The Winter 2008 issue of The Appraisal Journal examines the distinctive characteristics of special property interests – a key step in developing a valuation estimate. Featured articles specifically focus on the unique aspects of aircraft hangars, water rights, limited use service hotels, industrial incubator warehouses and apartments, and how these special properties are valued.
The spotlighted article, “An Introduction to the Valuation of Aircraft Hangars,” by Timothy J. Lindsey, provides an overview of the general features that appraisers take into consideration in the valuation and analysis of aircraft hangars. The article examines characteristics that affect value such as: location, structural systems, hangar features, property rights and leases tied to fuel consumption. In a subsequent article which will appear in the Spring 2008 issue of The Appraisal Journal, Lindsey will illustrate specific appraisal techniques for valuing aircraft hangars using the characteristics described in the current article.
“The Appraisal of Water Rights: Their Nature and Transferability,” by Steven J. Herzog, MAI, identifies the types of water rights and ownership interests that may be the subject of an appraisal. The author stresses the importance of the need for appraisers to familiarize themselves with the rules of each state in which water rights exist, as there is variability among these states. This article is part one of a two-part article; an article in the next issue of The Appraisal Journal will address the appropriate appraisal methodology to use in valuing water rights.
In “Valuing Limited-Service Hotels: A Pragmatic Framework from a Broker’s Perspective,” Byron B. Hinton, MAI, bridges the gap between the theoretical framework typically used for valuing hotels and the real world motivations and behaviors of buyers and sellers in transactions involving limited-service hotels. Hinton discusses both objective and subjective factors that ultimately influence a purchaser’s willingness to acquire a property and concludes that by considering these factors a hotel appraiser can approximate the thinking of active buyers and sellers in the limited-service hotel marketplace.
In “Industrial Incubators; Key Characteristics That Impact Value,” the authors Donald Sonneman and David J. Yerke, MAI, describe the various characteristics that distinguish multi-tenant industrial incubator properties from other types of warehouse properties. The authors note that small industrial warehouse users have different needs and priorities that influence design and appraisal analysis. They conclude that an awareness of the key characteristics that differentiate the industrial incubator category from other industrial property types will assist appraisers in selecting proper comparable properties and making appropriate adjustments.
Rounding out the articles on special property types is “Apartment Market Analysis,” by Richard L. Parli. MAI, who presents a six-step process that lays out a road map to guide the market analysis. The purpose of the market analysis is to investigate the marketability and feasibility of a property’s potential uses, which ultimately leads to a conclusion of the property’s highest and best use. The article includes a case study illustrating how a market analysis is conducted for existing apartment properties.
The Appraisal Journal, published quarterly by the Appraisal Institute, serves as a forum for advancing appraisal theories and practices. Containing articles, columns and letters written by experienced appraisers and educators, The Appraisal Journal presents ideas, concepts and analytical techniques to be considered. Each issue offers alternative valuation methods for serious thinkers seeking creative solutions to appraisal problems, appealing to appraisers, educators and other real estate professionals.
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