Why sellers have trouble with former gas station locations.
Because locations that served at gas stations are usually located on busy street corners and easy to access, you would think that they are prime real estate for developers. However, this isn’t usually the case. This is because former gas stations are almost always considered contaminated sites. But why does this matter? Here’s why selling contaminated property, such as gas stations, is such a challenge.
Across the country, many prime retail locations remain vacant because they were previously gas stations. The sites of former gas stations often remain on the market for many years because gasoline from underground tanks seeps into the ground, contaminating the property. The cost and time needed to remediate these sites are extensive, often requiring millions of dollars and several years before a site is declared safe.
Due to these high remediation costs, it’s important for sellers to find a buyer with deep pockets. Usually, small businesses cannot afford to redevelop former gas station sites. Instead, sellers target large, nationally-based companies who can afford the major investment. According to commercial real estate experts, drugstores, banks, and fast-food chains are usually the top buyers.
Even if a former gas station site is purchased by a new gas supplier, the buyer still has to contend with remediation costs. This is because the Environmental Protection Agency (EPA) oversees the remediation efforts of contaminated properties. Before a property can be redeveloped, the site must meet the EPA’s regulations on clean-up. So, regardless of what a buyer wants to do with a contaminated site, they will have to fulfill the EPA’s requirements for remediation.
This is why selling contaminated property, like former gas stations, is difficult. Interested in learning more about the commercial real estate market? If so, then contact the experts at California Commercial Realty Advisors, Inc. Our dedicated team is eager to assist you with all your real estate needs today.