Reference no: EM132500933
Problem: You are an appraiser and have been assigned to determine the land value of a site, as vacant. The relevant information is as follows:
Property Type NOI Cap Rate Construction Cost
Office $10,000,000 8% $100,000,000
Apartment $5,000,000 6% $60,000,000
Retail $4,500,000 9% $40,000,000
Warehouse $3,000,000 6% $25,000,000
The site is zoned for Apartment and Retail use. What is the Highest and Best use of the site and what is the residual value of the land? Is it worth the effort to attempt to have the land re-zoned for office use?