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.

Retrospective Market Value – Vacancy & Unfinished Construction

Discussion in 'Commercial/Industrial Appraisals' started by PS111222333444, Dec 19, 2011.

Thread Status:
Not open for further replies.
  1. PS111222333444

    PS111222333444 Sophomore Member

    1
    Sep 2, 2010
    Professional Status:
    Certified General Appraiser
    State:
    Washington
    I'm bidding to appraise a multi-tenant office building as of the date of the owner’s death, which occurred November 2011. As of the date of death there was one vacant commercial space. How should this vacancy be factored in a retrospective pro forma? The pro forma period is the 12 months prior to the date of death. Would it be appropriate to apply market rent to the space and deduct for lease up costs – or to not include this space in PGI? It was vacant for the entire pro forma period.
    Additionally, the deceased owner started construction of a daylight basement apartment dwelling he intended to occupy. It is in mostly shell condition and the use would be legal, conforming.
    Any comments on how to deal with these issues is appreciated.
     
  2. nstanbru

    nstanbru Member

    7
    Feb 19, 2009
    Professional Status:
    Certified General Appraiser
    State:
    California
    I would apply market rent to this space. Your vacancy and collection loss would then apply to the building based on potential gross income. I seems to me that if you eliminated this space (income) you would, in effect, have a "double dip" in the vacancy/collection loss figure.
     
Thread Status:
Not open for further replies.

Share This Page