Jack built a 5,000 square foot block building with a slab foundation on a high traffic corner, next to the regional mall. He put six glass rollup vehicle doors along the frontage wall, and installed plate glass on the side office and entry areas to accommodate his tire store tenant, who signed a 15+ year lease.
The recent recession claimed the tire store, and Jack was left with an empty building and little money for renovation. He painted and insulated the lower third of the rollup doors, backed them with drywall, and leased the property to a paint store.
The Assessor’s dilemma is how to categorize and then value this property, given a complete change in tenancy with only limited change in design and functionality. Contemporary vehicle service stores have higher lease rates than general commercial space, due to typically small size and specialized components (rollup doors, utility capacities, and a design that can accommodate equipment, such as automobile lifts).
Question: Who is the best next tenant?
Hint: The answer must be consistent with the precepts of Highest & Best Use.
Answer: Auto service.