Preface (By David Moore, CEO, Axiom Global Wireless):

Billboards are often one of the most misunderstood asset classes tied to commercial real estate. While they may not enhance a property's aesthetics, they can generate significant long-term passive income for property owners with very limited landlord responsibilities.

Outdoor advertising dates back to approximately 1835, when large-format posters—roughly 50 square feet in size—were hand-painted by Jared Bell to promote the Barnum & Bailey Circus. Since then, the industry has evolved into a major advertising platform across the United States.

Today, there are approximately 354,000 static billboards and more than 16,600 digital billboards nationwide, not including the vast number of transit and place-based advertising displays throughout the country.

For property owners, billboard leases can represent substantial free cash flow. Aside from providing access to the site, landlords generally have few operational obligations associated with these installations.

At Axiom Global Wireless, our team assists property owners with billboard lease negotiations, renewals, and new build opportunities. Understanding the economics behind outdoor advertising is critical. Billboard operators closely protect these assets because of the recurring advertising revenue they generate, particularly in high-traffic corridors.

The Assignment

Our client owned a double-sided billboard located along a major freeway with strong visibility and traffic counts. The advertising space was consistently occupied by national and regional corporate advertisers, making the location highly valuable to the billboard company.

The national billboard operator approached the property owner with a proposed 10-year lease renewal. The initial proposal included:

• A base rental rate

• Year 1 renewal annual rent escalation of 3% for the previous year

• Additional 15% increases every five years

While the proposal appeared reasonable on the surface, the property owner wanted to better understand the true market value of the lease and engaged our team for representation.

Our Strategy

After reviewing the location, traffic data, advertiser demand, and projected advertising revenue potential, our team determined the original offer significantly undervalued the asset.

Rather than simply negotiating a higher fixed rental amount, we structured a more aggressive compensation model designed to align the property owner's income with the billboard operator's revenue performance.

The Result

Through negotiations, we secured:

• A base rental rate approximately 25% higher than the tenant's original offer

• A 35% gross revenue share structure tied to billboard advertising income

Based on traffic counts, advertiser demand, and estimated monthly advertising rates for comparable freeway-facing boards, we projected the revenue-share component could potentially double the owner's annual lease income over time.

Key Takeaway

Billboard leases are not simply "set-it-and-forget-it" agreements. In many cases, property owners are accepting below-market terms because they lack visibility into the revenue potential generated by the advertising company.

With proper representation, landlords can often leverage:

• Traffic counts

• Market demand

• Digital conversion potential

• Advertising revenue

• Location scarcity

to negotiate significantly stronger financial terms.

For many property owners, a billboard lease may be one of the most valuable yet overlooked income-producing assets attached to their real estate.