A Look Through the Windshield at Auto Dealership Valuation
Bradley R. Carter, MAI, CRE, CCIM, CDEI
Typical Auto Dealership Transaction
Total Price: $10,000,000Personal Property: $200,000Intangibles: $1,800,000Real Estate “Price”: $8,000,000
Re-Imaging
• Required by the OEM• Standardization, Modernization, Expansion
o Best Investment = Expansion*o Best Investment = Standardization
Real Estate’s Worst Investment?
Photo courtesy of Alden Jewell, from his collection at www.flickr.com/autohistorian
Re-Imaging Case Study
Land Value: $2,100,000Cost: $7,950,000Depreciation (30%): ($2,385,000)Value: $7,665,000 (Prior to considering re-imaging)Cost of Re-imaging: $6,500,000Value: ???
– Prior to considering re-imaging
“Never try to teach a pig to sing. It wastes your time and it annoys
the pig.”
George Bernard Shaw
Photo courtesy of Alden Jewell, from his collection at www.flickr.com/autohistorian
Which is Worth More?A) A place where people go to pick out a car?
Or
B) A place where people go to pick up a car?
Source: Kerrigan Advisors, citing NADA
“The idea that maybe you don’t have to own a car if you only need one occasionally may catch on, just like time-sharing caught on in real estate.”
Steve Case, AOL
“Prediction is very difficult, especially about the future.”
Niles Bohr, Danish physicist
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