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trends in billboard aquisitions

New Development is Red-Hot

Being heavily involved in both the brokerage and lending markets, Stark Capital Solutions has a unique perspective to analyze and account for certain industry trends.  The booming M&A market has been well publicized over the past 6-12 months.  However, our 2021 data suggests that independent operators have been equally busy securing new development opportunities.   

In fact, in the past 12 months, Stark Capital funded more new billboard locations than the past three years combined.  

Let’s take a quick look into the 2021 numbers from the loans we funded: 

How many new billboard development sites were funded? 
98

How many new advertising spots became available from these funded locations? 
714

Was there a particular region that was “hotter” than others? 
Overall, we saw the greatest number of new development sites in the Midwest region. However, like most years, it was very diversified. We funded new deals in nine different states: Connecticut, Indiana, Ohio, Kentucky, Michigan, Pennsylvania, Alabama, Colorado, and California.   

Out of all lending deals completed, what was the breakdown by deal type?  
72% – New Development  
21% – Refinances 
7% – Acquisitions 

What type of loan structure are operators using at Stark Capital for new development financing?  
We have created a two-step “Construction-to-Permanent” financing package tailored to 
new billboard development:

Step #1) Construction-Related Facility: Revolving drawdown line to fund 100% construction, structured with an interest-only payment schedule which allows for cash flow to ramp up on new builds.

Step #2) Permanent Facility: After 12 months, the line converts to an amortizing term loan comparable to traditional-bank rates.  

How many loan defaults has Stark Capital experienced in the past five years?  
Zero. 

When is an appropriate time for operators to reach out to Stark to set up a new build loan facility?  
We are open to discussing projects and options with operators at any stage of the development. However, because we understand the industry and have an efficient underwriting and approval process, it’s best for companies to reach out when they have leases and permits in hand and are ready to begin moving forward on development.   

What are your predictions for 2022?  
We predict another strong year of deploying capital in the industry. With the current M&A market, we foresee funding more mid-market acquisitions ($2MM-$5MM), as well as assisting new and existing clients with their new development sites.

With more than two decades of experience in the billboard industry, Stark Capital Solutions has built a reputation of honesty and integrity with many trusted partners.  If you have new sites that you’re looking to develop, let’s talk about how Stark Capital can best assist in completing your 2022 projects.