Throughout my 30-year career, I’ve noticed an uptick in how long it takes to close deals. These days it seems to take longer than ever.
I negotiate lots of billboard leases. Unlike commercial leases, billboard leases tend to be much shorter documents and generally contain more favorable tenant provisions.
At the beginning of April, I began working on a lease for the construction and installation of a back-to-back digital billboard. Digital billboards require a significant amount of capital, which is typically funded by the tenant, and recouped over time from the sign revenue. Although the business terms were agreed to in early April, this lease remains unsigned, leaving money on the table for nearly 1 year since no one made sign revenue at this location in 2024. Part of the hold up is that in order to build a new billboard at the site, an advertising permit issued for a different billboard needs to be relinquished.
When I got involved, I understood that this important yet simple fact had been conveyed by my client, and AGREED TO by, the proposed property owner. In an ideal world, legal fees would not be expended until this vital regulatory issue had been resolved by the parties.
Nevertheless, the nuances of the Lessor’s desire to preserve its existing asset has taken on 50 shades of grey, and we’ve been going round and round on this issue for months.
I asked my client: “This deal’s taking months. What do you attribute it to?”
I found her answer very interesting: “There are too many cooks in the kitchen.”
In this deal, my counterparty has an attorney, who is zealously advocating for his client and provided language about the existing sign, which doesn’t reflect the reality of the situation and was therefore rejected by my client. Then, there is the proposed Lessor. It still remains unclear whether the Lessor owns the property where the digital billboard is proposed to be built. That creates the question of whether Lessor has the authority needed to sign the lease and convey to Lessee all of the rights needed to install and operate the digital billboard, without first obtaining the consent of the property owner.
And then there’s a business intermediary. Recently, we had an all hands call scheduled to discuss and hopefully resolve the threshold issues of (i) who owns the property (ii) does Lessor have all requisite authority to do this deal, and (iii) is Lessor willing to agree to relinquish its signage permit on the other sign, so as to enable the digital billboard to be built? Only the business intermediary made it to the meeting, and there has been no further word from them in several weeks. Every communication about this lease is vetted through the intermediary, who, of course, has a vested interest in looking good for his client, and although he purports to have a mandate to get this deal done, he probably is paid by the hour and came to the call with only questions and no answers.
Getting to a finalized lease at this site remains to be seen. Check back with me next year!
Aimee B. Davis Law P.C. is committed to advising its clients and resolving issues relating to the legal and business matters that are important to them. If you have any questions, please feel free to contact us at (917) 617-2243 or email aimee@aimeebdavis.com.
Aimee B. Davis Law P.C.
