Busy Absentee Owner Gas Station & Convenience Store-Suburb in North Denver CO
Please read this paragraph first: This business WAS under a Letter of Intent but it has expired. We have not renewed it for the current buyer for 2 reasons: A spill was found leading to an Corrective Action Plan, “CAP”, plan that we just found out will not be submitted to the State of Colorado until April which will take another month afterward for comments back. The station gets to operate as normal through this process and the cost to fix this is being handled by the current lease holder and the “Superfund”. To be clear, the new buyer will not have any responsibility related to the cost of this cleanup. The lease for the Gas Station is a sublease and a condition of the transfer of the lease is that an amendment is added transferring any future liability in the running of the station and convenience store to the new owner. This is traditional and normal and the current owner was very surprised they didn’t ask for this to begin with. One problem with the current potential buyer was that he was committed to using an SBA loan that can’t be applied for until after Colorado’s “CAP” approval which means that might happen in May/June with an expected funding for August/September. The Seller would like to see something happen sooner so he can fully retire. The 2nd reason is that they didn’t like the new lease which basically is taking this from $2,500 per month to $4,000 per month which is the current market rate. Since there is 5 years left on the old rate, a compromise should be possible. Keep in mind that this was under a Letter of Intent for $675K plus the cost of the inventory or the fuel and convenience store at the closing estimated to be an additional $90K. Serious inquires only. Jeff
Same owner since the mid 1970’s who has been absentee for 25 years. He has had the same store manager since the mid 1990’s who will stay and continue to manage the store if the new owner would like him to. He is selling because he needs to fully retire.
This is a location driven business that provides steady revenues and earnings which is both sustainable and will not change the day after the ownership transfer. Both the revenues and earnings have steadily increased over time including 2018’s revenues of 3M with properly adjusted EBIDTA of $205K. This business has 70,000 in FF & E included.
An owner can change the products in the convenience store and price them as they would like. The only exception to this is the lottery. His current license only allows him to sell fermented malt beverages which includes beer, wine coolers, spiked seltzers, etc. In order to sell other alcoholic beverages so the new buyer would need to surrender your current license and apply for one that would allow you to sell other alcoholic beverages. Most gas station convenience stores only carry beer so no changes are needed except the transfer of the license. Since the change in the beer strength allowed as of January 1st 2019, their beer revenue has doubled. Expanding this is a potential area of future growth. Plus, traffic has steadily increased over the years.
The company has virtually no advertising budget and the owner believe this business can be more profitable with a new owner who could give it more attention. The Sales price is $690K plus inventory which is less than 4 times the earnings. Gas Station/Convenience stores typically sell for 4 to 5 times the adjusted EBITDA. His cost of inventory for the store runs between $48K and $57K depending on the season and fuel between $4,000 and $24,000 depending on the date of their last shipment.
The buyer can be absentee with no specific experience is necessary. The current owner and manager can train the new owner quickly.
The current agreement with the nationally branded gas station is up in less than two years but the Seller believes that all buyers will choose to extend that contract which will be the Buyers choice. The real estate lease is up in August of 2020 but can be automatically extended until 2025 and can negotiate a longer lease at any time.
Location: Suburb in North Denver