Further study:

Subject Property and Program:
Our subject property is located under the I –5 overpass on Eastlake Avenue East.  The location is fairly noisy with a moderate view of the lake.  The entire site sits on a relatively steep hill sloping towards the water, and is comparable to the James St., I – 5 overpass on First Hill.  Residential housing and apartments surround the site and are of moderate to fair quality.  All sites that were selected on Eastlake have direct access to the Jackson Metro bus lines that run from downtown up to the Northlake area. Traffic on Eastlake Ave. is moderate during business hours and congested during rush hours.
 
The intended building for the site is a mixed-use office and retail space in a four-story building with 30 underground parking places.   The building will contain approximately 30,975 NSF of space with about 3,000 NSF of that space designated as retail.  The building is to be of median quality with moderate fixtures and finishes.  The exterior will have a bRick or curtain wall finish.  It is expected that the top two floors of office space facing west will have a good view of the lake.  Landscaping will be added to conform with the parks and corporate spaces surrounding the site. 

Analysis of Comparables:
The data was adjusted to reflect the relative percentage difference in quality between the comps and the subject.  The subject’s base rating was a 1 (100%) with the various comps having better or worse characteristics based on, location, view, age, quality, parking interior, and usage.  The average of all the ratings for each comp was taken and used to adjust the comp’s NSF sale price to a normalized value, with the subject being normal.

Reconciliation of Three Estimate Values:

Capitalized Income Approach                                                   $4,473,380

Replacement Cost Approach                                                    $4,955,263

Comparable Sales Approach                                                    $4,491,730

 

We believe the capitalized income and comparable sales approaches are the most accurate.  The capitalized income already has a conservative cap. rate figured in while the comparable sales uses actual sales prices from market sales.  The replacement cost is the least accurate since construction costs of the building do not directly correlate with the value of the building, or what people will pay for it.

Therefore, we have chosen the $4,480,000 as our estimate of the appraisal value.  This value lands within a range created by capitalized income and comparable sales.