Appraising Gas/Convinence Stores - Real Estate Value Only

[PS111222333444]

I’ve been asked to appraise a gas station with convenience store and drive through wash. The landlord is not related to the tenant and has asked for the value of the real estate only. I’ve tended to steered clear of this property type (although I’ve taken courses) due to the complex analysis of the gas/convenience going concern. Should I still be wary even if the scope is for real property valuation only? Thanks for your comments.

 

[tsiegel]

I think you have to do the Going-Concern to get to the real estate unless you have sales of non-operating gas stations. Even then, it is a Going-Concern decision on the part of the buyer.

 

[Pittsburgh Pete]

Could be a good learning experience. I understand your trepidation but I think you should go for it.

 

[tsiegel]

Could be a good learning experience. I understand your trepidation but I think you should go for it.

I agree! The book is handy and if you have taken courses you should be able to make sense of it. Go for it!

 

[Michael P Jacobs MAI]

Looking at the going concern is like looking at historical operating expenses on apartments - it is often a strong indicator of site productivity. Here, I see credible C-store appraisals in our region from one-appraiser operations through the nationals even when the data is available - very common. Our end-user sale market has been fairly active, and many stations are older and obsolete so land makes up the bulk of the real estate market value even though they have national branding. So, yes, you can provide a credible appraisal report in most cases without looking at the going concern.

 

[Terrel L. Shields]

I've done a few over the years, and I really won't anymore. They are too much trouble and bankers hate paying a decent fee. Same with resthomes, assisted-living, etc. They are fairly straight-forward but time consuming to run down comps, and get income info. Just not worth the fee most clients are willing to pay.

 

[Kathleen Hayes]

I would direct you to Atlantic Valuation, Meredith, NH....Ken Currier (603) 279-9001
Expert that I'm sure wouldn't mind a phone call or e-mail. Good Luck! Gas Station/Convenience Store expert.

 

[NachoPerito]

If there is an arm's length lease with the property then it should lead you to the value as real estate only if you can find applicable cap rates. It will be a lot easier than an owner/user operation where the obvious value indication is the GRM (Gross Revenue Multiplier), which includes the going concern.

 

[PS111222333444]

Thanks all for the replies! It actually turns out to be an owner/operator with little income/expense info available.