I am currently in Escrow with 2.8 acres of commercial highway land on an off-ramp that also allows outdoor billboards. My dilemma is I have been offered a considerable amount more for the land from a developer to build a gas station & restaurant on the land. I want to sell the land but want to keep the rights to a future billboard to lease to a billboard company or construct a billboard, not sure yet. I have not applied for a billboard permit and only have 60 days left to close escrow.
You might do some due diligence to see the true potential income from keeping the easement. If it’s an area where signs rent for $500 per month per side, for example, then your groundrent might be $200 per month. There’s nothing wrong with that, except at a 10% cap rate it’s only $24,000, as compared to the deal with the developer on your land. I’m betting that they are offering far more. So don’t blow your deal on the land just to try and get the billboard rent. If the developer doesn’t care, then I don’t know what the problem would be, since a permanent easement can be written fairly generally on sign location. However, many cities have laws on maximum number of signs per parcel, and your billboard might keep the tenant from putting up their own sign. You might check that out, too.
Thanks soo much!! I really never thought that if tried to keep the groundlease for the billboard that it could affect the whole deal. I will also take your advice & check with the County to see the max # of signs allowed on land.
Great info & advice