthly or annual rent is subsequently determined by how much the billboard company is able to charge advertisers for use of their billboard. The most expensive billboard advertising rates in the world are in New York City, where monthly billboard lease rates can surpass $1 million. By contrast, a rural billboard on a highway may cost advertisers as low as $100 a month.

The most valuable billboard lease rates paying the highest rent are typically in urban areas along major interstates and freeways with heavy daily stop & go traffic. Billboard advertising rates are determined by daily impressions – the number of people who see the billboard every day. This in turn affects the billboard lease rates, which translates to rent that the billboard advertising company pays to the property owner.

Some billboard ground leases are fixed over many years.  Some ground leases are based on a % of net revenue. Some ground leases are prepaid at a discount for several years.  Some are easements that are paid up front for access but not ownership to the land. Some billboard ground leases contain rent escalation clauses, which automatically increase the rent paid to the property owner at set intervals, typically every five years. Escalators and De-escalators impact the value of the billboard lease rates because the income stream can either rise or decline as time passes. Out of all of the options listed above, Accel Advertising prefers % of revenue ground leases or easements for both the advertising company and land ownership segments of our business.

Rent reduction or removal of a billboard site is possible. A greater risk to the landowner of a billboard lease is opportunity cost. That means losing out on the opportunity to earn better growth from a financial asset. Applied to a billboard lease, it means that investing the cash proceeds in real estate, a business or securities can often provide significantly stronger growth over the next 10, 20 or 30 years, compared to the cumulative monthly rent in that same time period. Accel Advertising has a balanced portfolio of land and land leases that include our own signs on the properties or other outdoor advertising company signs on our properties.  We are constantly evaluating opportunities to buy and sell land and land leases.  

What is your billboard lease worth? 

Billboard lease owners can liquidate their lease for a lump sum cash payment by selling it to Accel Advertising, which then receives the monthly rent for the remaining life of the lease. Through a lease buyout transaction with Accel Advertising, you only grant an easement and assign the lease rights to us, not your whole property. You retain ownership of your land, so you can build long-term value and net worth. Even if you don’t need cash right now, doesn’t it make sense to know the market value of your lease? If your site meets our criteria, we can provide you with a no-obligation analysis and valuation. Please call us at (305) 763 – 8351 or click here to submit your information online so that we may contact you.