1. Welcome to AppraisersForum.com, the premiere online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Help in a classification

Discussion in 'Commercial/Industrial Appraisals' started by rbrienza, Oct 13, 2011.

Thread Status:
Not open for further replies.
  1. rbrienza

    rbrienza Member

    4
    Sep 16, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Colorado
    I need some advice from you my peers.

    I need to figure out what classification the building is:

    Subject property - Converted SFR brick house build in 1909.

    Converted to commercial use ages ago.
    USE: Medical Marijuana dispensary - with apartment for owner of dispensary.

    Is this a retail store (Sec 13 page 26), is a drug store (sec 13 page 20), is it an office (sec 15 page 17), is it a Dispensary-urgent care (sec 15 page 23) --- ( i can explain the apartment).m2:

    I spoke with Marshal and Swift Valuation service - They have no Idea -- they said that to there knowledge I was the first one to ask.

    thank you
    ray
     
  2. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    978
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    way up high in the sky
    it's a bird, it's a plane, it's a man insane
    no, it's our president, LBJ...

    "Medical" marijuana is a joke

    It is a brick house built in 1909

    Appraise it that way, and if there is any special "trade fixtures" like counters, shelving, etc. then segregate them by the cost approach, and report them as non-realty items...
     
  3. Lost Cause

    Lost Cause Senior Member

    16
    Sep 17, 2004
    Professional Status:
    Certified General Appraiser
    State:
    New York
    Conformance?

    What would be likely alternative uses? Is the neighborhood full of former houses now used for commercial purposes? Is the neighborhood still primarily residential? You note that the subject was converted to commercial use "ages ago", so I have to assume there was some other commercial use/uses prior to occupancy by the marijuana dispensary.
     
  4. rbrienza

    rbrienza Member

    4
    Sep 16, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Colorado
    The area is in an older part of Denver....many of the converted houses in the area have been converted to offices (CPA, Lawyers, bail bonds etc) or retail -( boutique stores, hair salons, clothing, coffee shops). And yes it was commercial uses before. it was vacant for about 2 years prior to the marijuana dispensary moved in 18 months ago.
     
  5. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    978
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    In the cost approach, the construction dictates the cost, not the use. The land value dictates the H B U...
     
  6. Caligirl

    Caligirl Senior Member

    0
    Jan 27, 2006
    Professional Status:
    Certified General Appraiser
    State:
    California
    Converted-to the extent that it could not be used as a residence without 're-converting'?

    Does the income generated by the rents indicate a higher value than if sold as a residence?

    Does this conversion comply with existing zoning for commercial uses and use permits required for commercial use? Does the commercial use 'blend' with the surrounding buildings and uses?

    If yes-sounds like retail to me, with an apartment.
     
  7. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    978
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    That should not matter if you are only wanting to classify the building for the Cost Approach. The modifications matter but the base building should be calculated using its design.... That is a house costs less than a medical building costs. A house used as a medical building therefore should not be valued as a medical building. The spread between the two costs is a measure of obsolescence (inadequacy) of the house as a medical unit.
     
  8. rbrienza

    rbrienza Member

    4
    Sep 16, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Colorado
    All of you make great points.... And the reason I needed was for the Total Economic Life (TEL) You all have given me good insite thank you...

    ray
     
  9. Caligirl

    Caligirl Senior Member

    0
    Jan 27, 2006
    Professional Status:
    Certified General Appraiser
    State:
    California
    I did not suggest classifying it as a medical building, and it doesn't sound like one from Ray's description. Residence converted to retail is what it sounds like, to me. The 'medical marijuana' dispensaries I have seen range from someone's basement to leased storefront space but I have never seen one that is actually located in a medical building.

    For cost approach I might classify it as a SFR and add in the retail-specific items which are not personal property. Hard to tell without a picture, though! ;)

    Being here in California one question I would have about the brick itself would be earthquake compliance; however use permits would have addressed this. The question to answer then is if it is Class C or D, ie., wood or masonry, and possible seismic retrofit if used for retail.

    Good luck Ray.
     
  10. Howard Klahr

    Howard Klahr Senior Member

    142
    Oct 4, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Hey Ray,

    Keep in mind that the total economic life of an improvement converted to an alternative use is reduced, often considerably, as a result of external and functional obsolescence. The existing improvements are not likely representative of the ideal improvement which would be part of your H&BU analysis. Consequently, the land rather than the improvements would represent the greater potion of the overall value in a transitional area.

    For example, any newer construction within this area would be more representative of commercial improvements rather than a SFR converted to commercial use.
     
Thread Status:
Not open for further replies.

Share This Page