This case involves a lease dispute over an outdoor advertising space. The owner of the billboard, a prominent outdoor advertising company, rented out a billboard to the plaintiff for an 18 month period. During the first 2 months of the lease, a local municipality zoned the property to build a tourist plaza. In response to anticipated foot traffic to the area, the outdoor advertising company increased the billboard rent but the plaintiff terminated the lease. An expert in commercial property valuation was sought to perform a rental market valuation and review case documents to determine whether or not the initial rental increase was reasonable for the billboard rental market.
Question(s) For Expert Witness
- 1. Please describe your experience as it relates to valuation of rental pricing for billboards.
- 2. How would you determine whether or not the initial rental increase was reasonable?
Expert Witness Response E-116092
I have 30 years of commercial real estate experience in both asset management and finance. During this time, I have overseen small office buildings, retail centers, industrial buildings (single user and multi-tenant), and apartment buildings. I have negotiated leases, I have prepared analysis for valuation that incorporated a survey of lease rates and I have reviewed appraisals of valuations that were based upon various types of rental rates, full service, modified gross, etc. Depending on the property type, the condition of the property, the location, and the market at the time, I believe a range of rates is probable. An exact rate conclusion would be difficult, but a reasonableness test is possible. Keep in mind it all depends on the property type, the condition, the location, and the market at the time.