Land Condominiums

[Fairfax Kim]

Anyone have experience appraising land condos?

I've been asked to appraise several outdoor storage units. They are vacant land units with condominium ownership. These are rare in my area and there are virtually no sales.

I have several emails/calls in to the county and some developer/Realtors, but thought I'd throw this out to you guys to see if anyone here can give me some insight. (P.S. Yes, the lender has been informed that I've never appraised land condo's before - 'cause I know that's what your thinking.)

 

[PropertyEconomics]

Exactly what is a land condo?

 

[CANative]

Vacant land condo – This condo consists of units and common elements, but the units are all vacant. After the condo is registered, the unit owner can build his/her own building on the land.

http://www.sse.gov.on.ca/mcs/en/Pages/Condos_Different_Types.aspx

 

[rbrienza]

kind of likea ground lease/ Pad Site? ...would be my guess...

Ray

 

[PropertyEconomics]

kind of likea ground lease/ Pad Site? ...would be my guess...

Ray

A pad site that is owned? Condo payments on the balance of the common elements?????? Sounds to me someone has calculated a means of charging for common area maintenance with a building footprint (land) owned by the ultimate building developer / owner.

A rather strange idea if you ask me.

 

[Tim The Enchanter]

Very interesting.
But stupid. :icon_lol:



If I don't now what it is, I'm turning it down.
It's just weird.

 

[Ken B]

Wouldn't a "condominiumized" MHP be something similar? A condominium is a form of ownership. In that sense, what real difference would it be if the definition of the condominium unit in the condo docs describes the interior surfaces of a living unit on the 40th floor of a high-rise residential tower, a two-story detached SFR, a commercial warehouse, a retail space, an office space, a horse stall, a mobile home padsite, a residential storage unit, or any other space that one's wild imagination could envision? It is the undivided interest in the common elements that is the key.

By the way, the strangest "condo" I have appraised was, in fact, unsold horse stalls in a condominiumized horse boarding and training facility. The "stall unit" purchased by the condo owners was literally nothing but the air between the walls and a 6" deep section of what could be dirt, if kept level, but could, again, be nothing but air if one was to excavate the dirt to the bottom plane of the unit. Every other component of the building and grounds was part of the "commercial unit." Legally, the facility was created in the same fashion as a condo-hotel. Didn't get paid enough for that one.

 

[kristin0731]

In Titusville Florida there are a couple of RV park/resorts that are set up like this...though they are residential you may want to look into them. I have done appraisals in the park before but always had ample sales to utilize right in the neighborhood so I never had a problem with it. Each platted lot is considered its own condominium unit no matter if you just park your RV on it or you build a site built house on it. The one I am most familar with is called The Great Out Doors (TGO) on SR 50. Maybe if you could talk to some of the realtors or the land planners that are involved in these types of developments they can give you a little more background on why they choose to set them up that way. Good Luck!

 

[H.B. Userman]

I just appraised nine condo land units. The "condo" confuses people at first becasue the land is vacant, but it can be simplified. All it really means is that you're appraising land that already has the HBU figured out, which is easier than figuring it out from scratch. If the only legal use is storage units, then compare it to land that was purchased for a similar use. The issue there is what unit of comparison to use, becasue the $/SF of land can't be used if the condo itself is only an outline of a future building. Probably the $/SF of building area would be best. Consideration must be given if the condo fees are over or under typical amount that would be spent on liability insurance, maintenance, etc.

Whats the scope of your work? Single retail vaules, bulk value? In my assignment, I had to discount the future improved sales and back out construction costs. A lot like appraising a proposed subdivision, instead in this case the improvements are buildings instead of roads.

 

[Fairfax Kim]

Thanks, everyone.

So, to clarify - These are small (2,000-3,000 SF) industrial land condos located behind some warehouse condos. They are intended to supplement the warehouse space. All of the condos are new and the developers are providing the option for future tenants/owners to purchase or lease an outdoor storage condo (land condo) along with the warehouse space. The land condo is intended to be a place where the warehouse users can park their trucks and store extra supplies.

There is some rental data for industrial outdoor storage in the county so I should be able to estimate the market rental rate for industrial land storage and do the income approach. I found another place that has similar industrial land condos, but they've all sold along with improved warehouse condos. I might be able to use this as supporting data.

So, that's where I am now. Thanks for helping me think this through, guys!