A special purpose property is a facility that is not easily converted to other uses, and where the business operation is integrally tied to the real property value and to the physical location. We need to consider the entire going concern.
What do we mean by Going Concern? That is a term that refers to the total assets of the business, including the tangible real property, the tangible personal property (usually furniture, fixtures and equipment or FF&E) and the intangible personal property (known as business enterprise value, BEV, which includes goodwill, value of the trained workforce, and other components that are not easily isolated).
It is possible to convert a gas station to a flower shop, but it requires considerable time and effort and it will usually look like a converted gas station. That’s different from a simple retail building that could be occupied by a donut shop today, and an insurance office or dry cleaning operation next month. The latter is a general purpose property, easily converted to various uses.
For the special purpose properties, we analyze the going concern as an operation, and then allocate value to the various primary components. Through coursework and many years of experience, we have developed extensive expertise in this complex specialty. Speaking of specialties, although we have appraised restaurants and other going concerns, we have developed particular specialties in these three property types:
Herron Companies began appraising petroleum properties nearly 30 years ago in southern California. Over the years, Herron Companies has completed thousands of appraisals on groups of properties across the country for major oil companies; that’s in addition to hundreds of individuals assignments for lenders, oil companies and lawyers for use in litigation work.
Herron Companies performed its first car wash appraisals in 1986. Since then we have appraised hundreds of washes. Today, Herron companies is recognized as one of the nation’s premier appraisal companies specializing in the car wash industry. We are aware of no other appraisal company that has valued as many car washes as Herron Companies. Don’t become another appraiser’s guinea pig for learning
For most of our 30+ years, Herron Companies has been performing appraisals and feasibility studies on hospitality properties across the country. At almost any moment, we have appraisals of hospitality properties currently underway. With a team of over a dozen appraisers on staff, we can afford to dedicate several of our experienced appraisers almost exclusively to the valuation of these unique properties. Consider the following.