One for the experts

[Bryan Reynolds]

I have read this board when possible, not much time, and have realized there is an enormous amount of experience and would like some advise.

I have been asked, not sure whether or not I will accept yet, to appraise a section of a 1+ acre site that is excess land of a fire department. This section is to be surveyed and therefore any appraiser should complete the appraisal as a hypothetical condition and note the client requested that the value be estimated for the smaller tract and the survey had not been completed as of the effective date of value. The opinion of value is subject to survey and location of defined boundary lines. Also, reserve the right to amend the value after the survey is completed.


The problem is the back section .50 acre (I havent received the estimated site dimensions) is at the rear of the site. There are approx. six adjacent properties. I am thinking that is the market for this parcel of ground.


Any ideas???

(Someone had advised to develop an opinion of value for the total site as vacant, and then develop an opinion of value for the new site and the difference could be attributed to the rear parcel) (develop a price per sf ft)

Highest and best use is probably continue use and it is now.

Any thoughts would be appreciated.



I have been exposed to small site being purchased for a water tower, but not inner city such as this.


Thanks

 

[George Hatch]

Okay, if Iunderstand your post correctly, you're working on the rear half of a 1 acre site. I assume the front half has been improved with a fire station.

Two questions immediately come to mind. Minimum lot sizes/dimensions and access. Is the rear half, upon completion of the survey, going to be large enough to stand on its own as a legal lot? This includes consideration not only of the sheer size, but also minimum widths and depths based on the zoning authority's requirements. Utility hookups and access might also be an issue.

The second question, access, is where I fear the greatest problems may arise. A lot isn't much use unless you can legally access it. Is there a driveway access, either by easement or lot line, that allows for vehicular access from the street to the site? If so, you'll have a "flag" shaped lot or an interior lot with driveway easement. Either is okay, assuming the zoning doesn't inhibit the development of the site because of the easement or narrow driveway for that specific use (like, no office buildings on lots with easement access). You didn't say what the zoning situation is like there, so I'm assuming its residential. Ironically, the minimum acceptable width for the easement, driveway or whatever it is may very well depend on the ability to turn a fire engine around (you'll want to check and see). Around here, the magic number for new single lots is 20-24 feet wide. That's pretty wide for a 1 acre site.

If there is no provision for access, then your most likely buyer is one of those 6 adjacent properties, and that would be for expansion purposes. The best way to show that value would be to compare two similar lot sales, one significantly larger than the other, to determine the contributory value of the excess, which will be much lower on a price/unit basis than the "core" value of the site as demonstrated by the smaller lot. Apply the difference to your other comparable sales and you're done. The only thing left is to try and figure out a reasonable exposure time.

Another theory for the excess lot value thing is the 3-2-1 theory or some variation. We use this one on narrow commercial lots under the theory that the front third is worth about double what the 2nd third is on a Price/SqFt basis, which in turn is worth double the rear third. Depending on your configuration (really narrow and really deep), you might even try breaking it into 4ths.

Lotsa tools and lotsa ways to go on this. Try one on for size and see how you like it.

George Hatch

 

[Steve Owen]

I hate it when George gets to put in the first answer. I have nothing to add to his excellent advice. lol.

One thought, though. Don't limit your market to those six adjoining properties until you are sure. There have been a lot of times that I thought something didn't have much market and then the market came along and proved me wrong.

Examples: bar in old warehouse building; travel agent on tiny, odd-shaped parcel; attorney office in former boy scout headquarters; major trucking company headquarters in remodeled department store; barbershop on a parcel much like you describe; etc.; etc.

I very rarely call anything a single use facility these days. Similarly, your land may have uses you haven't considered. Suggestion: talk to some local realtors about what they think the market might be.

 

[xmrdfghap]

<span style='color:brown'>I have always worked on the assumption that if I can think of a good use for a property, someone really smart could find a GOOD use for it. Do not be too quick to decide a site has no (or not much) value.

Reminds me of the interstae frontage of a small acrerage....10 to 15 as I recall. small area adjacent to the frontage road, drops a hunred feet or more at a greater than 45 degree angle, balance relatively flat, but only good for a parking lot...or so the appraiser thought. He appraised it as such, and because there was no need for a parking lot in that area, the value he came up with was almost negative. The owner practically gave it away due to cost of maintenence and taxes.

Guy that bought it built a water slide on it. Saved him LOTS of money not having to built a massive structure to support the slide.....it had that really nice slope as part of the site. Suddenly that site had a value in the 7 figures.

So one of the things I look for in a site, after looking at the liabilities and assets of a given piece of ground, look at the potential for opportunities.

And like I said "if I can think of a good use for a property, someone really smart could find a GOOD use for it."</span>

 

[Bryan Reynolds]

Thanks for all your excellent advise.

The zoning of the current site is P1-professional. The site is 1.12 acre and in is a city lot. It does not appear at present there would be any access to the rear portion and I think a Church which is two lots away is trying to purchase the adjacent residential site of .34 acre with a residence on it and then they would have access to the rear of the 1.12 acre tract that will be divided.

The rear of this site is indeed adjoined by 6 residential sites.

The other problem, of course, is the very limited number of vacant land sales in the city.

In your example I assume you would considered residential sites, as this appears the market would be these six adjacent properties for expanison purposes.

If the Church is successful in aquiring the residential property next to the fire station, they may be planning on turning this area into parking, or playground, etc.

I will be interviewing all parties invlolved this comming week.

Thanks again for everything.