Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Appraisers often consider traffic count as part of their analysis their is a correlation between the demand for a retail property and its average daily traffic count. A property that has 30,000 vehicles per day passing it is simply not as sought after as one that has 100,000 vehicles per day. Properties like C-stores know just how important vehicle traffic counts are to their bottom line.
In the same way, pedestrian counts are important to Las Vegas Strip properties. The Strip at certain points has literally millions of pedestrians passing over it during a 24-hour period. Even not so popular segments of the Strip can see 6,000 pedestrians an hour. Having or not having a strong pedestrian volume can make the difference in wild success or total and complete failure to a business.
The mistake some business people make is assuming that they can sell anything and be successful if the crowds are large enough. It's my opinion that you can stand at a business entry point and make a reasonable guess at to the percentage of individuals walking by who will enter it based on your own subjective assessment of its products or services. You may not always guess correctly but if you think it's a loser you can spend 15 minutes and make your own count, then move to another business location that excites you and make another pedestrian count over a similar period. The difference will likely be significantly higher, most people are intuitive regarding business popularity.
Businesses succeed or fail because of a number of factors that have nothing to do with customer volume, but many fail simply because they don't have enough business, so the Las Vegas Strip offers businesses that can get beyond start-up problems an opportunity to scale their business, to expand into a 24 hour a day market that offers millions of potential customers.
Casino managers are astute and know the pedestrian counts in and around all of their holdings. That doesn't mean that you will ever get any of that information as an appraiser. Unless you have someone who needs an appraisal and is willing to share the information you will never see it. You can stand at the proposed location and count pedestrians (I have done this), but it's long, boring, torturous work.
It's important for an appraiser to know how pedestrian traffic changes at a location during each hour of the day and during different days of the week. Some casino execs don't have a handle on this information. A potential tenant often has no idea what his business will be like at 2 AM on a Wednesday. If the location has only a nominal number of pedestrians at 2 AM it may be difficult to support the business. Some businesses develop relationships with casino / hotels and don't depend only on pedestrian traffic to generate business.
Some locations on the Las Vegas Strip benefit from both pedestrian traffic, hotel synergy and vehicular traffic, so when the pedestrian count slows there may still be thousands and thousands of potential customers passing by in their car or ordering products or services from their rooms.
New online food apps have created a source of business that does not depend on traditional pedestrian and vehicular traffic. Since the apps are new it's difficult to tell how much of an impact they will have on business over the next few years, but its not hard to believe that some businesses will see significant orders come in via the internet.
Appraisers of real property generally deal with analysis of fixed rental rates being paid based on the terms of a lease. Those who value businesses however have to consider all of the various sources of income and how they are expected to change over time.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/
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