Truck parking appraisal

[Terrel L. Shields]

Use a weighted average cost of capital method, or a sinking fund method. With higher fed rates (the "safe" rate) it's going to be up to you to determine a risk rate. You're going to be hard pressed to find a true comp or two to extract a cap rate so try to find a proxy - maybe an RV park...I don't know.

And doing a proper HBU analysis does not mean an as-is value cannot be developed.

A "proper" HBU analysis does not mean you have some purpose in speculation about what an ideal use is. You are guessing unless someone is already proposing same. All those potential future uses are not knowable. So what is the point? What is it's best use vacant one what is its best use "as is" or "as proposed" if proposed construction. Most such properties have multiple ideal uses "as if vacant" , & personally I don't have the mind of the gypsy lady to predict which will actually happen. Buyers have a plan. Use as is or modify in anticipation of a future benefit.

 

[Zephyr999]

Use a weighted average cost of capital method, or a sinking fund method. With higher fed rates (the "safe" rate) it's going to be up to you to determine a risk rate. You're going to be hard pressed to find a true comp or two to extract a cap rate so try to find a proxy - maybe an RV park...I don't know.



A "proper" HBU analysis does not mean you have some purpose in speculation about what an ideal use is. You are guessing unless someone is already proposing same. All those potential future uses are not knowable. So what is the point? What is it's best use vacant one what is its best use "as is" or "as proposed" if proposed construction. Most such properties have multiple ideal uses "as if vacant" , & personally I don't have the mind of the gypsy lady to predict which will actually happen. Buyers have a plan. Use as is or modify in anticipation of a future benefit.

C'mon now, an as improved HBU must consider whether the current improvements are ideal, could be expanded, etc...most likely buyer and timing determines the when.

Again, a parking lot is most likely an interim use...there's no hocus-pocus in the HBU process of the as-improved site.

Ag land cap rates could set a lower range...Realty Rates land are investor performance and could set upper range.

 

[Terrel L. Shields]

HBU must consider whether the current improvements are ideal

No. The question is what is the current HBU of the property? Vacant or Improved as is. The current improvements may not be ideal. In fact, rarely are as the "ideal" property would be brand new with zero obsolescences. When do we see that except the day new construction sells?

 

[Terrel L. Shields]

Could it's current outdoor storage use be an interim use?

It likely is an interim use but the transition is somewhere in the future.

 

[Zephyr999]

No. The question is what is the current HBU of the property? Vacant or Improved as is. The current improvements may not be ideal. In fact, rarely are as the "ideal" property would be brand new with zero obsolescences. When do we see that except the day new construction sells?

As improved HBU has 4 factors for the appraiser to consider...the conclusion flows from the results...that's how diagnosis works.

 

[PL1957]

Outdoor storage, especially industrial outdoor storage, is a hot investment category. In many cases, it is NOT an interim use, but is the highest and best use.

 

[Terrel L. Shields]

Here plain storage mini warehouse facilities are often holding a site for a higher and better use down the road. But most new climate controlled facilities are rather too expensive to hold for only 10 years or so. In the GFC two properties that collapsed in price were duplexes and mini-storage.