Specializing in Special Purpose Property Valuations

Restaurant Appraisals

We have appraised hundreds of bars and restaurants. Completed detailed studies related to valuation and developed an extensive proprietary database. This experience allows us to respond not only accurately and reliably to client valuation needs, but also quickly and efficiently.

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Special Purpose Property Valuations

“The biggest problem for real estate appraisers attempting to value a going concern is their lack of understanding that they are appraising a business, which is inexorably connected to the real estate.”
- L. Deane Wilson, MA, ASA, author of “Going Concern Valuation” and noted expert in real property going concern valuation.
We have experience appraising a wide variety of special purpose property types, coupled with multi-disciplined valuation expertise in real estate, business and equipment appraisal.

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SBA Appraisals

“Qualified Source” for business valuations and equipment appraisals, as well as real estate appraisals. We not only save time and money but provide more reliable valuations than ordering separate appraisals for each value component.

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RMS Commercial Group...
Multi-Disciplined Expertise.

Bringing Clarity to Special Purpose Property Appraisals.

Real Estate
Appraisals

Business
Valuations

Machinery & Equipment
Appraisals

Neither Fish nor Fowl
Valuation Challenges ….. for Real Estate Centered Enterprises

Business enterprises that are typically location dependent and operate out of purpose-built operational real estate are challenging to analyze for both business appraisers and for real estate appraisers. Both reflect characteristics that are closely aligned with business valuation, while simultaneously being subject to other characteristics deeply dependent upon the real estate, make these assignments challenging.

Examples include:

Restaurants Car Washes
Funeral Homes Golf Courses
Farms Movie Theaters
Bowlings Centers Manufacturing Plants

The business enterprise types listed above are commonly referred to by a number of terms that denote the interdependence of the business, and the real property out of which it operates:

  • Real Estate-Centered Enterprises (RECE’s)
  • Real Property Going Concerns
  • Real Estate Centered Businesses
  • Location-Dependent Businesses

The Nexus of Business and Real Estate Valuation Skillsets

Fundamentally, the value of real estate is primarily derived from its utility, or use. Which is why highest and best use is such a central premise in real estate appraisal.

For these types of special purpose properties, market participants focus on the income generating capacity of the property, which is primarily related to the business revenues rather than rent. It is business revenues that support not only the real estate, but also any investment in machinery and equipment, or FF&E, as well as business value and any needed licenses. In fact, it is business revenues that primarily determine a sustainable rental rate that supports the real estate value.

It is for this reason that business valuation skills are so useful in the valuation these property types. However, in order to comply with the Uniform Standards of Professional Appraisal Practice (USPAP) business valuation skills alone are not enough.

  • Valuation of the real property usually requires consideration of their contribution to the whole enterprise.

  • Allocation is the most appropriate way of valuing the real estate, personal property and equipment, as well as the business value, for these types of properties, rather than separate “Value in Exchange” opinions.

  • Attempts to appraise the real estate component only, the equipment alone, or the business, without analyzing the whole can often yield misleading results.

  • Allocations of value IS an appraisal of each component. Allocating a value for the business requires that the appraiser at least meet minimum competency requirements in business valuation. Similarly, allocating a value to machinery, equipment or FF&E is also considered a separate appraisal of those items and requires competency.

Recent Assignments

RMS Commercial Group has provided appraisal services all over the United States for virtually all property types, and specializes in the allocation of assets for special purpose going concerns. real estate appraisals, business valuations and appraisals of machinery, equipment, and FF&E for a wide variety of situations, including movie theaters, car washes, hotels, B&B’s, motels, restaurants, race tracks, special purpose manufacturing facilities, charter schools, marinas and golf courses.

Why Why Choose RMS?

Uncommon Expertise
"A going concern is an established and operating business with an indefinite future life. For certain types of properties, the physical real property assets are integral parts of an ongoing business.” - “Only qualified practitioners should undertake these kinds of assignments, which must be performed in compliance with the appropriate professional standards. It may be necessary for a real estate appraiser to collaborate with a personal property appraiser or a business appraiser or both on such an assignment." Appraisal of Real Estate, 14th Ed. (p. 63 and 64)

"When the scope of work includes an appraisal of personal property, trade fixtures or intangible items, competency in personal property appraisal (see STANDARD 7) or business appraisal (see STANDARD 9) is required." USPAP, Standard Rule 1-4(g)

"Whether labeled a separation or an allocation, it is an appraisal as defined in USPAP".

Bruce E. Jones MAI, ASA, BCA, CMEA – is one of the few highly experienced real estate appraisers who also not only holds the distinguished MAI designation from the Appraisal Institute and the Accredited Senior Appraiser designation from the American Society of Appraisers, but also holds designations as a Business Appraiser (Business Certified Appraiser (BCA), and as a Certified Machinery/Equipment Appraiser (CMEA).

The BCA designation is awarded by the International Society of Business Appraisers (ISBA) and is one of only a few designations that are recognized by the Small Business Administration (SBA) as a "Qualified Source" for business appraisals. I am also a Qualified Source for machinery and equipment appraisals for the SBA as a result of being awarded the coveted CMEA designation from the NEBB Institute.

For special purpose properties, accurately identifying and quantifying the contributory value of non-realty components is crucial to a credible real estate appraisal. How can an appraiser do that if they don’t know what those other components are worth?

Additionally, it is the business that pays the mortgage and maintains the property, rather than rent from tenants. Therefore, blindly applying a “market” rental rate to derive real estate value, without carefully analyzing the business is not likely to yield credible results.

Experience
Bruce E. Jones, MAI, ASA, BCA, CMEA, CTA leads the commercial division and brings over 30 years of real estate experience. In addition to holding the MAI designation as a real estate appraiser, I am hold the Business Certified Appraiser (BCA) designation with the International Society of Business Appraisers, as well as being a Certified Machinery/Equipment Appraiser. I specialize in properties that represent a blend of real estate plus an intangible business value, along with personal property such as furniture, fixtures and equipment. including complex and special use properties, as well institutional and investment quality assets throughout the U.S.

Integrity
Integrity refers to both the moral character of the appraiser, as well as the quality and content of the completed appraisal. Personal, professional, intellectual and artistic integrity are demonstrated throughout the appraisal process.
  • Professional integrity is reflected by thorough knowledge and research coupled with consistent application of best practices and professional ethics adopted by the industry.
  • Personal integrity involves being honest with yourself and others and consistently acting in a manner that is in conformance with your beliefs and value system.
  • Intellectual integrity in appraisal is best reflected by analysis and problem solving that is grounded in the scientific method to the extent that is possible and seeks to test and explain market behaviors through careful analysis and making observations from empirical evidence, in contrast to the well known "trust me" standard.
  • Artistic integrity comes from the creative problem solving process. The mental process of searching for a solution to an appraisal problem which is often not obvious. Creative solutions often have an "elegant" characteristic and may involve a simple change of perspective. It focuses on divergent thinking, the ability to develop multiple ideas and concepts to solve problems.

Our Services

Appraisal services are provided for the following real estate classifications, including:

  • Buy & Sell Decisions
  • Estate Planning
  • Appraisal Reviews
  • Market Rent Studies
  • Litigation Support
  • Market Analysis
  • Tax Appeals
  • Condemnation
  • Feasibility Studies
  • Partnership Buyouts
  • Desktop Business Value
  • Machinery/Equipment Appraisals
  • Office
  • Industrial
  • Retail
  • Apartment Buildings
  • Residential
  • Vacant Land
  • Hospitality
  • Special Use

Who We Serve

Appraisals completed by RMS Commercial Group are used for a variety of purposes, including:

  • Lenders
  • REITs
  • Accountants
  • Attorneys

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Specializing in Restaurant Appraisals
and Going Concern Valuations

About Bruce E. Jones

Bruce E. Jones, MAI, ASA–GC, BCA, CMEA leads the commercial division and brings over 20 years of commercial real estate experience.

Contact Info

   21 Main Street, Suite A, Toms River, NJ 08753
   732-374-9064
   rms@rmscommercialgroup.com
   www.rmscommercialgroup.com

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