Convenience Store Appraising: Unpacking a Niche Market

convenience store lit up at night

What constitutes convenience store appraising?

Valuation Review caught up with North by Northwest, Consulting’s President, Anthony Alderman. He discussed what goes into convenience store appraising and how it is different from the typical residential and commercial assignment. What specific information do appraisers need with these store properties?

Convenience store appraisals present interesting challenges. Most of these are nonexistent when it comes to regular commercial work or residential assignments.

“The difference between convenience stores and other properties is that the convenience store is bought and sold as going concern properties. Buyers want to know what kind of business the property draws from, how the business is doing, how the business drives the fuel sales, what the profit margins are showing, what do the convenience store competitors look like, how are they doing, will there be new competitors, etc.”

Anthony Alderman, CEO of North by Northwest Consulting, Inc.

Alderman pointed out that convenience stores need different types of information and analysis, as opposed to something residential, an industrial building or a strip mall center. And if the appraiser doesn’t realize that or takes all those factors already mentioned into consideration, “they can be in a bad spot,” he said.

Trying to appraise convenience stores on a price per square foot basis can really misguide the appraiser, while realistically getting the numbers right is by pure accident, according to Alderman. The examining of PNL statements associated with the volume of fuel presents all kinds of challenges when appraising convenience stores compared with what the typical commercial appraisal assignment offers. The market and just overall shopper traffic weighs heavily in the appraising of convenience stores. Alderman noted that both have taken hits as a result of the COVID-19 pandemic.

How Covid-19 has impacted the market

“It does create some issues right now,” Alderman said.

“In short, how I’ve handled [the pandemic’s impact on c-stores] is recognizing that convenience stores, as far as retail, are considered essential businesses and they stay open, which is good. But traffic is way down and fuel sales drive that traffic. The question is figuring out how the market is affected by these properties.

I’m calling brokers active in my markets asking what they’re doing, what the buyers are doing, the investors, and all of them are indicating things will bounce back, and reminding us that this shutdown is only temporary. Knowing this, I’m still being conservative right now, which is what most appraisers tend to do. The continued operating of the convenience stores is a great thing but I’m coming off of that a bit. I won’t be aggressive now but I don’t have the evidence that the market is turned down. This virus has had an impact on the holding periods in that they are longer so you have to market longer.”

Anthony Alderman, CEO of North by Northwest Consulting, Inc.

It’s fair to say that some c-stores have been adapting to the new reality of the pandemic. There are other factors apart from fuel that are important considerations. Alderman elaborated on this, “One caveat I would make is obviously location and the product mix of each store. These play a large role in the impact of the pandemic on the bottom line. Stores with more grocery items are doing better. Also, the higher volume stores are less impacted as they have some room to absorb a temporary decline in sales.”

The Economist, in a recent article, has written about the potential for some convenience stores to benefit from the time. But only if they are able to adapt to the unique circumstances. There has been a general apprehensiveness, as to appraising during the pandemic. Alderman explained that even property owners are feeling apprehensive. Some business owners may not want appraisers near the properties, at all.

Two appraisers wearing face coverings on a remote assignment

The company executive said he has a combination of older and younger people appraising. Alderman too, admits he’s healthy, and doing a lot more inspections. He notes that work may be down but he is working harder. He has found the need, regarding more adaptations to the current situation, to limit inspections to the healthy or the “less at risk” people of the company. The exception being unless it is vacant land.

“Banks seem to be okay with exteriors (appraisals) as long as there are pictures with extraordinary assumptions applied,” he said. “It’s cumbersome, but we’re glad we can still do our jobs.” Alderman also pointed out that everybody working in his firm was working virtually. Because of that new reality, he has invested in the software that allows more and newer ways to utilize technology.

Like everybody else, he said, everyone has had to “kick it up a few notches” on working remotely. There are new considerations, the company wouldn’t necessarily have had to deal with pre-COVID. “I had one client reach out about doing evaluations, which appraisers in North Carolina do as restricted reports.” Alderman said. “I might have ignored those before because of being too busy with the regional DOTs. Now, I have eight of those on my desk.” While other owners have shared their desire to reach out to the competition for help during these difficult times.

“I’ve always been somebody who is a peer-to-peer in the commercial appraisal world by way of reaching out [with competition] to share data. I’m interested in other people’s COVID plans as far as how they will handle a certain situation. We tried to get ‘in front of the game’ on this one.”

Anthony Alderman, CEO of North by Northwest, Inc.


“Technology will certainly speed up, I agree with that,” he added. “I bought my office building on Oct. 28 and filled it up. I was looking to expand that office but with people working from home now, I’m rethinking the expansion idea. I may amend that expansion idea or scrap it all together. Looking long term, the office market could get hammered in a dramatic way. Retail properties, as well, but the market is more tied to COVID and whether or not people will be out and about. I think moving forward, it’s possible we will be seeing fewer people working in office buildings, generally. That will certainly affect our industry.”

North by Northwest Consulting, Inc. is a North Carolina-based firm consisting of certified appraisers from around the state. They meet their commercial valuation requirements by catering to the convenience store and going concern properties. They are licensed in Tennessee, North Carolina, South Carolina, and Virginia.

A man on a commercial appraisal assignment at a convenience store.

“We also do large amounts of right of way, eminent domain work,” Alderman told Valuation Review. “For the North Carolina DOT (Department of Transportation), we’ll do 100-to-200 parcels, larger projects different from what other firms do. It’s not just the type of work but the volume.” And sometimes, convenience store appraising and eminent domain can intersect. Anthony Alderman alongside Zachary Northcott, CMEA have published an article, detailing the unique challenges that arise when these markets overlap. North by Northwest certainly has a niche market expertise. As far as convenience stores go. And how they navigate the covid pandemic significantly impacts their business strategy. One thing is for certain, Anthony Alderman’s business strategy, his ability to ask for help and his willingness to collaborate with the competition or reshape or scrap ideas demonstrates the incredible adaptability of a company that continues to prove its excellence in the field.