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2,894 Sr $3.10 $8,971 $107,657 <br />Vacancy and Collection Loss <br />Single -tenant buildings are typically valued assuming no vacancy or collection <br />loss. However, from the perspective of an investor, a stabilized vacancy and collection <br />loss within the historical range is usually applied, assuming a five- to 10 -year holding <br />period. An estimated stabilized vacancy and collection loss of 3% is considered <br />appropriate for the direct capitalization analysis. <br />Expense Analysis <br />The subject property is an owner -user office building. Typically, leases for similar <br />buildings in this market are written on a triple -net lease basis, where the tenant is <br />responsible for operating expenses for the property including: taxes, insurance, utilities, <br />common area maintenance, building repairs and maintenance. The owner is <br />responsible for management, miscellaneous expenses, and administrative costs. The <br />capital value analysis has been analyzed on a typical triple -net basis. <br />Overall Capitalization Rate <br />A review of sales and listings of commercial properties found that reported OARS <br />reflect rates from 4.3% to 5.5%. These sales are considered the best evidence of an <br />appropriate capitalization rate for the subject property. <br />75L-29 <br />