Short answer: for travel centers, hotels, gas stations and plants, appraisers split value between real estate and furniture, fixtures and equipment (FF&E). Lenders and programs lend differently on each, so the split can change how much you can borrow or block a program entirely.
Real examples
- A Texas travel center appraised at $20M was split $15M real estate and $5M FF&E, which blocked a USDA structure. The plan became a senior loan plus about $3M of mezzanine debt.
- A hotel appraised as land (about $2.4M) instead of an operating hotel (about $3.2M) needs a new appraisal with the right method.
What to do
- Tell the appraiser the property's operating use and provide financials.
- Ask how the lender treats FF&E before ordering the report.
Related: USDA · Private credit