Help on billboard lease, clearchannel cut lease by 50% (Los Angeles, Industry: leases, insurance)

[klin6]

Hi guys, I'm new on this forum and hope someone could give me an idea here. We bought a property in City of Industry 3 yrs ago and have a billboard right in front of our property. It's time to renew the lease and the billboard company rep. asked us to lower the lease by 50%. The lease actually haven't gone up since 1995 and it's only around $950 a year! It's a two sided full size billboard. The billboard actually is creating security problem for us since people can climb up to our roof easily and we have beer bottles up there all the time. I'm thinking about asking for at least $3000 a year but really have no experience on this. If they only offer $450 and I have to deal with the graffitti and security problem then i'll just have it removed. If someone can give me some advice I would really appreciate it. THanks in advance.

[RobE]

Hmmm....

The problem here, it seems to me, is liability. Even if they give you what you are asking for, all it would take is one of those drunks falling from that billboard and you could find yourself in court. You might ask for a lower sum in exchange for being legally indemnified for any accidents arising out of Clear Channel's use of that billboard.

By the way, at less than a tenner a day, I think you're shortchanging yourself. Find out the square footage that the billboard uses and then compare that with other commercial properties and charge accordingly.

[BennyPhoenix]

A 2sided double faced billboard for $950 per year?
They are shafting you. Those typically go for anywhere from $500 to $2000 PER MONTH! Depending on traffic. Call a competitor.
Just to give you an idea. I have a small double faced billboard in a below avg traffic street that gets $130 per month and that lease is about 10 years old.

[ehcsrop]

I'd secure the ladder before anything else. Taking the thing down won't be cheap and you'll need a permit. Go for what you can, but it does not sound like you're getting enough. What streets or fwy does it face? It is lit at night? Little neighborhood BB's don't get much.

[BennyPhoenix]

You probably cant take it down easily. It is likely owned by clearchannel. You would also be reducing the value of the property by not having it in place.

[klin6]

Thank you for the input guys. If they refuse to increase the lease then they have to take it down right? The BB is lit at night and it's on a major street in City of Industry, a commercial area. No nearby BBs within sight however.

[klin6]

Just went and check clearchannel's rate card, they're charging at least $620 per month per face so that comes to $14,880 per yr. I have read it's fair to get 50% of the lease what do you guys think? Thanks again.

[JHuprich]

I currently represent an owner that was told a two-sided sign on a major street in Los Angeles only received $9000 in gross annual revenue, despite that Verizon, ESPN, Universal, Warner and McDonalds had leases that year. Contract provided 20% gross revenue, or $2000, whichever was more. Would you believe it if I told you that for the past 5 years, owner has never gotten more than the $2000? We are preparing a lawsuit for breach of contract and fraud. Joseph Huprich, Esq. ([url]www.huprichlaw.com[/url]) 626-797-0275.

[outdoorequitiies]

You can avoid your risk of rent reduction by selling your billboard lease for a lump sum payment. You can sell your lease at [URL="http://www.outdoorequities.com"]www.outdoorequities.com[/URL]

[karenliny]

Industry standard is 15 to 20% of gross revenue. And rate cards are FULL price, which almost no one pays. Why would a billboard company pay 50% when THEY are responsible for permits, maintenance, posting, insurance, and electricity?