What to build?


#1

Frank:

Of course this may be a tough question without specifics but type of sign do you build in the following conditions:

0 - 5,000 traffic count in both directions 24 hour period:

5,000-10,000 traffic count in both directions 24 hour period:

10,000-20,000 traffic count in both directions 24 hour period:

20,000 - 30,000 traffic count in both directions 24 hour period:

30,000 - 40,000 traffic count in both direction 24 hour period:

50,000 +

The point is I have ground leases in the same township but traffic counts range from 0 to 30,000. In the areas where the traffic counts were higher I was going to spend the money and build nice new signs, for the lower traffic count location I was thinking maybe wood or a cheaper alternative than $25-30K I was going to spend on the higher traffic spots. Now I may be able to get the same money for all spots because Lamar is but found out the big guys give away these lower traffic locations as part a larger package deal. This way they always look rented but maybe not necessarily get paid for that location.

Anyway I am struggling to figure out what to build and need some guidance, thanks.


#2

First of all, you’ve got to make money, or you should not build anything. The economics will dictate what you should build. Try and stick with standardized sizes – I would suggest 30 sheet posters, since you could sell those to Lamar or whoever later down the road. But I would make sure I understood the rental rates and built structures that will at least cash flow after debt. That may mean 30 sheets on wooden telephone poles on the smallest traffic counts, I-beams on the medium counts and monopoles on the highest counts. If the numbers work, I would look at 14’x 48’ on the top counts, if they are on highways. But don’t build anything that is negative cash flowing. If that’s the case, sell the leases and permits to Lamar, of whoever gives you the best offer.


#3

Thanks Frank:

  1. Where can I look to get the old telephone poles?

  2. I beams, please explain further?

  3. If I cannot get the telephone poles can I use treated lumber?

  4. I am assuming that the engineers/architect will know how to design a structurally sound billboard out of telephone poles?


#4

You can get leads on telephone poles from the utility company. I-beams are steel beams. You cannot buy treated lumber with the strength of telephone poles, but you can build a smaller sign out of them, normally with reinforcement.

Any engineer can design a sign out of telephone poles – and you will need engineered drawings normally to get the permit for it.