Billboards

[Terrel L. Shields]

Our NWA Appraisal Section meeting was great with good attendance and our Director came up for the dinner. Lee is certainly the most personable guy you could meet, not that I didn't get along with our other past directors. He is just really "one of the guys" in such a meeting.

Our speaker was Bear Chaney, new head of the Assessment Coordination Division, past assessor of Benton County, and a certified appraiser who used to work for Tom Rife, MAI, and past board member. His talk was about assessment ratios, etc.

But as part of the discussion billboard valuation came up. Well, in the past the billboard folks like Clear Channel were telling assessors that billboards were worth $1000...ha. So the ACD created a way to value these billboards and take into consideration the traffic count which, of course, affects the income, and thus they were valuing the billboards by income.

In the last legislature, the committee heard a bill and the ACD didn't really get a chance to speak on the bill. The committee was scheduled to meet at 9, but in reality, met earlier and quickly passed a bill that favored the billboard people...namely, the cost approach is the only approach allowed by law now. Which means a billboard in Little Rock on I-40 is valued at the same price the same size billboard in Marked Tree is. Ah, Arkansas politics.

 

[Tim The Enchanter]

Sounds like the golden rule to me. Guys with the gold.....
Don't you have those that are like a giant screen TV?
That has to cost more than $1,000.

 

[erockinaz]

I once had lunch with Jeff Wright of Sign Value. He specializes in off-site sign and billboard appraisal. He wrote a book, Billboard Appraisal: The Valuation of Off-Premise Advertising Signs, on the valuation of billboards for eminent domain, sales, and site leases. It was interesting conversation on how he developed his appraisal methodology regarding billboards. The book can be found here: http://www.amazon.com/dp/093782805X/?tag=realestatappraat.

 

[Terrel L. Shields]

I don't have his book, but I bet he says there is a difference in value between a billboard in front of 40,000 eyes per day, and one with 4,000 eyes per day...

The state now says income nor sales are allowed to value a billboard. The cost approach is the only approach allowed. And, yes, the billboard companies influenced the decision without a doubt.

 

[Meandering]

I don't have his book, but I bet he says there is a difference in value between a billboard in front of 40,000 eyes per day, and one with 4,000 eyes per day...

The state now says income nor sales are allowed to value a billboard. The cost approach is the only approach allowed. And, yes, the billboard companies influenced the decision without a doubt.

Odd because we have billboard sites that are leased, not bought and sold. And the cost expense to construct is only attributable to the billboard company, not the land holder. May be just a difference in area, but what you post seems as arcane as the smoking guy painted on the side of a barn to advertise tobacco.

What do you surmise is in the book for the difference of being static in front of 40,000 eyes per day, as opposed to be all LED lit up every 2 minutes for 45 seconds of being in front of all those eye balls, for the same or more expense to the advertiser?

.

 

[Terrel L. Shields]

What do you surmise is in the book for the difference of being static in front of 40,000 eyes per day, as opposed to be all LED lit up every 2 minutes for 45 seconds

Every billboard type has a different value (price) but locally I know a few agents who had their faces put on a big billboard...It cost from $1,800 to $6,000 for six months depending upon where it was. Obviously, the one is "worth" over 3x the other even when identical construction. The lobbyists were from Clear Channel and other billboard operators. The land value was moot per se, as they applied the charge to the owner of the signage, with or with land. The ACD had given guidelines to assessors on valuing them based on income or sales and this bill was passed quickly. When a committee is meeting, if all are present they can start early. So the scheduled meet was 9 am, but by the time the ACD representatives got to the meeting at 9, the bill had long passed out of committee and was voted the next day in the ledge...Arkansas politics at its best. I mentioned a certain senator by name both ACD reps made a face that indicated they had already ran afoul of him....I understand. The man is a back stabbing prick and I suspect he has dreams of being governor someday...and he is young enough he is likely to do so.

 

[Meandering]

What I've seen is both land that is owned by the billboard company and land that is leased by the billboard companies. But in both cases the costs to build the billboards falls on the billboard company, so when valuing a site with a H&B as billboard space, there is no cost approach to apply. When valuing the leased fee of leased land, there is no cost approach to apply. Before the light board signs, income was fairly predictable. But with the light boards, we've seen advertisers move from static signs to light boards and back again to static boards, even if the location is not as good.

Personally, I find it easier to pay attention to a static board than the light boards. You have to spend too much time reading each ad before it disappears and you are past the sign. I don't want to take my eyes off the road that long. So unless there is a traffic jam, I ignore light board signs, and I think many drivers do, unless it's a single picture with very few words. Like Pizza Hut, next left. That works. Anything more than that, I'm busy driving.