Sign sites for off-premise advertising signs shall be valued for the present value of the land lease or by the analysis of comparable sign site sales. An advertising sign site becomes damaged as a property interest only if a legal advertising sign is unable to be relocated to the remaining property under the procedures discussed in the

ROW Acquisition Manual

, . The present value of the sign site may be found by the appraiser by discounting the remaining lease payments to the date of the appraisal using market-derived data. If TxDOT ROW PD has been able to verify that there is a valid ground lease associated with the sign structure currently in effect with a remaining term of more than a month to month time period, the lease document should be provided to the appraiser.

The valuation of sign sites utilizing discounted cash flow must be based on the economic or market rent derived from comparable sign site rentals. Discounting factors such as vacancy rates, expenses and discount rates are to be derived from market-derived data. As a guide and check, the value of a sign site should not exceed the capitalized value of the site.

The above information and observations apply to how such a ground lease may affect the overall valuation of the parcel itself, relating to the value for owner of such parcel.

When an off-premise advertising sign structure is acquired by the State prior to the valuation date of the land on which it is located (whether the signed is owned by the fee owner or a sign site lessee or easement holder), any resulting changes in highest and best use or value of the land should be ignored, because they are a result of project influence. For example, to the extent the sign site contributes to the value of the land, the State's acquisition of the sign for the same project cannot be the sole basis of any change in highest and best use or value of the land.