Billboard rental income

[Robert Dunkle]

I'm doing an appraisal on a property that fronts on a US Highway. Part of the income of the property is a two sided billboard that is owned by Fairway Media. The owner indicates to me that the rental income from the billboard is $1,200 per month. However, he cannot/will not furnish me with any proof of the amount and that seems rather steep. The billboard is located in West Siloam Springs, Oklahoma, a small town that borders Siloam Springs, AR. There is a large amount of traffic on the road (Highway 412) and the billboard is just west of the Cherokee Casino located in West Siloam. It has been several years ago in another life (industry), but I was wanting to do billboard advertising and got a quote then of $800 per month to have advertising that would be seen by 80% of the traffic in a larger town than West Siloam i.e. many billboards being used at the same time. Does anyone have experience with the actual rental rate to the landowner? I know, I know, that it varies by location and am ready for that. This just seems to be alot!!...TC

 

[Michael S]

The actual quoted rent for a typical freeway billboard in the Albuquerque area is about $1,000 - $2,000 per month depending on location.

There's a billboard in Albuquerque that's owned by Clear Channel located along I-25 with the highest traffic count in the city (and state) roughly 170,000 vehicles per day. The owner reported his income is $12,000 per year on a 3 year lease. Another billboard leased by Clear Channel further north with traffic counts of about 150,000 vehicles per daywas getting rent of about $1,500-$1,750 per month, per side a couple of years ago. The land owner got the greater of $9,000 per year or 20% of gross revenue. From the information I got the $9,000 was higher by a decent margin.

 

[Robert Dunkle]

Daily traffic count at this location is under 30,000 cars per day. That convinces me further that $1,200 per month is not a reasonable figure. The lessee of one side of the billboard is a tiny pawn shop located just to the east of the sign. The sign could have gone on that property as well as where it went.

 

[GregoryK]

Actually, $600 per side per month may be reasonable. Check out signvalue.com - they have listings of billboards for sale and many show the annual rent. I have also found that companies such as Lamaar Outdoor Advertising will provide you with lease info on comparable properties. A billboard in a small town in Alabama having a traffic count of less than 15,000 was bringing $600 per side/month that was part of an appraisal I did back in April. Other advertisers I know are Drury Outdoor Advertising.

 

[Robert Dunkle]

Actually, $600 per side per month may be reasonable. Check out signvalue.com - they have listings of billboards for sale and many show the annual rent. I have also found that companies such as Lamaar Outdoor Advertising will provide you with lease info on comparable properties. A billboard in a small town in Alabama having a traffic count of less than 15,000 was bringing $600 per side/month that was part of an appraisal I did back in April. Other advertisers I know are Drury Outdoor Advertising.

Thank you for that website! Found 3 locations in towns with similar traffic count that rent to the advertiser for $200 per side, figure no more than half would be paid to the landowner.