We have property located at the intersection of two major US Highways
in a city of 50,000. What is the expected income range, as a lessor,
from leasing the property to a company for an outdoor advertising
billboard.

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Clarification of Question by shep31-ga on 28 Jul 2003 18:00 PDT

To simplify the question:  What is the percentage of gross revenue
that
and advertising company generally pays the land owner for the lease of
his propery for a billboard.  (One sided and or two sided billboards)

To ascertain the value an outdoor advertising company would pay.  It
would be important to obtain the following

1. Which highways are these?  This will be used to determine the
number of vehicles passing the billboard.  The message of the
billboard is likely to exceed the city's population of 50,000.

A good proxy for the price they will would be a multiple of the
traffic. (i.e. $0.05 * # of vehicles * length of tenure)

Just my take on this.

In this dated article (1996) the advt rates quoted in a restaurant
owners magazine (http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=595),
the going rate then was $700 - 2500 p.m. So adding an approximate
inflation adjustment of about 4% for 7 years it runs to approx 32%
increase. This makes the range $920 to 3300 p.m.)

 What is the expected lease rate depends on the traffic on the two
highways, availability of other billboards (some states are more
restrictive than others*) and visibility of the billboard. Some minor
factors include duration of visibility and local economy.

 Additionally, you could contact a few of the top 10 companies listed
below that have billboards around your area and ask for their rates
and get a feel for your estimate.

*"There are approximately 400,000 billboards in the United States,
according to OAAA. Billboards are found roadside in every state except
Maine, Alaska, Hawaii and Vermont. Los Angeles has the most
billboards, while Washington DC has the fewest."

Related articles: 
An outdoor Advertisement on Roads/Malls -
http://answers.google.com/answers/main?cmd=threadview&id=207462

 
Top Ten Outdoor Companies:
http://www.oaaa.org/outdoor/facts/top10outdoor.asp#Top10oc

Drive-By Promoting--Billboards Fit Today's High-Speed Society
http://www.restaurant.org/rusa/magArticle.cfm?ArticleID=595