August 19, 2020

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Apartment Building Appraisal

Apartment building appraisal in Arapahoe County, CO

Apartment building appraisal in Arapahoe County, CO

Apartment buildings are generally analyzed in terms of the number of the different types of apartment units that they contain.

These can include efficiency units, in which one room serves as a living room, dining room and bedroom, or one-bedroom, two-bedroom, or three-bedroom units. The efficiency units are most popular with single tenants who are interested in lower rents and who spend little time entertaining others in their units. The larger units are more popular among roommates, couples, or families. One-bedroom units tend to be the most popular in most markets, but this market is also the best served.

The number of bathrooms and restrooms in the units is another prime consideration. If a two-bedroom unit has two bathrooms, two residents can take a shower at the same time, whereas if it just has a bathroom and a restroom, only one resident can shower at a time.

The amenities within the units, as well as their quality, are other important considerations. Laundry rooms, garbage disposals and compactors and dishwashers are among the in-unit amenities that may be desirable. Apartment buildings or communities might benefit from pools, club houses, game rooms, laundry rooms, and fitness centers.

An appraisal of an apartment complex involves a comparison of the rental rates and sales prices of living units like those of the property being apprised. The best comparable sales are apartment complexes that have a similar mix of living unit types and similar amenities. The building areas in terms of square feet is less important. The best comparable rentals are of similar living units.

Another important consideration is who pays the expenses. It is usually advantageous to the landlord to have the tenant pay as many utility expenses as possible. This gives the tenant an incentive to conserve in their use of these utilities. Consequently, complexes with separately metered electricity and other utilities are preferable to complexes that do not have such separate metering.

Many characteristics of apartment complexes and units that are not as obvious can also play important roles in their value. Access to and views of public recreational facilities, such as parks and beaches, can have a large influence on value. Proximity to retail stores and to workplaces can also have a significant influence. All of these factors should be considered in an appraisal.

In analyzing an apartment property’s value, it is essential to look to the future and experienced Arapahoe County commercial real estate appraisers licensed in the State of Colorado can help you with that.

Apartment leases are typically only one year and turnover can be high, so these properties are highly responsive to changes in the demographics and lifestyles of the markets in which they are located. New apartment projects or changes in the character of the neighborhood influence the value of apartment projects relatively quickly compared to other property types.

It is also important not to neglect the potential to sell ownership interests in an apartment building. Condominiums are buildings in which occupants own the interior of their units and have common ownership in a separate legal entity that owns the exterior and structure of the building. Cooperatives are buildings in which the occupant leases their individual unit but has an ownership interest in a legal entity that owns the entire building. It may be desirable to convert an existing rental apartment complex to one of these forms of ownership, thus reaping income more quickly. Certain Government restrictions, however, such as rent control, might prevent this.

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August 19, 2020

Comments Off on Appraisal of Air Rights & Transferable Development Rights (TDRs)


Commercial Real Estate Appraisal

Appraisal of Air Rights & Transferable Development Rights (TDRs)

Appraisal of development site in Jefferson County, CO

Appraisal of development site in Jefferson County, CO

Strictly speaking, all real estate appraisals are, in fact, appraisals of real property. Real estate is physical land and appurtenances attached to the land.

Real property consists of all interests, benefits, and rights inherent in the ownership of physical real estate. In no other property types is this distinction brought out more explicitly than in the appraisals of transferable development rights and air rights.

Transferable development rights, or TDRs, consist of the rights to develop one property that can be conveyed to another property. The rights to develop a property are limited by zoning laws, local ordinances and, in some cases, state and federal laws. Local governments are most likely to permit the transfer of development rights when their transfer facilitates the preservation of agricultural land, recreational property, open space, or historic properties.

These properties might be zoned in such a way that the owner is legally permitted to develop the real estate at a higher density. These rights can sometimes be conveyed to a non-contiguous parcel.

The property that receives the development rights is one that is better suited to take advantage of the higher density than the development rights permit. This is known as the receiving parcel and must be in a receiving zoning district. The parcel that conveys some of its development rights to another parcel is known as the sending parcel and must be in a sending district.

A local TDR provision may define development rights in units per acre, in square feet of floor area, or in units of height of structures, among others. It may establish rights in terms of credits that may, in turn, be sold. In almost all cases, the sending and receiving districts for transferable development rights are defined by local zoning ordinances.

Development rights can be purchased by private land owners who own land in a receiving district or by municipalities who wish to preserve property in the sending district. Municipalities typically issue bonds to fund such purchases. The development rights may also be transferred from a sending district in one municipality to a receiving district in another through inter-municipal agreements. If there is no immediate demand for development rights in available receiving districts, the development rights can be purchased and deposited in a development rights bank.

The preferred method of developing a professional opinion of the value of TDRs is a sales comparison approach using sales of similar TDRs as comparable sales. It’s critical that this analysis is performed by any one of a number of qualified Jefferson County commercial real estate appraisers who are state certified in Colorado, provided they have extensive experience in the valuation of TDRs. In the absence of sufficient sales of this type, however, the difference per unit of sales of properties with the defined development rights and properties without the development rights also provides an acceptable indication of value.

Incorporating an income approach, by contrasting the income potential of different development densities, is another method that may be used to support a value conclusion. The difficulty with these last two approaches is that the value of the transferable development rights to the sending parcel might not equal the value to the receiving parcel, as the level of density conveyed might not be demanded in the receiving district.

Air rights are rights to use space a defined distance above the land surface. If they are transferable, they represent a type of transferable development right and are valued in a similar way. A major difference between air rights and more conventional transferable rights is that exploiting air rights often requires additional construction elements to support their use. This may involve a building foundation that can support additional loads or structural elements above the surface level on which construction at the air rights level can take place.

November 20, 2019

Comments Off on Warehouse & Industrial Property Appraisal


Commercial Real Estate Appraisal, Miscellaneous, Real Estate Appraisal

Warehouse & Industrial Property Appraisal

Warehouse industrial property appraisal in Indianapolis, IN

Warehouse industrial property appraisal in Indianapolis, IN

Most properties can be classified as either warehouses or manufacturing plants, with plants usually including some element of warehouse space for: storage of materials, finished products, and components of the fabricated product.

Manufacturing space can be subdivided into area that can accommodate a variety of manufacturing processes and is general purpose and specialty space that is designed to accommodate a specific manufacturing process.

With warehouse space an important component of any real estate that is industrial, it is worth paying attention to this property use. Evaluation of warehouse space includes the construction itself, the truck yard areas and the location of this house in relation to both providers of materials and components and to the recipients of their goods. Choosing qualified Indianapolis commercial real estate appraisers is an essential step in getting an accurate appraisal that provides you with a reliable commercial property valuation.

The configuration of warehouse space restricts the storage methods it is an integral and can adapt feature to consider. The spacing of the building’s columns cannot be altered and the storage system must fit within these limits.

Broad column spacing and a ratio of length to width for a warehouse in laying out the forklift aisles and storage space, Space of about two to one give the utmost flexibility to the user of the space.

Another crucial factor within the building are ceiling clear heights. Warehouse space is evaluated, not only in terms of cubic feet of storage space, but also in terms of square feet of building area. Warehoused goods can only be piled as high as the bottom of the ceiling joists. The clear height of the ceiling represents an integral component in the capacity of the warehouse.

The loading docks, along with the areas directly behind them and the truck yard areas facing them, are the upcoming features. There must be enough space between the dock doors and the saved goods for forklifts to maneuver. The paved truck yard area in front of the docks has to be big enough for trucks to back into and push away in the dock doors, even if doors are being occupied by other trucks.

Flush docks are both the most common and preferred type of Docks in many modern warehouses. Dock seals across the top and sides of the doors stop foul weather from leaking into the space between the dock doors and the trucks, dock levelers offer a smooth journey for the lift trucks from the warehouse floor into the truck beds, and bumpers stop the trucks from hitting the dock-height flooring or levelers.

Manufacturing space that has been specifically designed for a manufacturing process can pose a challenge. The space may be ideal for manufacturing operations that were current, but the value of this space to another user must be considered in appraising its market value. This might be a substantial source of diminution in its market value if another user wouldn’t have the ability to use the area as the current user.

Industrial properties’ evaluation requires a somewhat different set of skills than the appraisal of office, retail, or multi-family properties. The appraiser must have familiarity with warehouse and supply chain operations, the challenges that truck drivers face, and a basic knowledge of electrical systems.

October 24, 2019

Comments Off on Mixed Use Commercial Property Appraisal


Commercial Real Estate Appraisal

Mixed Use Commercial Property Appraisal

Mixed use building appraisal in San Diego, CA

Mixed use building appraisal in San Diego, CA

Mixed use properties usually consist of some mix of office, retail, and multi-family, uses, or flat. The mixed-use aspect of the properties introduces several complications with their valuation that are unnecessary to contemplate in single-use property valuations. Qualified San Diego commercial real estate appraisers that are certified by the State of California understand how to manage these intricate commercial property valuation complications.

First, every one of the property types has different kinds of leases, and flat units could be leased, or sold as condominium units. This leads to various kinds of cash flows. Flat rentals generally have a one-year period having a given lease through the period. Retail leases and office generally have periods that are longer. The rents for all these property types generally grow on the period of the lease but the manner where they grow is not same. Office leases frequently correct according to producer price index or a consumer, a CPI or PPI. And retail rentals might use both of the systems.

On a percent of revenue, retail leases may be based in big mixed-use developments. All these are called percent leases. A percent lease is going to have fixed rent that represents a percent of gross sales. This enables usually the property owner, the lessor, to be involved in the achievement of the retail tenants. This kind of lease is atypical for smaller mixed-use properties.

The uses that are different additionally likely have distinct total capitalization and discount rates. What this means is that either the distinct planned cash flows has to be united as well as the entire net income has to be capitalized employing a blended complete speed, together with the direct capitalization rate being a mixture of a couple of capitalization rates on the basis of the percent contribution of the net income from every use to the entire net income, or the planned net income from every use has to be marked down individually as well as the totals added together.

Another factor, of concern only with respect to substantial mixed-use developments, is the interaction involving the property uses that are different. Office renters and flat component might function as customers for retail stores, and office units might be worked in by flat component renters.

All these will be the more or less renters that are captive. This may have a tendency to supplement income from offsite sources. In case the mixture includes only retail and office uses, the occupancy for both uses or just one could be greater.

With regard to smaller mixed-use properties, an office or retail part may be a variable that buyer or an apartment unit renter takes in purchasing or renting a unit.

Eventually, there are added complications in fixing and choosing similar sales to get a mixed-use property. With bigger, more sophisticated mixed developments, it’s not likely that we now have several other mixed-use properties with all the same makeup of uses, in the exact same marketplace.

October 24, 2019

Comments Off on Religious Commercial Property Appraisal


Commercial Real Estate Appraisal

Religious Commercial Property Appraisal

Most properties that are spiritual have a lot of sentimental value to their congregations and to their clergy. That is where family as well as their friends were wed, where their kids were baptized, where they came to chew over a few of the most profound issues of life, and where funeral services of the close to them took place.

Sentimental worth, nevertheless, isn’t market value.

Religious property appraisal in Fort Worth, TX

Religious property appraisal in Fort Worth, TX

An appraisal of a spiritual facility frequently needs a little more creative thinking than evaluations of other sorts of property. In the State of Texas, you’ll want to enlist the help of one or more very experienced Fort Worth commercial real estate appraisers to perform a thorough appraisal of the commercial property. This appraisal will enable you to determine an accurate opinion of value for any kind of religious or other commercial property in Fort Worth, TX.

The most frequent form of spiritual property in America is Christian churches, although spiritual properties contain temples, synagogues, and mosques. Of assembling a building of stone masonry, the labor costs are extremely high relative to other modern forms of construction and such a construction is uncommon in buildings that are new.

These components might bring about market value if your congregation means to offer the church and rent it back, or if your congregation that may use the components are available. Such a trade is prone to be possible in regions that are more prosperous with congregations that are rich. In such cases, the church’s seating capacity, parking, and classrooms, and the equilibrium between these, are factors that are significant.

More generally, however, these components don’t promote the best and highest use and the ones that are severable, the stained-glass windows, organ, and pews, are sold individually.

Adaptive reuse of a church is comparatively common when ownership changes. Churches are converted to multi-family dwellings, offices, senior living facilities, and recreational centers.

Other kinds of uses that are spiritual are often specialized than Christian churches, plus some evangelical Christian spiritual facilities happen to be designed in the beginning more as theaters than as conventional churches. These properties may be more easily embraced to alternate uses.

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