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Retail Condo unit

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SMF

Thread Starter
Sophomore Member
Joined
Oct 11, 2007
Professional Status
Certified General Appraiser
State
Virginia
I am working on an assigment for a retail condo unit and was wondering whether or not I should or could use the cost approach?

I was hoping some of you might have suggestions as I am fairly new to working on commercial appraisals.

Also any help, hints or suggestions on the best methods for the income approach would be appreciated. right now I have plenty of rental data, and all of the comparables are triple net and buildout is covered by the tenant.
 

Lost Cause

Senior Member
Joined
Sep 17, 2004
Professional Status
Certified General Appraiser
State
New York
You don't mention if this retail condo unit is a free-standing structure or an integral part of some larger structure. Should it be part of a larger structure, I would say the Cost Approach to Value is meaningless and cannot be reasonably developed.

Of course I am of the opinion that the Cost Approach has nothing whatsoever to do with Market Value anyway. However, even for those who disagree in general, it would be difficult to come up with a reasonable way to segregate the subject portion's cost/value from the overall structure's cost/value. I hope no one is going to suggest a pro-rata share of the overall replacement cost.
 

MNRural

Member
Joined
Oct 11, 2006
Professional Status
Certified General Appraiser
State
Minnesota
The market wouldnt or couldnt consider the cost to build new, depending on the configuration of your subject.
 
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