Auto Dealership Appraisal in Today's Market

[AFvann]

I have been requested to appraise an on going autodealership in North Georgia. In years past I have appraise several dealerships, but in today's market I was wondering what my peers would consider due to the lack of current sales. I don't feel that this dealership will be closing but no one ever knows anymore. Is there much of a market for auto dealership facilitY? Or is there going to be a flood of similar vacant facilities soon?

 

[Joker]

With NO research to support my opinion:

I suspect that there will be several dealerships for sale soon. From what I've read, zoning in some areas will allow a property to sell used cars only if the property also sells new cars. These lots will either be converted to an alternative use or be selling k..k...k..Korean kars in order to comply with the zoning.

The demand for auto's may have decreased but it has not been eliminated. Dealerships will continue to exist. The big 3, imports, and used cars will still need outlets.

Depending upon the age and design, car lots are often easily suited for alternative uses.

Just random rambling thoughts....

 

[CBBoston]

We did a former auto dealership in metro Boston a few months ago. While I expected there to be none, I was pleasantly surprised to find some. I did find any new dealership sales except for a couple sale/leasebacks by a nation auto sales firm. What I did find was several sales of dead dealerships to used auto dealers. Evidently the market for used cars has boomed. These dealers can now pick up much better locations than before. The other types of sales I found were for alternative uses. Given the state of the retail business that surprised me but there a some out there with deep pockets that are land banking. Also sales to users that were more land plays that anything else. Going forward it will probably get much harder to find decent sales give the volume of properties hitting the market at one time. Good luck

 

[Vernon Martin]

I've appraised two in the last year. I found sales of new car dealership properties to used car retailers and tire and auto parts retailers. The prices paid were below what new car dealers used to pay, because these facilities tend to have functional superadequacies.

Used car retailers don't usually need the same amount of office, showroom and service space, but need lots of site area, while auto parts retailers like the service facilities but have less need to the large site areas and office space. If there are parcels that can be sold off, there is extra value there.

That being said, the market is about to become oversaturated with closed dealership properties and will probably make the 2008 sales data obsolete. I wouldn't be surprised if lenders started looking at these things under alternative light industrial use scenarios or even as vacant land.

 

[AFvann]

That what I thought, Thanks!!!!

 

[becktodd1111]

Any adjustment for economic obsolescence? Percent adjustment and data to support such an adjustment?

 

[John Glass]

Any adjustment for economic obsolescence? Percent adjustment and data to support such an adjustment?

16 million new cars sold in 2007 down to 10 million; -37.5% might be a good place to start.

 

[Walter Kirk]

I have seen new car dealerships reused as used car dealerships, auto repair facilities,car rental locations, a limo business, a resturant supply store, a manufacturing facility and as a church. You will have to consider possible re-uses in your highest and best analysis.