Neighborhood retail appraisals require analysis of visibility, access, traffic count, parking, and nearby draws, such as a high school, a sports complex, fast food, or grocery. Sale prices of comparable properties must be adjusted for these influences. The dental office or vet near a school usually will appraise higher than the one in the quiet neighborhood.
There are 2 kinds of office condos around Frisco and McKinney: turnkey and shell.
The turnkey projects come ready for clients—or patients. The shell type are less expensive, but the buyer must finish out. Sales comparison and income approaches to value need adjusting accordingly. Medical-office condo values are enhanced if mixed uses exist in the same project. Some have restaurants and retail. Others have the doc, the dentist, the CPA, the attorney, and the vet, all in one project. Vacancy rates impact the income approach in these new projects.
Establishing cap rates for Class B office space is pretty simple. But the vacancy rate of subject vs. comparables was a challenge.
A former Walmart in excellent condition with beaucoup parking: The appraisal client wanted to know potential income if he moved his business into half. His idea was to rent to a medical equipment or other business that needed the parking and some extra storage.
Some buildings have more value because they convert to (or from) commercial flex space. The challenge here was whether the neighborhood codes would allow an alternative use if re-sold.
The retiring sub-contractor had used this metal building with drafting offices and lots of extra storage for over 20 years of construction jobs. He wanted an appraisal to show the interested party with the business adjacent. All that road construction was bad for business in the moment, but what about afterward? How soon?
A 10,000 SF machine shop with tilt-wall construction and a new roof should be an easy appraisal—we thought. Low inventory and being in the path of intermodal growth made it a little more complicated. Demand and competition were analyzed.
The appraisal of this HEB Midcities commercial flex space included a building refurbished with state of the art training and media areas—but only partially. The owner got rid of the inefficient atrium and remediated the asbestos and lead. Cleaned up two floors “to the studs.” But two floors remained, and elevator replacement. Moser Appraisals provided an “as-is, retrospective” value opinion, for further financing. We accessed both commercial cost and sales data sources.