Currently, GPMs tend to average 4.12, near pre-recession figures. Between 20, GPMs averaged 4.04, before declining to an average of 3.76 during 2008 – 2012.
Interestingly, the GPM indications tend to reflect market trends better than capitalization rates. Sales surveyed during the 2002 – 2007 time period show a similar trend. The sales surveyed between 20, corresponding to market conditions during the great recession, show a similar trend, with GPM indicators having a coefficient of variation of 0.30 versus 0.40 for the capitalization rate indications. By segmenting the sales data contained in our database into time periods reflecting stronger or weaker markets, the GPM remains a more consistent measurement. The trend is reflected when examining past time periods, as well. By eliminating the operating expense component from the data, the indicator becomes more consistent. The surveyed GPMs, though, exhibit a much narrower range and a lower coefficient of variation, with the GPM indicators having a coefficient of variation of 0.28, versus a wider coefficient of variation of 0.39 for the capitalization rate indicators. Most recently, the 66 identified sales taking place after 2013 show a wide variety in value metrics, with a range of 2.38 to 7.82 times gross profit and capitalization rates of 3.88% to 23.16%. Approximately 177 sales were identified throughout California that have taken place since the beginning of 2002. To illustrate this effect, we surveyed our database of California-located going-concern sales of gas stations. NOI, of course, is a function of the reported operating expenses, meaning that said operating expenses will tend to influence capitalization rates dramatically. Some owners will consider every possible minor or tertiary expenditure as an operating expense, while others may want to show a more minimal expense burden for various reasons. Since the majority of these property-types are still run by small businessmen and women, operating expenses can vary dramatically from property to property. The single-store operator is still a driving force in the industry. In contrast, larger chains (100 stores and above) comprise only 23.25% of the market, accounting for 35,855 stores throughout the United States. Of these, 97,359 (63.14%) are operated by single-store operators, with a further 1,262 (0.82%) being operated by chains with 2-3 stores. In its 2015 State of the Industry Report, the National Association of Convenience Stores (NACS), an industry trade group, reported that there were approximately 154,195 c-stores/gas stations in the United States. Moreover, we aim to examine the broader trends driving valuation multiples in the California market.ĭespite massive consolidation within the industry over the last couple years, as large regional/national operators and private equity funds move into the market, the majority of America’s gas stations/car washes tend to be occupied and run by small businessmen and women. The aim of this paper is to discuss why that is and what implications this has for appraisals and value multiples. For the most part, the GPM-derived value indication will tend to be a more reliable and consistent indicator of value. The former measures value by relating the sale price or value estimate to the gross profit generated by the property (or Sales Price divided by Gross Profit), while the latter relates value to the Net Operating Income (NOI) generated (or NOI divided by Sales Price).
Within the valuation of a special-use going-concern, there are generally two primary relevant metrics to examine: the Gross Profit Multiplier (GPM) and the Capitalization Rate.
0 kommentar(er)
