Where Have All the Auto Dealerships Gone?

Nissan Motor Company, Limited Nissan Jidosha K...
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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?

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What Happens If You Rent & Your Home Is Foreclosed?

Fannie Mae Announces New Policy for Renters in REO Properties
for-rent

Recently,  Fannie Mae released an announcement describing a new policy that will allow qualified renters to remain in Fannie Mae-owned foreclosure properties. Formally known as the National Real Estate Owned Rental Policy, it is meant to address the difficulties faced by tenants who – often through no fault of their own – face serious disruptions in their lives because the owner of the property in which they live has been foreclosed upon.

Renters in properties owned by Fannie Mae will be able to stay in their homes after the foreclosure. Note: this applies only to renters in the property at the time of the foreclosure. It does not apply to the borrowers who lost the home or any of their immediate relatives.

Any  type of property  can qualify: single-family homes, condos, co-ops, manufactured housing, or one-to-four unit buildings.

Key features of the new policy are

  • After the foreclosure is complete, renters will be offered the opportunity to either accept an incentive payment to vacate the property (“Cash for Keys”) or they may sign a new month-to-month rental agreement with Fannie Mae.
  • Fannie Mae will not require payment histories or credit checks.
  • Renters will be charged market rents. This means renters may have to pay higher rents.
  • No security deposit will be required. Nothing is said about the former landlord’s possibly unreturned security deposit.
  • The property will be for sale, and may undergo repair or rehab work, during the term of the tenancy. Tenants must cooperate with the sale.
  • If the property sells, the lease will transfer to the new owner who may decide to occupy himself.
  • The property will be managed by a real estate broker and/or a property management company.

Under this plan, tenants, many of whom are not aware their home is even in foreclosure,  are not forced out into the street. But, all leases will be month-to-month, meaning tenants may have to move within 30 days of a sale.

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