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Another functional obsolescence question

Thebookdoesnthaveit

Thread Starter
Sophomore Member
Joined
Dec 16, 2011
Professional Status
Certified General Appraiser
State
Wyoming
I am appraising a commercial building with a "smart" HVAC. The thing has had multiple problems since the construction of the building and there is no way they can rip it out of an 8,000 square foot building and start over. Thus incurable. The additional cost to maintain the unit is around $2.00 more psf than any of the other R&M of similar buildings in the area. My thought was to capitalize the additional expense and deduct as functional obsolescence; however, it looks like that may be incorrect when I look at the appraisal book. Any suggestions??
 

Zephyr999

Sophomore Member
Joined
Oct 23, 2015
Professional Status
Certified General Appraiser
State
Wisconsin
Do you have the current Appraisal of Real Estate book? Page 627 will walk you through the thought and calculation processes.
Good luck.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
We have replaced quite a few units in larger buildings then 8,000 Sq.Ft - MY question is who is telling you it cannot be replaced ? And who told you it currently does not operate correctly ? Its rare anyone ever tells the appraiser about an-issue like this. Anyway sounds like this is a Repair or replacement issue not "financial obsolescence ' - in my area we could have our HVAC guys give an-estimate because it is Replaceable and at some juncture it will be . Just Saying :)
 

Thebookdoesnthaveit

Thread Starter
Sophomore Member
Joined
Dec 16, 2011
Professional Status
Certified General Appraiser
State
Wyoming
Found my answer on page 585 with the superadequacy with the swimming pool and associated expenses. looks like I was doing it the correct way. Thanks all
 

Alamo Cowboy

Sophomore Member
Joined
Mar 20, 2020
Professional Status
Retired Appraiser
State
Texas
We have replaced quite a few units in larger buildings then 8,000 Sq.Ft - MY question is who is telling you it cannot be replaced ? And who told you it currently does not operate correctly ? Its rare anyone ever tells the appraiser about an-issue like this. Anyway sounds like this is a Repair or replacement issue not "financial obsolescence ' - in my area we could have our HVAC guys give an-estimate because it is Replaceable and at some juncture it will be . Just Saying :)
Agree with Glenn. Came across this issue with several hospital assignments.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
Agree with Glenn. Came across this issue with several hospital assignments.
I do not think a swimming pool and your situation have anything in common. Your building has a crummy HVAC System and simply needs replaced, its a cost to cure at best and since IT'S an inferior system how could that be considered Super Adequacy ? its just the oposite :) LMAO
 
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