Real Property Appraiser
Real property valuations, which look at buildings and land, are essential for acquisitions and dispositions, lending, and insurance, as well as estate and property taxes. Leaseholds, common in the quick-service industry, can also be valued.
Like business value appraisers, real property appraisers use a variety of methods, based on the purpose of the appraisal, says Raymond B. Mattison, ASA, a commercial appraiser based in Santa Rosa, California.
The different methods include market value, or the price at which the real estate would trade. Value-in-use determines the value the assets generate for a specific owner and is usually less than market value. Meanwhile, investment value is value to a specific investor and typically tracks above market value.
“Restaurants are among the highest-risk businesses in the world,” Mattison says. “Any time a loan is involved, you’re going to need an appraisal.”
He adds that restaurants are also among the most challenging properties to value because unlike many other commercial sites, they have very customized interiors and strict compliance codes.
“We do the site inspections, so we need to be aware of the issues,” Mattison says. “We need to know everything about the property, fires in the kitchen, tenant improvements that they have done with permits and without. Don’t hide anything from us.”
Mattison expects to review everything from the current lease to building plans and specifications, recent property tax bills, and other documents pertaining to the property.
Anticipate about a four- to six-week turnaround for a real property appraisal, Mattison says, with costs ranging from $3,500 to $6,000, depending on the complexity of the site.
Machinery & Equipment Appraiser
Appraisers specializing in machinery and equipment (M&E) are adept at valuing all types of industrial properties. They perform market and liquidation value appraisals for purposes ranging from sales and acquisitions to insurance and a host of other needs.
Like their colleagues in other appraisal disciplines, they use a variety of valuation methods, depending on the purpose of the appraisal.
“The auction value is completely different than someone would want if they were selling the business,” says Carl Miceli, ASA, with Westminster, Maryland-based American Auctions and Appraisals. He notes there are 11 values that can be put on machinery, ranging from installed value to scrap.
When an M&E appraiser values the tangibles of a restaurant, he goes over everything from the tables and chairs to fixtures, displays, and ovens. What appraisers don’t put a value on is inventory or foodstuffs, Miceli says, because it has a shelf live.
An M&E appraiser will spend anywhere from two to four hours at a location, delivering a report within five to 10 days. Typical fees range from $1,500 to $3,000.