1. In a condemnation action, how much should a sign owner be paid if the billboard cannot be relocated on the parent tract but can be relocated across town at a better site? The cost to move, or market value?
Cost to move. Most sign owners as well as condemning authorities prefer to pay the much lower cost of relocation rather than the fair market value of a sign. If a billboard can be relocated to a site that is equivalent in terms of traffic count, demographics and other features, both the sign owner and the condemning agency should be happy with payment of the cost to move.
2. Do you appraise billboards based on Income and Sales Comparison approaches or based on the Replacement Cost New Less Depreciation (RCNLD)?
We appraise billboards based on their market value. This includes an analysis of the structure and its Replacement Cost New Less Depreciation. However, this is not the only approach used by buyers and sellers to estimate market value. Market value is defined by The Appraisal of Real Estate, 10th ed., as “The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.” Billboards and the property rights associated with them are typically sold in competitive markets for cash or cash equivalent prices, with both buyers and sellers acting in their self-interest. These sales can be used to adequately estimate the market value of a billboard as well. Because billboards produce income an income analysis is also appropriate.
3. Have you testified in court?
Yes. We have testified at deposition and in court.
4. What kinds of outdoor advertising do you appraise?
Our firm has appraised many standardized billboards including 8-Sheets, 30-Sheets, Bulletins, Bus Shelters, Mall Kiosks, Wallscapes, Spectaculars and Alternative. In addition to these appraisals we have also analyzed individual site leases, multiple site licenses/easements, hypothetical sites and relocation feasibility.
5. Does a billboard appraisal require some business valuation experience?
No. Billboard appraisal does not require business valuation experience. However, billboard appraisal does require a thorough understanding of how outdoor advertising operations differ from conventional real estate operations. Billboard appraisal also requires an understanding of how billboard assets are managed and sold since most billboards are sold in small or large groups. Knowledge of business valuation issues may be important to the extent that a billboard is considered to have a component of business enterprise value.
6. What other services do you provide besides appraisals?
We do appraisal reviews for clients who are too busy or not trained in billboard appraisal methods. We also provide billboard related information through our online newsletter and subscriber area, which has facts and figures as well as resources for additional information. We will also provide general consulting services, sit on arbitration panels, offer site lease or easement analysis and conduct market or relocation feasibility studies.
7. Have you published anything on the subject?
We recently published Billboard Appraisal: The Valuation of Off-Premise Advertising Signs in association with the American Society of Appraisers. The 253 page paperback covers topics such as billboard appraisal, site lease analysis and other value related issues. The book includes illustrations, photographs, examples and market information.
8. Who are your primary clients?
We have worked for both government agencies and plant operators over the last 15 years. Our government clients have included the Arizona Department of Transportation, the City of Phoenix, the City of Glendale and Pima County. Our plant operator clients have included major national sign companies and individual sign owners.
Lease Management Questions
1. Why should I have SignValue manage my billboard lease(s)?
Sometimes clients don’t keep up on the details of their lease(s) well enough to meet deadlines and take advantage of other opportunities in a lease. For example, many lease agreements have an automatic renewal clause that allows the current lease to continue for subsequent successive like terms unless the lease is cancelled at least 90 days prior to expiration. We notify the landowner of the expiration deadline and renegotiate the lease rate and terms with the sign owner before the lease automatically renews. Some landowners don’t know that they can get higher rates by allowing other billboard companies to bid on their conforming site. Many landowners don’t know that they can also sell permanent easements instead of continuing to lease their land to their billboard tenants.
2. What benefit do I receive for having SignValue manage my billboard lease agreement?
Sign companies are represented by full-time, salaried, real estate representatives and lawyers. Advertisers rely on advertising agencies to represent them when negotiating for advertising space. However, landowners don’t have a single reliable source for representation. Now, landowners can rely on SignValue to reliably represent their interests. With SignValue you get highly competent consultants on your side and you become part of a large network of landowners who benefit from the expertise and influence that only we can offer.
Lease Representation Questions
1. Why should I hire SignValue to negotiate my billboard lease?
Most landowners don’t get optimal lease rates and terms because they don’t know enough about the billboard industry. The outdoor advertising industry is very unique, so if you don’t have experience, it is difficult if not impossible, to know the value of your billboard site and the appropriate terms and conditions for your lease.
2. How much more can SignValue get for me?
SignValue’s ability to increase lease rates, revenue sharing splits, and other benefits depends on the terms and conditions of your current lease, the features of your sign location, and local ordinances. Our Certified Billboard Lease Analysis Report will give you a good indication of how much more we might be able to negotiate for you.
3. What is the fee for negotiating my lease agreement?
Our fee is based on a percentage of the total gross lease value. For example, the total gross lease value of a ten-year lease paying $10,000 per year is $100,000 (10 years x $10,000 per year = $100,000 total gross lease value). Our fee is a small percentage of the $100,000. Many landowners are not receiving fair market lease rates, so we are confident that we can help them increase their lease rates substantially. Call us today at (480) 657-8400 to find out more about this service.
4. How long will this take?
It usually takes four to six months to negotiate a new lease or renegotiate an existing lease agreement. If the process involves offering your billboard to other potential operators, the process could take up to one year.