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Updated over 1 year ago,

User Stats

9
Posts
4
Votes
Andrew Glavinic
  • Flipper/Rehabber
  • Inland Empire
4
Votes |
9
Posts

Billboard Lease Agreement Question...

Andrew Glavinic
  • Flipper/Rehabber
  • Inland Empire
Posted

Hello everyone,

I have a pretty darn specific question about Billboards. I will set up my problem, tell you a few things I am going to try, and ask if anyone has had experience with this or has any other ideas. 

So I manage a commercial property in Long Beach, CA and there is an outdated lease for the billboards on the roof. The monthly income is $55 a month (Not worthless but close to it considering the building would look nicer without them) and the lease was created in 1979. The signaled intersection gets around 38,000 VPD according to LoopNet which the billboards advertise to. I have done a decent amount of research and know that I can get a better deal than this at this location. I can terminate the lease at any time with a 60-day notice. The problem is section 13 of the lease which basically says that the Billboard company owns the billboard and can tear it down at any point during the lease or after the termination of the lease. 

I've spoken to other Billboard companies and they basically don't want to deal with it at all because of this and because Long Beach is extremely strict with billboards (The city is, understandably, trying to make the city look nice). The billboard is considered non-conforming use and is Grandfathered in. All you can do is repair the existing billboard (even if an earthquake knocks it down you are not allowed to put it back, Welcome to CA lol).

The reason this adverse clause for the owners of the building is in there is to protect the Billboard company from losing their investment to another company after a couple of years. This is totally reasonable and I understand that it is there to do this. My job is to run this property the best I can for the owners and they have had this deal for 42 years so I wouldn't lose sleep over getting a new deal.

My only ideas, as of now, are first, to send this over to the lawyer to make sure there is no easy way out of this agreement, which I doubt but it's worth a shot. Then second, renegotiate a lease with the current Billboard company that transfers ownership of the Billboard to the owners of the Building. (The Billboard company reached out to the previous manager to sign a new lease a few times but the previous manager didn't have the time to get it done.) With the goal of getting market rents whenever this new lease agreement ends. 

 See Pictures of Billboard and Building

Any advice, people I should reach out to, or other ideas are much appreciated.

Thank you in advance, you are all great!!! 

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