In Defense of the Land Residual Theory and the Absence of a Business Value Component for Retail Property

Norman G. Miller (), Steven T. Jones and Stephen E. Roulac
Additional contact information
Norman G. Miller: Department of Finance University of Cincinnati Cincinnati, Ohio 45221-0195, http://www.cba.uc.edu/dept/fin/
Steven T. Jones: University of Cincinnati Lindner Hall Cincinnati, Ohio 45221-0195, http://www.cba.uc.edu/dept/fin/
Stephen E. Roulac: The Roulac Group Larkspur Landing Circle, Suite 125 Larkspur, California 94939, http://www.roulac.com/

Journal of Real Estate Research, 1995, vol. 10, issue 2, pages 203-216

Abstract: The temptation is strong for arguing that property values can be broken down into land, improvements, and business value, as only land and improvements are subject to property tax. As sympathetic as the authors are to this motivation, the notion of a long-run business value component for retail property is refuted and the land residual value theory reasserted, while at the same time admitting the possibility of first owner entrepreneurial or development-based value creation. It is argued that any excess property productivity will eventually become attached to the land, and last that option values are an important aspect of land values that would be affected when suggesting that the appropriate value of a given property is the cost of substituting adjacent property.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1995
View list of references

Downloads: (external link)
http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol10n02/v10p203.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:jre:issued:v:10:n:2:1995:p:203-216

Ordering information: This journal article can be ordered from
Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
http://aux.zicklin.b ... u/jrer/about/get.htm

Access Statistics for this article

Journal of Real Estate Research is edited by Dr. Ko Wang

More articles in Journal of Real Estate Research from American Real Estate Society
Address: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Series data maintained by JRER Graduate Assistant/Webmaster ().