APPRAISING RETAIL PROPERTIES IN THE “AMAZON JUNGLEâ€

Franz H. Ross and Sergio S. Lo Presti

The Valuation Journal, 2019, vol. 14, issue 1, 31-59

Abstract: Changing buying patterns for retail goods and the impact of Amazon and other e-commerce have made retail perhaps the riskiest property type. Predicting which properties will “go dark†necessitates thorough market analysis. For owner-occupied properties, appraisers should ideally analyze the store’s financial statements but at a minimum analyze historical revenues. In appraising hotels, nursing homes, convenience stores, and other property types, revenues are the primary measure of captured demand, and going concern appraisals are the accepted practice. The profession should be consistent in using the financial information of the going concern (at the store level) particularly in analyzing freestanding retail properties, and to the extent possible, all retail properties. This will improve the reliability of the highest and best use analysis and the forecast of durability of the current use. In this article, the “durability of the current use†relates to the likelihood of vacancy under the current highest and best use of the real estate, not the brand name occupying the space, with vacancy caused by deficiencies in location, functional aspects, or demand.

JEL-codes: L81 L85 R30 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:vaj:journl:v:14:y:2019:i:1:p:31-59

Access Statistics for this article

The Valuation Journal is currently edited by Ion Anghel

More articles in The Valuation Journal from The National Association of Authorized Romanian Valuers Contact information at EDIRC.
Bibliographic data for series maintained by Stefan Alexandru ().