Forensic Appraisal Process – Special Properties – Billboards
Billboards are a valuable form of advertising but determining the valuation of a billboard for eminent domain is complicated. And until the Texas Supreme Court recently ruled that billboards were not removable personal property, getting compensated for billboards that were taken or destroyed was difficult at best.
However, on April 24, 2015, the Court ruled that billboards had to be dismantled or destroyed to be removed making them fixtures that should be included in the valuation of the land. As such, condemning parties would need to provide just compensation to their owners.
The typical approaches to billboard valuations may not take important factors into consideration. These approaches include -
- Replacement Cost minus Depreciation plus Land Value
- Market or sales comparison
- Income capitalization including land and leaseholds
But each of these approaches leaves questions and concerns for the sign owner that may not be addressed during the appraisal process. Experienced eminent domain appraisers know that these approaches may fail to consider -
- Physical characteristics
- Traffic counts
- Site demographics
- Sign rent
- Operating expense ratio
- Ground rent costs
- Real estate taxes
- Cost of capital
There may also be concerns or questions for landowners that may be factored into the appraisal including –
- Property rental income
- Lease escalations
- Lease lengths
- Site impacts
Billboards are often impacted by transportation projects such as highway expansions and street widenings, and companies are often forced to relocate. What is just compensation in these cases? We know that billboard placements are chosen because of demographics and traffic counts. And we know the value of the billboard is just one aspect of loss you may suffer. Loss of business goodwill and relocation costs must also be considered. Our team of attorneys, real estate experts and forensic appraisers will ensure you receive an accurate appraisal for your signage and compensation for damages.