Developers Can Generate Huge Revenue By Selling Naming Rights To Buildings

Dan Ping
Tampa Bay Business Journal
June 15, 2007


Cameron Kuhn, an Orlando developer, has come up with a new revenue stream selling name placement.

A high-rise by any other name is still a sweet moneymaker for Cameron Kuhn.

Earlier this year, the Orlando developer revealed that his massive mixed-use project at Orange Avenue and Church Street no longer would be named PremiereTrade Plaza. The Altamonte Springs-based financial services and software company that originally had the naming rights backed out of a deal to lease 60,000 square feet of office space.

To be sure, Kuhn eventually will get big bucks from those naming rights. But he also stands to generate millions of dollars in other innovative ways, such as antennae rental space and ads printed in a variety of unusual places in the building, temporarily renamed The Plaza.

"The great thing is all that money drops straight to the bottom line," said Kuhn, who is considering Tampa and several other cities in his future plans.

Long-standing tradition

Naming structures or spaces after companies is as old as Times Square and Wrigley Field.

In fact, stadium naming rights have grown to be a $4 billion market alone, according to London-based trade journal Managing Intellectual Property. Yet owners of traditional office space are only beginning to tap the revenue available through naming rights, Kuhn said.

"Years ago, the name of the building usually went to whichever company leased the most space," he said. "Today, you pay."

The cost to put a name on a building depends on several factors: height of the building, exposure to major highways, restrictiveness of city sign ordinances and how well the building stands out -- both figuratively and literally.

Naming rights for commercial structures in the Tampa Bay area currently are limited strictly to sports venues. For example, Raymond James Financial Inc. pays at least $2.5 million annually to stamp its identity on Tampa's football stadium.

Other companies, primarily financial institutions, put their names atop the Bay area's tallest buildings as part of substantial lease deals.

In Orlando, The Plaza's $300,000-a-year naming rights are rivaled only by Amway Arena, which costs $375,000 annually.

Dynetech Corp. CEO Larry Pino would not reveal how much his firm paid for naming rights atop the new 31-story Dynetech Centre being built at 111 E. Washington St., but he did say naming rights were key to the company moving there.

"Dynetech had established a commercial standing which needed to be reflected with an appropriate brick-and-mortar presence," Pino said. "If we couldn't obtain naming rights, it would have been a deal breaker and we would never have ventured to the new location."

Easy money for building owners

It's not just the naming rights that generate ancillary revenue. Antennae atop buildings can represent thousands of dollars annually in lease payments.

In fact, Kuhn charges $45,000 annually to place an antenna atop the 10-story Angebilt Building on Orange Avenue. And he cited the price to place an antenna on top of The Plaza, at 21 stories, at $90,000.

Another revenue generator for Kuhn is advertising that will be printed on the back of every ticket sold at The Plaza's 12-screen movie theater. The developer also will benefit from advertising sold on walls inside the parking garage.

In addition, the stripes separating each of the building's 1,600 parking spaces will be painted to accommodate advertising. In return, Kuhn receives $1.50 per stripe each month, with those 3,200 stripes generating about $1.1 million over 20 years.

"Not bad for something you're going to drive over," he said.

As to the building's naming rights, Kuhn said he currently is negotiating with Mirabilis Ventures Inc., a private equity firm, to consolidate its three downtown Orlando locations into the 1.5 million-square-foot Plaza.

"The No. 1 thing they mentioned was naming rights," Kuhn said. "You put anyone's name up on a building the size of The Plaza, and people instantly want to know who that is. It adds to a company's gravitas."