Liquor License Update – 2014

Full Report of Missoula Liquor License value:

In the last two years we have seen a dramatic change in the landscape of Missoula’s restaurant industry.  Several years of stagnate growth finally let loose to fast change.  New breweries such as Tamarack, Lakeside, and Draught Works paved the way for the Top Hat, Plunk and others.  In the last two years, new life has been restored to Missoula’s downtown with expansion heading south.

Much of the growth can be attributed to the cost of getting into business.  Coupled with real estate being at an all-time low and liquor license values being half of what they were at the high, entrepreneurs captured an opportunity – an opportunity that gives them a chance of success when typical cost are so high it is hard to make it past the second year.

So what is the true value of a Missoula city all beverage and gaming license?

There are several things to consider when looking at historical values for a Missoula license:

  1. Was real estate transferred with the sale? If the license was transferred with real estate, the buyer and seller can allocate values to each asset. When the value is allocated by the buyer, the recorded sales price of the license can be skewed.
  2. What type of license was purchased? There are several types of liquor licenses available from cabaret to full liquor and gaming.
  3. Can the license be transferred or is it attached to a property?

For the purpose of discussion we are going to focus on the City of Missoula all-liquor and gaming license. Like many markets, Missoula liquor license values are directly related to supply and demand.

Click here to see Missoula area taverns, bars and casinos currently on the market.


Missoula Liquor Licesnse - Wililams & Associates
Missoula Liquor License – Williams & Associates

The graph illustrates how high demand for Missoula liquor license starting in 2007- 2008 drove down the inventory and pushed the price to a high of $1,000,000 in September of 2008. A changing market opened up the supply in 2010 and slowly reduced the prices. Today’s average price is around $625,000.  2013 had the highest volume of sales out of any year in the last 8 years.

Missoula All Beverage and Gaming

Average sales prices indicate that the values of Missoula liquor license are rebounding from a low in 2010. This year is showing low inventory so look for this trend to continue.

This graph shows the sales prices for liquor licenses sold since 2006. The low price of $300,000 is an example of how values can be allocated to reflect different prices. In this situation it may not reflect a true sales price and should be considered an outlier.

Overview: The value of a Missoula liquor license is established because it is a scarce commodity and they are not issuing any more. Even when prices were pressured down due to supply in 2010, there were only 5-6 available at any given time. So when prices are down it only takes 1,2 or 3 sales before they become scarce again. At the high in 2009, buyers most likely had to convince a seller to sell because there were none on the market. Any time you are dealing with scarce resources with small numbers of supply there can be a big upside.

Our Recommendation: BUY

Click here to see Missoula area taverns, bars and casinos currently on the market.

Call for more information on available liquor licenses not currently on the market.

Jeremy Williams
Williams & Associates | Keller Williams Realty