1. 9 Site Valuation Vacant land Vacant site
Appraiser can estimate value of:
Vacant land
Raw land with no improvements
Vacant site
Land that has been improved by addition of utilities and is suitable for building

2. Reasons for Separate Site Valuation
Cost approach
Assessments and taxation
Condemnation appraisals
Income capitalization approach
Highest and best use study

3. Highest and Best Use Physically possible Legally permitted
Limited by site’s size, shape, topography
Legally permitted
Consideration of zoning, building codes, hazardous areas, CC&Rs
Financially feasible
Present or anticipated market conditions
Maximally productive
Highest financial return and property price

4. Highest and Best Use Interim use
Consideration of present use in light of anticipated property use due to change in market conditions or development potential (change of zoning)
Vacant land, or treated as if vacant, if already improved
Land treated as improved, but with changed use, such as a warehouse converted to loft apartments

5. Site Data Identification Analysis Highest and best use
Physical features
Size, location, utilities, improvements, soil composition, flood/earthquake zone
Zoning
Easements, rights-of-way, CC&Rs

6. Environmental Concerns
Federal regulations cover
Water
Air
Toxic substances
Endangered species
Wetlands
Commercial real estate may require
Environmental site assessment (ESA) or
Environmental property assessment (EPA)

7. Environmental Concerns
Brownfields Abandoned or underutilized property that may or may not be contaminated Properties require environmental assessment, cleanup, and redevelopment Information on Brownfields Federal Partnership Action Agenda can be obtained from EPA epa.gov/brownfields

8. Methods of Site Valuation
Sales comparison method
Sales of similar vacant sites are analyzed and compared, with adjustments to sales prices resulting in estimate of value of subject site
Allocation method
Ratio of land value to building value typical of area is applied to total value of subject property to derive land value of subject

9. Methods of Site Valuation (cont.)
Abstraction method (extraction method)
Cost of all improvements is subtracted from sales price of property to find land value
Subdivision development method
Costs of developing and subdividing parcel of land are subtracted from total expected sales prices of the separate sites to determine the value of the undivided raw land

10. Methods of Site Valuation (cont.)
Ground rent capitalization method
Annual income from ground lease is divided by capitalization rate to indicate market value of site
Land residual method
Net income earned by the building is deducted from total income to derive net income from land and net income from land is divided by capitalization rate to derive land value