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Billboards: When it really pays to advertise

<i>Billboard companies see new interest from landlords looking for revenue</i>

It’s a sign of the times. Large billboard-type ads are an increasingly familiar sight on the facades of vacant retail properties in Manhattan, according to outdoor advertising companies who used to beat the bushes hunting for landlords with well-located buildings for advertising campaigns.

In a down market, it appears landlords are recognizing the potential revenue — and even visual appeal — outdoor ads can deliver. Advertising firms said they’ve seen a dramatic increase in the number of Manhattan buildings that have become available for ad campaigns. In addition to extra money, the advertisements are low-maintenance. Unlike indoor tenants, ads don’t complain about broken air-conditioning or plumbing problems.

An executive with Inwindow Outdoor, an outdoor advertising firm, estimated his company has seen a 50 percent increase in the number of Manhattan properties available for “storescape” advertising since the first quarter of 2008. Big and small property owners are expressing interest, said Ray Lee, managing director of real estate for Inwindow Outdoor, whose clients include HBO, HSBC and Starbucks.

“We’re talking about people managing 1 million square feet,” Lee said. “They want to lease out vacant storefronts to us as easily as someone who owns a five-story walk-up in Soho.”

Inwindow’s storescapes are graphic billboard-type ads positioned at eye level on building surfaces and windows. Made of vinyl, the ads range in size from 25 to as much as 100 linear feet, Lee said.

It wasn’t so long ago that Inwindow pursued landlords with strategically located buildings in desirable neighborhoods. Now “the landlords are approaching us,” Lee said. “We’ve seen an increase in terms of the number of listings we’ve acquired and also the receptiveness of landlords.”

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Landlords see the advertising revenue as a way to offset fixed costs such as utilities and insurance, and also to enhance a building’s appearance, he said.

Bill Walther, vice president for asset management at G Holdings, a commercial development company, said his firm was concerned about dressing up the exterior of its 43-story building, a Marriott Residence Inn, while it was under construction on Sixth Avenue between 38th and 39th streets.

A series of billboards was installed on the windows facing Sixth Avenue. Walther said the ads made the building look more presentable while it was being built. The income, while nowhere near as lucrative as an indoor lease, was a secondary bonus, he said.

Walther declined to comment on how much the advertising generates in income, but Lee said landlords can make $2,000 to $8,000 a month for a monthly advertising campaign, depending on the building’s location and frontage. Buildings in Midtown command the highest rents.

In Soho, Kurt Trenkmann of Trenkmann Estates agreed to lease the exterior of his company’s seven-story building at 403 Broome Street. Ads appeared on the property on and off for a year until a new tenant moved in. The ads look similar to the ones that appear on subway station platforms, Trenkmann said.

They were an easy source of income and were not an “eyesore,” he added. Trenkmann wouldn’t hesitate to make his building available for future campaigns. “It’s just extra money,” he said.

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