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Highest And Best Use Issue

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is extinguishing the lease and creating a fee simple interest going outside the appraisal question?
No, but part of the H&BU analysis is to indicate the timing related to the reported conclusion i.e. might need to perform a detailed fundamental market analysis to support the conclusion
 
SanDiegoBrian, two of my earlier AF threads from maybe 5-7 years ago discuss fee simple vs. leased fee concepts fairly thoroughly, and discuss the bundle of sticks concepts related to them.
 
If this assignment is for tax purposes are you not valuing the property "as is" as of a specific date? Generally this would be a retrospective date and would have nothing to do with future development. Or is your client trying to argue that the property is being over valued by the taxing authorities due in part to a less than market lease and if they were to toss the tenant and redevelop the property the cost would be significant and the property still is worth the value assigned by the taxing authority?

Obviously I don't know your client, their motivation or the SOW. However, if it were me I would definitely sit down with them reviewing the general direction the report ,seems to be going based on the HBU and see if you can pull some more information out of them. An alternative would be to include multiple values in the report; one as is with the existing lease in place and one terminating the lease and redeveloping the property. You are already completing a number of these steps in your HBU analysis.
 
The Appraisal Institute had a property rights symposium and there was a discussion paper written on some of their working conclusions. Has anyone else read this? They have proposed a change in the fee simple estate definition to: The highest estate allowed by law. An inheritable ownership interest of indefinite duration.

I had some trouble finding the discussion paper online, but the reason for mentioning this in this thread is that, among other implications, it would propose doing away with the language of leased fee terms in most (or all?) cases, and refer to the property rights in that case as fee simple subject to leases.
 
it would propose doing away with the language of leased fee terms in most (or all?) cases, and refer to the property rights in that case as fee simple subject to leases.
Appraisers are the only ones that use the terms leased fee. The legal profession and title companies have always used the term fee simple subject to leases.

However, the existing terminology has been around for a long time and market participants, clients and even appraisers are confused enough that this continual changing of terms and definitions only really serves to foster confusion as opposed to clearing anything up in any meaningful way.

I had some trouble finding the discussion paper online,
A white paper summarizing the proceedings and outlining potential definition changes is expected to be exposed for comment early next year.
https://www.appraisalinstitute.org/ano/AI-property-rights-symposium-seeks-consensus-on-fee-simple/

It doesn't seem to have been issued yet.
 
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However, the existing terminology has been around for a long time and market participants, clients and even appraisers are confused enough that this continual changing of terms and definitions only really serves to foster confusion as opposed to clearing anything up in any meaningful way.
Bingo! Aside from the occasional conundrum this is a non-starter. Better appraiser education would clear up the problem -- the bundle of rights needs to be taught better. AI's busy bodies need to find true problems. Plus my AF avatar's name would be long an' bulky. A court recently threw out Whole Food's reneging on leases at stores they wanted to close. GOOD!! WF's lawyers should've never allowed a breach of lease to get as far as court.
 
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