NEWSLETTER | January 1st, 2021
Convenience Stores Fuel Canopies
Commercial Appraising is a unique industry as often appraisers from different companies as well as independent contractors have to corroborate their knowledge to support the opinions reached in individual appraisal reports. One great example of this is in the survey that North by Northwest conducted on whether or not convenience stores’ fuel canopies should be treated as real estate or fixtures (FF&E). The convenience store canopy is an important part of appraising convenience stores because sometimes they are treated as a trade fixture or personal property and other times they are treated as real property. This is an ongoing debate that North by Northwest decided to help answer through a survey of peers in the industry.
CEO Anthony Alderman surveyed six of his peers. Together they weigh in on their methods and provide a credibility that ultimately benefits them all in their individual valuations. If you’re interested in knowing more about North by Northwest’s appraising of convenience stores please read our related article: Convenience Store Appraising: Unpacking a Niche Market.
Appraising is inherently subjective. We use objective data and tools but from that information, we create our opinions on a property.Anthony Alderman, President of North by Northwest.
Alderman decided to review his findings on whether convenience store fuel canopies should be treated as real estate or fixtures. Overtime, Alderman had noticed many of his peers reaching out to him to confirm their opinion on fuel canopies. The consensus was fuel canopies should be treated as real estate. Eventually, Alderman decided to formally write up this conclusion. He sent the report to his peers for them to sign. This survey of appraisers verified and added weight to North by Northwest’s practice in this area. The survey was then published and circulated. Then, If any entity disputes the findings of these firms using the method, they can view the survey of appraisers.
The Survey of Peers
In the survey, appraisers offer their reasoning and signatures to support Alderman’s treatment of convenience store fuel canopies as real estate.
I have always treated fuel canopies as part of the real estate as they are not readily movable.Chip Cisne, President of Charter Appraisal Group, LLC.
Similarly, Kathy Bunker of the Bunker Land Group argued that when convenience stores are vacated or no longer useful as convenience stores, the fuel canopies only remain since they are permanently attached. While Hector Ingram of Ingram & Company, Inc. suggested that while it is possible to remove fuel canopies from convenience stores, they seldom are removed, similar to fuel tanks, and therefore the canopies should be considered real estate.
Several other appraiser professionals weighed in on what Alderman calls a grey area within appraising convenience stores. But the document serves to provide clarity and the knowledge of expertise to the uncertainty. The survey does not serve to hold other appraisers to this method of appraising. Because, again, appraising is by nature subjective. The survey only indicates that this is a method that is typically used for valuing convenience store fuel canopies. If you are interested in viewing the full survey of appraisers please contact North by Northwest through our contact form.
To be clear, there are instances, such as eminent domain proceedings, where the canopy is treated as FF&E and not real estate.
Professionals We Love: Jason Bloch
We are proud to work alongside professionals like Jason Bloch, Sr. Acquisition and Relocation Agent for TELICS. His expertise and extensive knowledge of Right of Way projects makes him a pleasure to work with. North by Northwest has collaborated with Bloch on a wide-range of appraisal projects including everything from side-walks, pipelines, small privately owned properties, and within large commercial corridors. CEO Anthony Alderman first connected with Bloch eight years ago when NxNW was just starting out as a company, and Bloch’s 10 years experience working in small towns, cities, counties, and NC & SC DOT’s was incredibly helpful and an inspiration for Alderman’s business growth.
Three years ago, the two worked together in voluntary leadership roles for the IRWA, with Bloch serving as Chapter 31 president and Alderman serving as vice president. Under their tenure as the organizational leaders, Bloch sought to expand the community by actively getting more people involved and creating committees and leadership opportunities, while Anthony’s focus was growing the committees and providing value to the membership.
North by Northwest has handled several appraisals for TELICS. Bloch commented on the quality of North by Northwest’s reports and why he likes working with NxNW, saying, “the reports are technically sound, well done and thought-out, and this makes them easier to explain to anyone from homeowners to investors. I think Anthony’s experience as an educator makes him able to translate the technical aspects of his reports well to anyone.”
From Appraiser to Film Producer
It’s no secret that North by Northwest likes to support local artists. We’ve covered feature pieces on our commissioning of Hickory local artist Hunter Speagle and sculptor Tommy Frank. But we’ve yet to share how we’ve “gone Hollywood”.
Last year, Anthony Alderman helped produce “Trap Door through the Edge of the Universe”, a film directed by Noah Warner, another North Carolina native. Alderman and Warner met at college, and have maintained a friendship. After Warner moved to Los Angeles and wrote his script for “Trap Door”, Alderman agreed to help produce it. Thus “Trap Door through the Edge of the Universe” was realized and is now available to watch for free on Amazon Prime.
Warner’s directorial debut is more than just another homage to the film noir genre. The film feels an apt metaphor for the times in which we are living. In our post-truth era, when every fact is up for dispute, the same uncertainty and blurred realities are seen through the lens of Warner’s witty, detective story. Read the full film critique at The Epilogue website.
Featured Artist: Tommy Frank
Sometimes art is so nice we have to name it twice. This is our second shout out to Sculptor Tommy Frank. We commissioned Frank again this year to create the company Xmas presents. Frank made gorgeous tumblers and a tree ornament using a similar technique to last year’s coffee mugs. We liked the coffee mugs so much, we ordered two tumblers this year as well as the ornament.
In an interview with Frank he told North by Northwest that he used a light weight process for the tumblers. While the ornaments are something he doesn’t do often which was interesting and fresh. “I love doing projects like this. It’s fun to collaborate and I like to keep the designs fresh every year.” Frank said. We have to say, at North by Northwest, we love the results. To view more of Frank’s work view his website. Thanks again, Tommy Frank!
How North by Northwest Does the Best Appraisals
At North by Northwest Consulting, we believe we’re the best appraisal firm for producing high quality appraisals at volume. Here we explain our appraisal processes and how our team continues to deliver pristine reports. One of the first reasons for our success is that our team is always learning. Appraising will be engaging forever with the mindset to continue to engage as a learner because every property is different. There is always something to learn and finding that value is exciting. If learning is a value, appraising is the right business.
Thoroughly Answering the Research Question: What is the Value?
We take pride in the high quality of our appraisal reports. They are high quality because they thoroughly answer the research question: what is the value? There is a thoroughness through the extensive research each appraiser takes into the subject property, as well as into the specific neighborhood. We use an incredible amount of comparable data. And we consider the broader area real estate market. We emphasize and don’t shy away from the heavy research component, which requires thorough analysis of that data to be able to utilize it well, so that the value you reach is credible.
Understanding the Subject Property through Data
Its credibility is derived from understanding the subject property. To understand the subject in the market, you need data. We have access to enormous amounts of data through investments. We often invest in MLS’s, as needed. North by Northwest does the same thing when we invest in various commercial databases, as needed. Then our data team thoroughly researches and verifies the comparable. All of this cross-checking and referencing substantially increases the credibility of our reports. We are saying at North by Northwest: your appraisal is only as good as your data.
Quality Control Protocol
The data team and the research team increases our volume, that’s how we scale. We have a quality control process. And a team mentality navigating these large processes. We have created a thorough quality control protocol which involves two steps for every appraisal. Most firms just review the report and then make changes and send it out. The thing we do that’s extra is that we send it to another reviewer who is not an appraiser and does a technical review. They go through appraisal review and TR process and it has paid huge dividends. In this way, we have saved numerous mistakes The aim is to make a good impression.
North by Northwest is more structured than other firms because we build our community based on trust. North by Northwest uses specific and talented people. When the project starts we get it done by having those relationships in place, which is valuable but also takes work. Appraisers feel a part of the team through maintaining strong communication and us investing in that relationship.
In the appraising world you need more than just good communication. Advanced communication is necessary since you’re not just writing reports. There are various entities to liaise with on the phone and through email. Whether those entities are clients, reviewers, co-workers, all of the communication needs to be clear and easily translated to help push the processes to completion efficiently. A high level of communication helps our business prosper.
But it’s more than just good communication, it’s understanding. CEO Anthony Alderman revealed that some appraisal firm’s relationship with the bank reviewer is often adversarial. But when Alderman started North by Northwest he noticed that that adversarial take quickly made him frustrated. And sure enough, as he started reviewing his own appraiser’s reports he began to get empathy for the bank reviewers. “Then I realized I needed to help people communicate. The point is that the reviewers actually have to sign the review and they are certifying that that review is credible. The reviewers are often apologetic because they don’t want to fight. And they’re not going to sign something they’re not comfortable with.” Alderman said in an interview about his business model.
Today, each time a bank reviewer has an issue with a North by Northwest report, the team makes an effort to hear what they’re saying. The goal is to learn from it in order to avoid making that same mistake the next time. This simplifies the process but it also makes that working relationship better and that makes everyone’s life easier.
Adaptation & Growth
Another valuable lesson for interacting with clients or internally is to accept that there is good and bad in almost everything. “The wheat and the weeds grow together” – Jesus. For example, It costs North by Northwest money and time to triple check the appraisals. But if you consider that it’s our reputation on the line, not just with banks but in the right of way there is a litigation process that can ultimately be subpoenaed, then it’s clear that there is value in making as few mistakes as possible.
In order to help the team understand the processes and intricacies of the appraisal world as fully as possible it’s helpful to have an agile workforce in place. The North by Northwest team is largely cross-trained to do other things. Many of the team have secondary roles doing other things at the company. If they are a research report writer, they can also look at comps and vice versa. Adding redundancies is ultimately needed because people get sick, people move on, or there is the need to fill in for others when they’re on leave. We’ve also trained right of way appraisers to do bank work.
The North by Northwest team enjoys the adaptation and are always pushing towards growth. It’s important to work alongside people who can find ways to motivate themselves. And often that attitude is good for the whole team, as it inspires us to all be better for each other.