Frank,
For all of your experience in obtaining land leases, what % can you place on the number of property owners accepting an agreement vs. declining?
With the owners that declined, what % of the agreements couldn’t get done because of the dollar amount? Thanks.
The % acceptance ratio would be based on the competitiveness of the market. In a big city, the rate is probably 30%. In the country it can be as high as 100% if you are the only person working that market.
In the city, it is not uncommon to have am impasse with the owner over the dollar amount (although that’s weakened with the recession). In the country, the landowners are much easier to work with, and I don’t think I’ve ever had a deal that was killed due to “not enough money”. Ive seen ground rents in the country of $100 per year – something that would be impossible in the city.
Most landowners don’t really understand billboard economics. In cases where the owner wants more, feel free to show them the actual economics. Although they may be getting 20% of revenue, in many cases that translates to 50% of net income after expenses. Often the best way to cure the greedy landowner is to educate them on the realities of billboard economics 101.