Auto Lube Facilities-Methodology

[Stan Carman]

Yes it is and IM trying to get you to think why that may be.

I have been thinking about that for quite some time now. That is why I am on here. My menor and i have both never ran into this situation before. We are being carefull not to assume that the rent on the building is at market due to the sales data that does not correlate. I know what you are thinking "it is business value". That is the case, however, that is also the case with other market transactions.

 

[PropertyEconomics]

I have been thinking about that for quite some time now. That is why I am on here. My menor and i have both never ran into this situation before. We are being carefull not to assume that the rent on the building is at market due to the sales data that does not correlate. I know what you are thinking "it is business value". That is the case, however, that is also the case with other market transactions.

Well first .. you said you didnt have any sales .. so without market transactions you cant really say that for sure.

Second .. thats why I asked you if you were appraising a "value in use".

 

[Stan Carman]

I said there are sales they just do not corrospond to the income cap approach. Thanks for your help.

 

[PropertyEconomics]

Stan .. are there sales of auto lube facilities?

 

[matt hawk]

Stan,
I will try and help you rather than make a point. I've had problems with auto repair facilites also in that the two approaches seem to come up vastly different. I found I was using the wrong unit of comparison. It made much more sense when I used number of service bays rather than square feet. Never hit me until I sold a service garage I owned. I can't tell you what my mentor says about that, he's a myth.

 

[PropertyEconomics]

Stan,
I will try and help you rather than make a point. I've had problems with auto repair facilites also in that the two approaches seem to come up vastly different. I found I was using the wrong unit of comparison. It made much more sense when I used number of service bays rather than square feet. Never hit me until I sold a service garage I owned. I can't tell you what my mentor says about that, he's a myth.

Did your business go wtih the sale matt? I am just curious.

 

[Stan Carman]

To all.

Come to find out the cause of my delima was a SF issue in the end. The service pit (basement) is included in the GBA. One catch is that you must compare apples to apples and the comps must also have a service basement area as well. Thanks to all who responded. I have been able to confirm this with the comps I had and some help from an AI professor.

I guess that was the point PE was getting to.

 

[matt hawk]

Glad you worked it out, Stan. To answer PE's question, the answer is no. Several years ago I went insane and opened a transmission shop with the plan to sell the business eventually and rent the real estate to the business buyer. All went according to plan and the day after the closing of the business, the property went up for sale. Very similar to Stan's property in that it was a franchise business, but the real estate belonged to me. After five years, it sold to an investor. The rents were good, but I was ready to unload the land and all the improvements. To clarify, the buyer of the business took all the lifts, compresser, parts washer and everything included in our business sale transaction, which was everyting not nailed down. The buyer of the real estate was left with a very nice, eight bay service garage.