With 5 years experience as Commercial Real Property Analyst for Any Municipality County, Dixie Phair often helps the valuation department with new or rehabilitated income properties. They have brought her a doozie.
Here are the facts:
- The building: a downtown historic structure completely and beautifully rehabbed to 1st floor retail (leased) and 2nd floor restaurant (vacant).
- The neighborhood is nearly fully developed, with no offsite parking immediately available for the potential restaurant. In fact, parking is scant for the existing retail. The historic flavor overrode typical parking requirements for approval.
- The project was finished just prior to reassessment.
Here’s the dilemma: How to now capture the improvement of the property yet measure inherent obsolescence?
- Calculate the additional site area needed to accommodate required parking (including ingress/egress) per city code, and the probable value of that site plus needed paving, striping and fencing. This is functional obsolescence attributable to insufficient parking.
- Since Dixie has benefit of IncomeWorks, she also was able to quickly evaluate the rehabbed building and set the model to auto-fill and complete the Discounted Cash Flow (DCF) analysis.
- Dixie entered the parking site acquisition estimate, along with the all the costs of paving, striping, fencing, and more. She also entered a sufficient time span and the additional costs involved in leasing the restaurant area.
The IncomeWorks DCF instantly laid it all out. The result was printable support showing the logic, math and professionalism employed by Any Municipality County to achieve an equitable assessment of this property!