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Second Floor Adjustments

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undergroundPOP

Sophomore Member
Joined
May 29, 2013
Professional Status
Certified Residential Appraiser
State
California
I'm appraising a single-story retail building and one of the comps in the model is a two story building. Now in most cases, I would shy away from comparing single-story and two-story buildings, BUT these two buildings are very similar in GBAs, site sizes, physical condition and location.

What are some common techniques that you use to adjust a two-story building for a single-story subject property?
 

Gobears81

Senior Member
Joined
Nov 7, 2013
Professional Status
Certified General Appraiser
State
Illinois
If you don't have sales data to suggest the contributory value of the upper floor relative to the first floor, do you have rents?
 

DanBuck

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Joined
Sep 1, 2011
Professional Status
Certified General Appraiser
State
Connecticut
I'm appraising a single-story retail building and one of the comps in the model is a two story building. Now in most cases, I would shy away from comparing single-story and two-story buildings, BUT these two buildings are very similar in GBAs, site sizes, physical condition and location.

What are some common techniques that you use to adjust a two-story building for a single-story subject property?

Check first to see if there is a difference in price between the floors from the local market. if your not in a busy retail location or if your space is being used for quasi retail/office space there may not be such an adjustment..
 

Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
I appraised a typical neighborhood shopping center with a two-story portion. The upstairs tenants (three) were mostly office type tenants and the rents weren't a whole lot lower than the spaces directly below them. I would certainly say a two-story retail is inferior but whether it's 5% or 25% would depend on the data (mostly rents).
 

undergroundPOP

Sophomore Member
Joined
May 29, 2013
Professional Status
Certified Residential Appraiser
State
California
Check first to see if there is a difference in price between the floors from the local market. if your not in a busy retail location or if your space is being used for quasi retail/office space there may not be such an adjustment..

Are you referring to differences in lease rates between floors from the market area? I do have that data readily available, but I have yet to analyze it and put it into a table.
 

DanBuck

Member
Supporting Member
Joined
Sep 1, 2011
Professional Status
Certified General Appraiser
State
Connecticut
Are you referring to differences in lease rates between floors from the market area? I do have that data readily available, but I have yet to analyze it and put it into a table.

Yes the lease rates..There may be some difference but the idea here is- that depending on what youre using the space for it may not make such a difference (i.e retail used as office). Or, simply the market doesnt recognize a significant difference in price between the two, especially if it isnt a busy retail strip.
 
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