Retail Appraisal Services
From free-standing properties and convenience stores to restaurants and auto dealerships, the retail segment comprises approximately 25% of all real estate. In valuing properties within the retail vertical, appraisers consider location, traffic counts, and ultimately how properties are being used by and how their attributes may impact the customer experience.
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Strip Center and Mall Valuation
Most strip centers are between 5,000 and 25,000 square feet and occupied by a small number of tenants without the presence of a large anchor tenant. Larger malls and outlets are often between 400,000 and 1,500,000 square feet, often with a mix of indoor and outdoor space anchored by large tenants and surrounded by a mix of restaurants and other attractions. Among the most important features for such properties is proximity to highly-trafficked areas, parking, and condition of the property.
As consumers turn to online shopping and retailers face lower customer traffic, mall valuations have fluctuated widely leading to reassessments, closures, and general volatility in the space.
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Community and Neighborhood Centers
Community centers are typically recognizable by having large anchor tenants surrounded by smaller retailers in suburban locations. These large tenants may include Walmart or Target and generally are within 10-15 of residential communities. Neighborhood centers, similarly, are focused on serving everyday needs of residences in close proximity to the property. Unlike community centers, neighborhood centers are often defined by having a grocery-anchored shopping center. The most common grocery tenants are Kroger, Farm Fresh, Food Lion, Harris Teeter, Publix, Wegman’s, and others.
Most neighborhood centers are between 50,000 and 100,000 square feet compared to the larger footprint of community centers in the range of 100,000 to 250,000 square feet of retail space.
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Big Box Retail Appraisal
Freestanding big box retailers most commonly occupy about 50,000 square feet of retail space or more. Rather than serving as an anchor, these stores are typically not immediately connected to other smaller retailers like a neighborhood or community center. Examples of large retail tenants include: Walmart, Target, Costco, BJ’s, Lowe’s Home Depot, Best Buy, Dick’s Sporting Goods, Staples, Office Max, Office Depot, IKEA, and more.
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Restaurant and C-Store Appraisals
Restaurants and convenience stores make up a significant portion of retail real estate. In the restaurant space, major categories include fast food / quick service with drive-thrus, casual dining with full service, fast casual with limited table service, and fine dining. Typically restaurant operators are seeking desirable locations with either favorable traffic counts or welcoming environments that attract customers. In the largest category, fast food, chain restaurants such as Chick-fil-a, Starbucks, Taco Bell, and Subway, provide some of the best examples of standard restaurant properties between 1,000 and 4,000 square feet.
Convenience stores often make most of their profits from selling select food items and goods in small format stores that are connected to gas stations. In recent years, convenience stores have expanded their foot print to include additional services such as more food prepared food items or limited groceries for customers. Example c-store retailers include 7-Eleven, WaWa, and Sheetz.
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Owner-User Retail Appraisals
In many scenarios, business owners occupy real estate that they own. These “owner-user” properties often reduce or eliminate monthly rent expenses for business. While this can be a benefit for operators, it can make valuing a property more difficult when it is time to sell or finance.
Rather than having an in-place market rent, owner-users frequently charge no rent at all or put in place a below-market or above-market rent that is not in-line with comparable properties. With McCoy Valuation’s proprietary real estate database and network of real estate experts, determining an appropriate market rent by understanding lease terms for similar properties makes valuing the property an easier task.
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Major Retail Appraisal Assignments
The Lynnhaven Mall is a shopping center located in Virginia Beach.
2901 Godwin Boulevard is a free-standing retail property currently leased to Goodwill Industries.
Liberty Plaza is a multi-tenant retail property anchored by Dollar Tree, located in Cheseapeake.
McCoy Valuation
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