Authored by Robert E. Bainbridge.
Published by the Appraisal
Chicago, IL. 2012.
316 Pages. Illustrated.
The most authoritative
on the appraisal of
and gas stations.
E. Hummel, SRA
2003 President of the
|A 5-Star Rating on Amazon.com
5-Star Rating on AMAZON.COM
“Great book, informative!”
“I have this book
and use it often when appraising C-Stores. Well written, informative and provides a lot of useful information…”
NEW FOR 2012! The Second Edition of Convenience Stores and Retail Fuel
Properties: Essential Appraisal Issues includes updated operating metrics from the most recent State of the Industry
reports published by NACS: The Association of Convenience and Fuel Retailing. New chapters explain
the fundamentals of economic theory as applied to convenience retail real estate, eminent domain issues, and highest and best
use decisions for convenience store sites.
The new edition also includes one of the appraisal industry’s first prototypes of a commercial property AVM
(Automated Valuation Model). The AVM design is drawn from the valuation principals covered in the
the latest digital technology, links are provided to helpful on-line resources, including video instruction, interviews with
experts, practical field examples, and worksheets that illustrate and augment the concepts discussed in the text.
FROM THE APPRAISAL INSTITUTE:
The convenience industry
is a complex and fascinating retail channel that has responded to the economic challenges of the last decade by embracing
new ideas. The second edition of Convenience Stores and Retail Fuel Properties: Essential Appraisal
will help appraisers of convenience stores keep up with these changes and understand how to value convenience properties.
This new edition demonstrates market analysis
using statistical data and information on important recent developments in the convenience industry, such as:
Newly added chapters discuss the
fundamentals of economic theory as applied to convenience retail real estate eminent domain issues highest
and best use essentials for convenience store sites
As an added bonus, the book presents a prototype of a working commercial property automated valuation
model. Links to helpful online digital content, including interviews with experts and practical field examples, are also provided
to illustrate the concepts discussed.
The old rules
for appraising convenience stores simply do not apply today. Order this text and learn the new market realities.
From the Introduction to
Convenience Stores and Retail Fuel Properties: Essential Appraisal
store occupies a unique place in the retail landscape. With over 146,000 convenience stores across the
USA, more than 117,000 sell motor fuel. Eighty percent of all motor fuel sold in the United States is sold
through the convenience retail channel. This business model of motor fuel sales combined with a limited
selection of high-turnover merchandise is the subject of this book. Convenience stores are special-built
properties that are designed to make money in only one way. They are not easily adapted to other uses.
The fundamental determinant of value for a convenience store property is its ability to generate earnings.
This book is written to
help the reader understand the market forces and design features that create and influence the property value of convenience
stores. Chapters 1 through 9 are essential preliminary background to understanding the factors that create
value. Chapter 10 applies this knowledge through the three approaches to valuation. Simply
stated, the value of a convenience store is a product of the characteristics of the trade area within which the store operates
in addition to the physical features of the site and improvements.
Chapter 1 discusses the convenience industry. Current
trends in motor fuel retailing and in-store sales are presented along with sources of data that the appraiser should be familiar.
The long-term trends in the industry establish the 5 to 10-year price-movement for the real estate. So,
it is important for the appraiser to know where the convenience industry is today and where it is going.
Fundamentals of economic theory applied to retail
real estate are presented in Chapter 2. Understanding the interaction of supply and demand in perfectly
competitive markets is presented for a basis of discussion on how economic profit is created for the business
All convenience stores operate within a specific trade area. Whether that trade area is over-supplied
or under-supplied has a profound influence on value. The supply and demand characteristics of the trade
area determine the short-term movement of property value over the next two to five years. A trade area
analysis is one of the weakest area in most appraisal reports. Chapter 3 shows the appraiser how to delineate
the trade area, measure supply and demand, and discusses important sources of data and analytical tools.
Chapter 4 helps the appraiser to analyze the site. Today’s standards for convenience store
sites are discussed, including examples of site development criteria from major retailers and oil companies. Related
to site access and visibility, the specialized topic of eminent domain issues as they relate to convenience retail properties
are explored in Chapter 5. Examples of the economic impact of access degradation for convenience retail real estate
are included in Chapter 5.
Store building assessment is addressed in Chapter 6, and the Fuel Service and Equipment are treated as separate topics
in Chapter 7 and Chapter 8. Industry average cost trends over the last ten years are provided in each of
Highest and Best Use considerations for convenience stores are covered in Chapter 9. Acquisition
and redevelopment decisions are presented as well as the effects of increasing land values on the highest and best use of
a convenience store are presented.
Chapter 10 addresses the valuation of convenience stores. All three approaches are discussed.
However, in accordance with Guidance Note 12 of the International Valuation Standards the most emphasis
is placed on the capitalized earnings approach as it applies to the total assets of the business. Because
it is a component part of these assets, the value of the real estate dependent on earnings capacity. This is the fundamental
premise of the value of a convenience store.
Looking ahead, Automated Valuation Models (AVMs) for commercial property are one of the
most promising developments in the appraisal profession today. AVMs will play an increasingly important
role in the future of commercial property valuation as more abundant and better quality market data becomes widely available.
Chapter 11 presents a prototype AVM for convenience stores based on the valuaion premises discussed in this book. Comments
on model design and measures of explanatory and predictive capability are included in Chapter 11, along with a discussion
of some of problems commonly encountered and suggestions for further research.
In Appendix A, the reader will find releveant material on the North American Industry Classification System (NAICS)
codes for retail real estate, which are useful for accessing demographic data sources such as Site To Do Business. Other
appendices cover the International Valuation Standards, the International Financial Reporting Standards, FIRREA,
For a practical application of the valuation principles
discussed in Chapters 1 through 10, the Appraisal Institute offers an online seminar, "Appraising Convenience Stores",
which includes a case study covering the topics presented in this book. The seven-hour seminar is available
through the Appraisal Institute at www.appraisalinstitute.org.