Basement of Lube building

[GregoryK]

Yeah it is simply a feature and is not included in the GBA. I have even had a few that had storage area in basement under office. As long as you are specific in what you do, I don't think it matters much. Just stay consistent in your comparisons.

 

[Howard Klahr]

I was always taught that GBA is the footprint...regardless the number of stories ]

That would lead to very interesting building sizes in urban markets (NYC, Chicago, LA, etc.)

However, BOMA/Ansi standards are applicable and you can buy the book (of course it isn't cheap)...

BOMA standards are for office buildings not retail.

As has already been stated in this thread, the answer to the OP's question is that really doesn't matter if the space is included in the gross building area total or not as long as the comparison is the same as the method used to report the information for the comparables. Either way, included or not, the description of the property would include a reference to the pit area size. It is not much different in concept than how mezzanine space in an industrial building is handled.

what is going to be interesting is that the OP has indicated that the Sales Comparison approach is not being relied on yet most of the properties of this type (cstore/gas station, car wash and quick lube - all used combined on one site) are not frequently leased. Those that are would more commonly represent a land lease that would likely not reflect the improvements. Otherwise the OP is analyzing the going concern as opposed to just the real estate component.

 

[Terrel L. Shields]

Otherwise the OP is analyzing the going concern as opposed to just the real estate component.

Possibly...or they could be using the cost approach. Here all the one's I know that sold were sold as distressed properties by a bank.

GBA is not Gross Floor Area or the Gross rentable area. Again, that was the way I was taught and GBA was never used as a unit of comparison except in some old downtown buildings where the mezzinine was basically overhead storage and otherwise meaningless; and, the basement was a place nothing went outside maybe the heat and air..on blocks well above the damps and dews.

 

[CANative]

Even in the case of the subject property with this new information the pit is just a substitute for a lube rack. Describe it but don't include the space as rentable area or in a $/SF comparison.

 

[Howard Klahr]

$/SF is not often an appropriate comparison for these property types. The comps will either be gas stations, quick lubes or a combination of both. Consequently, it is somewhat irrelevant.

 

[Rlong]

Well I see this different.... feel free to add the PIT floor area... but then don't include the "non-floor" area for the "hole" in the floor where the pit is. i.e. The footprint = GBA.

Footprint = 3,000sf LESS the (80sf x 3) holes in the floor = 2,760sf PLUS the floor area of pit = 3,000 sf and disclose??

I concur this is primarily for summary of facts as your analysis will be /bays..

Bob in CO

 

[Terrel L. Shields]

I guess the question is if everyone pays for them either as new construction or based upon their anticipated income, how do you appraise one with the sales comparison approach and not use some metric related to the potential to generate income (i.e.- cap rate, number of bays, etc.)? To me if operating, it is going to sell as a business and never as bricks and mortar. So first you determine if the site value as if vacant is less than the income indicator as operating. I don't see how you segregate the value of the business from the value of the building since, as I pointed out, either you sell the business or you sell a distressed site. Same problem as a hotel.

 

[CANative]

$/SF is not often an appropriate comparison for these property types. The comps will either be gas stations, quick lubes or a combination of both. Consequently, it is somewhat irrelevant.

I'm just saying that lube pits serve the same function as lube racks/lifts so for purposes of comparison they are equal and no adjustment to the comparables is needed for this feature (IMO.) The pit area should not be included in the rentable area in the income approach either.

 

[Meandering]

Yeah, so the property is a cstore/fuel, with full service car wash and free standing lube building.

You can repair cars in a building used for oil changes. It's a gas station/C store with a car wash. We have these. There are several comparison methods for each type of service that generates income. If you can separate the income streams, I would break it down by the number of fuel pumps available to customers simultaneously, the number of lube bays, the number of wash bays and the square footage of the retail space. Once you know where your greatest income generation is, the per unit will be the basis of comparison with comparable sales, while the other available income streams were serve to decide the adjustments that are warranted.


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[fairoaks]

I just appraised two separate "quick lube" facilities.

it was my first time appraising small quick lube/oil change facilities. They are in a league of their own due to their retail locations, semi-industrial/retail buildouts, etc. Initially, i did not include the "pit" areas into the values and the values came out abnormally low and the bank said try again (and again). After much debate and discussion I came to the conclusion that the pits are essential to the overall value of the property. And while they do not fit the description of a basement they are vital to the value of the property as a whole (and expensive to build). Therefore, the pit is a definite value.

If the owner/tenant were to vacate the property, and the property were exposed to the open market....who would be the most probable buyer of the property?? if it would be for continued use as a retail auto application then I would include the size of the pit in the overall value of the property. Having said that. Pits are dangerous. Cars fall into them. People fall into them (having grown up as a kid changing oil on the weekends at my fathers business i have slipped into the pit on a few occasions and it BLINKING hurts) Insurance companies don't like them....AND they generally have stopped building pits in auto-retail due their danger and expense (lifts are cheaper)