A landmark building emblazoned with a logo can put a company on the map: Look across the evening skyline of any major Canadian city and you see the glowing names of banks, accounting firms and telecommunications companies – signs as iconic as the buildings they’re stamped on.
“It certainly helps their identity,” said David Bowden, president of Colliers International in Canada. “For companies that are relatively small, if they’re able to secure building signage it can help them have an image that’s bigger than, in fact, they might be.”
As opposed to third party advertising – where a company pays to put its name on a stadium or billboard – “on premise” advertising is signage on the building where a company resides.
Although it often comes with a big rent bill, an office tower sign can be a substantial value, says Julian Brandon, vice-president of client advisory services and office leasing at DTZ Barnicke. Such a sign “can be an advantage for branding, way-finding, customer identification, brand loyalty, all those things,” Mr. Brandon said. “I’ve been told by some landlords that a sign like KPMG’s [at the Bay Adelaide Centre in Toronto] should be equal to a million dollars a year.”
Using Toronto as a test case, here’s how iconic signs get atop office buildings.
To brand or not to brand
Signage can attract big-name tenants but there are risks. If a building becomes branded by a particular company, competitors can be discouraged from leasing in the space. As well, even if a tenant leaves a building, the name might not.
“There’s a couple of examples in Toronto of towers where the tenant left and the name stuck,” said Mr. Brandon. For example, 77 King West was formerly the Royal Trust Tower, and though it’s now unnamed, people still call it RTT. And though 181 Bay Street – formerly called BCE Place – is now called Brookfield Place, the BCE name has stuck. “It’s almost like a nickname for a junior hockey player – when he gets to the NHL he has a tough time getting rid of the nickname,” Mr. Brandon said.
Buildings can also take on the identity of the tenant, which can have disadvantages. “Once the building is branded under a corporate entity, then the building is influenced by what kind of a corporate citizen that entity is,” said Mr. Bowden. “So leasing would be more challenging in a building called the Enron Building, for example.”
Signage or naming rights?
There are three ways a landlord can allow a tenant to put a sign on a building. First, the landlord could offer signing rights as part of the occupancy deal, as with KPMG at the Bay Adelaide Centre. Second are naming rights, meaning the building is officially named after the tenant, such as Toronto’s Telus Tower. Third are complex naming rights, in which a series of buildings are named after the tenant – one example is Toronto’s TD Centre.
In recent years, owners have moved away from naming rights, Mr. Bowden said. “Landlords are providing signing opportunities for tenants but not naming buildings after them,” he said. “I think part of that is the nature of the ownership has shifted over the last 15 to 20 years. The conventional private developer is less common.”
According to Mr. Bowden, while private developers tended to buy and sell properties more quickly, the large institutions that own these types of buildings hold on to them for decades, and so want to have more influence and flexibility over the identity of the building.
Sign design
Once a deal is struck between landlord and tenant, the business must decide on the size, load and mounting options, said Paul Kenny, president of ID Inc., a Toronto-based company that designs, manufactures, installs, leases and maintains these kinds of signs, which can cost “seven figures,” he says.
