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Cap Rates for Leased Gas Station

Discussion in 'Commercial/Industrial Appraisals' started by Michigan CG, Jul 14, 2007.

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  1. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    218
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Since I am working today, thought I would post this and maybe get some advice for a project I am starting in 10 days or so.

    Lady is leasing a gas station that does $1.8M in gross sales in gas and convenience store receipts. She is paying $22,100/year in rent absoultely Net. Obviously this is not Market Rent...but she has been there for 25 years and her and owner are buddies. She has a buyer for the business only, so I am doing a Business Appraisal per Standards Rule 9.

    I can find Market rent pretty easily (the owner is going to raise the rent on buyer), but what I am looking for is sources for cap rates for leased gas/convenience facilities. Community is 360,000 ppl, low unemployment, property is in good condition, tanks are new in last 10 years, good location.

    Thanks for any help...now back to work.
     
  2. PL1957

    PL1957 Senior Member

    16
    Jul 19, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Illinois
    For cap rate info try:

    http://www.bvmarketdata.com/
    http://www.bizcomps.com/

    You comment on finding market rents pretty easily is pretty surprising to me. The c-store/gas stations I've seen usually have had extremely complex rental agreements, often including equipment as well as a petroleum supply contract, complete with rebates based on volume and other factors. Make sure you're comparing apples to apples.
     
  3. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    218
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Thanks '57:

    Buyer owns numerous facilities just like the subject. More info than I will want.
     
  4. PL1957

    PL1957 Senior Member

    16
    Jul 19, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Illinois
    Yeah but, just because the BUYER does things one way, doesn't mean that that's the way the market as a whole does it.

    If you haven't seen it already, take a look at the AI's book on appraising c-stores.
     
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