Say I found a building for sale that includes two lighted billboards on the roof. The owner of this building currently leases the billboards to some national company; state issued permit numbers are on the billboards.
My thought is buy this building with the billboards and after the lease expires on the billboards,
- enlarge them
- later upgrade them to digital
- perhaps move them to a more valuable location
I checked with the state and as far as I can tell the permit numbers allow the above.
The state permit numbers on the boards are issued to the national company who leases the physical billboards.
What is the valuable thing to own in this situation – the physical boards or the state issued permits?
Most permits on billboards are grandfathered and do not allow for modifications. Additionally, a sign on the top of a building is normally a “roof-mount” made of angle-iron and can’t really be moved. Before you do anything, you need to get a much tighter grip on the laws in that state and city. What you are describing does not sound legal iin any state I’ve ever operated in.
Thanks for the comments.
This deal is in Michigan.
I understand the “grandfathering” and I understand the permit drives the restrictions/allowances of uses for the physical billboard.
I’m going to have to call the state again.
You should check with the local municipality as well. Their sign regulations may be far more restrictive than those of the state government. If the municipality won’t let you rebuild, then I would think it wouldn’t matter what the state said.
Also, in my experience (limited to one part of the country, not including Michigan), if faced with the situation of an expired lease and a landlord (potentially you) who isn’t willing to renew, they would rather cancel the permits than turn them over or sell them to you. They aren’t going to do anything to help you make money on this.
Good comment. I called the state today. The person I need to speak with is on vacation for the week so I can only speculate.
I think you might be correct; the physical board and the permit can’t exist if one goes away. Though, perhaps I can go for competitive bid on lease renewal from the other companies that have billboard permits in this state. If new physical boards cannot be erected, then the physical board has value.
Meanwhile, I’ll check with the locals.
I am hopeful being the owner of the physical board, I would automatically be eligible for the permits to display advertising. I want to upgrade to Digital so I can display my messages in between the paid ads.
While we wait… What’s a good ROI on billboards?
Spoke to the state today.
Basically, the National Company owns the permit to display advertising. If I buy the building and subsequent physical billboard signs, I’d have to obtain a permit to display advertising. No new permits are being issued. So basally I’d have to find a seller of a permit to use the sign for fun and profit.
The nice person at the state told me the specific national company currently advertising on the signs never sells their permits.
So that’s that.
Better safe than sorry.
I once bought a sign early in my career without checking the status on the permit – and I had to tear it down. Bitter lesson.