Walkout basement Space considered above grade SF?

[mvpllc]

Hello all!

I'm appraising an office building that has a walk out basement space. One whole side of the building has the walk out doors and has a full wall of windows. Do I count this as above grade square footage as far as adjustments are concerned?

Thanks in advance for your help,
Tom

 

[stefan olafson]

Typically in commercial appraising you consider GBA or Gross Building Area not GLA or Gross Living Area. The walkout is a part of the GBA but is not part of the GLA. Key word is BASEMENT.

 

[Michael S]

Hello all!

I'm appraising an office building that has a walk out basement space. One whole side of the building has the walk out doors and has a full wall of windows. Do I count this as above grade square footage as far as adjustments are concerned?

Thanks in advance for your help,
Tom

Basements are not very common for any property type in New Mexico. However, I've dealt with a couple of office buildings with basements. For mid-rise/high-rise buildings this space is typically used for storage by the tenants. In one case a bank used to have a substantial presence in the lobby of the building and their vault was downstairs in the basement. In cases where there has been actual office space for lease the rents are quite a bit lower. If a typical space in the building is $15/SF the basement space might be only $11-12/SF. It will probably also be much harder to lease out.

In your case since it's walkout space I doubt there would be much market reaction. The easiest way to determine how to handle it is to see how the market reacts to it. Has it experienced above average vacancy? Is this space commanding the same type of rent as other floors in the building that are completely above grade? If there's no difference I would include all of it as Net Rentable Area and use that as the basis for adjustment. We don't have access to any assessor records so Gross Building Area is generally not available unless you measure it yourself or get access to the plans.

 

[AnonApprsr]

If a typical space in the building is $15/SF the basement space might be only $11-12/SF. It will probably also be much harder to lease out.

This.

Although I treat all Multi Family Properties, in the SCA, with GLA only, when it comes to the income approach I see the same thing when it comes to basement units. And in Condos that are basement units I see a lower per SF amount than units above. Research your market area for reaction.

 

[mvpllc]

I think this helps me out. Thanks guys!