Lower Price! Busy Absentee Owner Gas Station & Convenience Store-Suburb in North Denver CO
On March 25rd because of a temporary slow down from COVID-19, we have lowered the price again to $550K plus inventory.
The 2019 earnings were 153K from 2.7M in revenue. A spill was found leading to an Corrective Action Plan, “CAP”, plan that will be submitted to the State of Colorado in April. 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 remaining 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. The landlord is offering a new lease effective Sept 1st(end of current lease) which is taking this up to $4,000 per month which is still at least $2K per month below the current market rate and has been adjusted for in the adjusted earnings. Keep in mind that this was under a Letter of Intent for $675K plus inventory before until all this happened which is probably temporary. Because of the increase in the lease and COVID 19, we have lowered the price from 690K plus inventory to 550K plus inventory. Seller wants a cash buyer because the new lease needs to be in place faster than the SBA can move on this. He will carry 10%. Jeff
Gas Station and Convenience Store
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. 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 550K 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 4K and 24K 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 with the same lease and adding new owners liability for the tanks going forward or more likely start a new lease for 10 years with an extra 5 years automatic extension.
Location: Suburb in North Denver