I listen to the news and try to keep up, though it’s pretty hard these days, so I knew that automakers were in trouble. I just didn’t realize how bad it was until last week when I was asked to do a BPO or a mini-appraisal on a vacant auto dealership in El Monte.
Around my home here in Glendora, the Hyundai dealership located in the new Diamond Ridge mall had only been there 3 or 4 years, but last year–kaputski. The cars vanished and overflow from the Toyota dealership filled the vacancy. The vacant one in El Monte had been a Hyundai dealership as well, and, it turned out, the vacant one across the street from it had been a Chevy dealer. That area on Santa Anita near the 10 is supposed to become a regional mall, so I guess there’ll be a good use for the space. The City of El Monte will no doubt want something capable of sending in those now-lost sales tax dollars.
A BPO requires sold comps and active listings to support the new valuation of the property. What a shock! These comps of disused auto dealers were everywhere. How had I not noticed the big holes where auto dealerships used to be? It’s true–I’m not a car person. I can vaguely identify certain brands, but the models or the years are way beyond me. Nevetheless, auto dealerships are usually BIG and they are usually RIGHT NEXT TO THE FREEWAY. You’d have to be almost blind not to see they were disappearing faster than frogs and toads.
As always, the comps I had were too big or too small; they should be about the same size as the subject , if possible, kind of like the Three Bears. Also, the comps should be put to the same use. Well, that one was easy, vacant turned out to be the normal use these days even if the property had recently sold. So, we have an active listing in La Crescenta, a vacant dealership on Foothill. The most expected buyer? Someone who will put it to a new use, maybe a government agency or a medical center or an educational institution. Those are the fail-safe uses, I guess, but I don’t see too many sales tax dollars there.
Then, I did find several sold dealerships in Long Beach both near the Los Coyotes Diagonal. At least one appeared to be still in business. Hanging on by he fingernails? Two giant lots had sold in Norwalk, and I went to take a look. The properties, side by side, both had enormous newer-looking buildings with plenty of steel buildings in the rear sued for auto repair and the like. One building is now a used car and rental car company and seemed to have a few customers. The other one was selling car parts. Nobody was in the parking lot when I was there. Even the pawn shop across the street had a sign saying “Going Out of Business.”
My subject was a reasonably large dealership, so I couldn’t even look at the myriad of small dealerships that were up for sale just about everywhere. No takers there. Another sold comp I actually went and inspected was in the Puente Hills Auto Mall along the 60. That one really gave me a turn. Six acres, a former Nissan dealership sold for about $7 million–imagine 6 prime acres right next to the freeway exit, visible from the freeway–now vacant with a chain link fence preventing egress to the giant lot, most of which didn’t even have enough time as a dealership to get paved over. It’s just dirt. When I stopped to take a picture of the devastation, signs of life emerged–a security guard was right there watching the entire 35 second procedure.
Not only the Nissan dealership, but almost every other dealership in the mall was empty–one after the other. It’s a regular ghost town over there…All this happened and I hadn’t even noticed. That’s pathetic… Now that I think of it–aren’t there a bunch of dealerships going vacant along the 10 in Montclair? Where else are these ghost dealers?