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Old 03-22-2004, 04:21 PM
Tom Curran Tom Curran is offline
Join Date: Oct 2002
Location: Springfield, MO

Posts: 56

I was recently hired to an appraisal on a convenience store in the middle of nowhere. I disclosed the fact that I had never done a C-Store to my client, but told him I would complete due diligence to learn how to do this type of report.

I then pulled comparables to make sure that there would be enough sales in the area to even complete the report. I found six comparables on comparable rural highway intersections as the subject. So I accepted the report. I then promptly ordered the Book "Covenience Stores and Retail Fuel Properties: Essential Appraisal Issues" .

After reading the entire book, I learned that basically the appraiser is not only valuing the real estate, but also the business. That means getting profit and loss info, gallons per year, in store sales info, and other operating exepnses for the comparable sales.

Ok, since this is common in the industry, the Realtors who brokered the sales should have this information right?

Well...3 of 6 were foreclosures, and two of the remaining sales were vacant at the time of the sale, and of course the Realtors had no previous opertaions data for the properties. The remaining property's Realtor is out of town on vacation for two weeks, way past when this report is due.

So my question you have to appraise the property based on this data, instead of the physical attributes of the real estate? If so, can anyone suggest a solution to this dilema. This is a real good client, and he needs the report on Thursday. I've already done on the general market data research and completed the cost approach. I was intending to dvelope the income approach based on the income data from the comparable sales.

Any help, as usual, is appreciated.
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Old 03-22-2004, 05:46 PM
Travis McGee Travis McGee is offline
Join Date: Sep 2004
Location: Slip F-18, Bahia Mar, near Fort Lauderdamndale

Posts: 1,152

I hate to bring you bad news, but ...

If three of your sales were foreclosures and two were vacant at the time of sale, I'd question whether they share the same highest and best use as your subject (assuming that it's a functioning c-store). Most likely they were purchased for an alternate retail use.

If they were purchased with the intention of using the existing improvements, an argument can be made that these sales are indicative of a "real estate only" value, as opposed to a "total assets of the business".

If they were purchased for redevelopment with alternate improvements, they are land sales.
Old 03-22-2004, 06:30 PM
Tom Curran Tom Curran is offline
Join Date: Oct 2002
Location: Springfield, MO

Posts: 56

All the sales have re-opened as C-Stores, and are currently operating. 2 of the 3 were pending foreclosures, due to the owners having health problems and letting them go. Not because the market does not support these services. I'm not sure what happened with the third foreclosure.

I just got off the phone with a Realtor on another one that I found, and she told me that the sellers and buyer both told her that the income information should not be given out to anyone, and that she was required to "tear it up" after the closing.
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