16 Appraising Partial Interests

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Presentation transcript:

16 Appraising Partial Interests Condominiums Planned unit developments Fannie Mae Form 1073: Individual Condominium Unit Appraisal Report

Partial Interests Time-share projects Estate interest or right of use Manufactured homes Other forms of ownership Tenants in common (TICs) Joint tenants

Lease Interests Leased fee Leasehold estate Ground lease Sandwich lease

Lease Provisions Gross lease Net lease Triple-net lease Percentage lease Excess rent and deficit rent

Lease Provisions (cont.) Escalator clause Renewal options Tenant improvements Tax-stop clause Expense-stop clause Purchase option

Leased Fee and Leasehold Valuations Leased fee interest Value of leased fee interest is found by applying annuity factor to NOI to find present worth of net income, then applying reversion factor to estimated land value, and adding the two figures

Leased Fee and Leasehold Valuations Leasehold interest Value of leasehold interest is found by subtracting scheduled rent from market rent to find excess rent, then discounting present worth of excess rent

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