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  1. MicroSolve Commercial Edgar Clodfelter APAS, LLC Chris Miele NEMRC

  2. MicroSolve Commercial • Workshop Aims to Give some Practical Understanding -Not a class on using MVS Commercial system. • Commercial System is a Black Box from M&S -Installation and setup is important -Simple and easy to use -Keep it simple -Approach is similar to calculator method

  3. MicroSolve Commercial System Overview Marshall & Swift Commercial Estimator • Relational database consisting of a series of tables linked by the Parcel ID. • Allows a record to have as many components as needed.

  4. MicroSolve Commercial • Parcel Data come primarily from NEMRC System. • Zip Code Determines Local Multiplier Used by M&S • Neighborhood is used for Land Calculations

  5. MicroSolve Commercial • Land Calculations in Commercial same as Residential • Site Improvements in Commercial same as Residential

  6. MicroSolve Commercial • Section Data describes the Building/Buildings area(s). • There can be many uses or occupancies within a section.

  7. MicroSolve Commercial • Components describe the characteristics of the structure.

  8. MicroSolve Commercial • Additions allow for additional value for items not included in the Cost system.

  9. MicroSolve Commercial • Basement information allows for additional value on portions of the building below grade.

  10. MicroSolve Commercial • Final Values are stored in the Valuation section.

  11. MicroSolve Commercial • Multiple Pictures can be linked to each record.

  12. MicroSolve Commercial • Information about the property can be stored in the Notes section.

  13. MicroSolve Commercial • Records are moved into Commercial CAMA System by selecting Cama File C R - Residential C - Commercial O – Condominium N - No Cama File • Three separate databases

  14. MicroSolve Commercial • Caution: Just because a property is classified or categorized as commercial does not mean it should be valued in the commercial system.

  15. MicroSolve Commercial

  16. MicroSolve Commercial

  17. MicroSolve Commercial

  18. MicroSolve Commercial • Need to decide if building is really a commercial style. • Houses converted to Offices • Garages • Low quality steel buildings • Are there considerations making a building suited to residential database? • Outbuildings - garages, sheds • Concerns about excessive value • Need for greater control of value • Multiple dwellings/buildings

  19. MicroSolve Commercial Three Approaches to Value 1. Cost Approach • Indication of value that is the sum of estimated land value and estimated depreciated cost of the building and other improvements. • V = LV + IV (CN – D) 2. Market Approach • Valuation procedure based on prices paid in actual market transactions used to determine most probable sale price of property being appraised. • Income Approach • Converts anticipated benefits (dollars) to be derived from ownership into a value estimate.

  20. MicroSolve Commercial Cost Approach and Value • Replacement Cost • Total cost of building construction required to: • Replace the subject building. • Substitute with like or equal utility. • Using current standards of materials and design • Reproduction Cost • Total cost of building construction to replace with actual replica of salient characteristics or components. • Newer buildings replacement approximates reproduction. • Use segregated cost method for older buildings • Actual replacement may not be available or desirable. • Principle of Substitution • Economic principle that the price of a commodity tends to be no higher than the price of a substitute having equal utility without undue delay.

  21. MicroSolve Commercial Cost Approach and Value • Marshall and Swift Cost Approach is based on end costs of buildings to the buyer or owner. • Costs are averages of detailed estimates of actual costs breakdowns and total end costs of actual construction projects. – Completed from surveys of construction jobs. • Elements of cost include: • Direct Costs (labor, materials, equipment, fees and charges) • Indirect Costs (overhead, permits, financing, selling expenses) • Profit.

  22. MicroSolve Commercial Cost Approach and Value • Cost Approach • Based on cost of production. • Applicable for new or proposed construction. • Applicable for unique or special purpose properties. • Represents the highest and best use of the site. • Cost is an avenue to market value. • The goal is not Cost, but Market

  23. MicroSolve Commercial Marshall and Swift Concepts

  24. MicroSolve Commercial Marshall and Swift Methods and Terms • Calculator Method – (Used with commercial estimator) • Based on concept of cost per increment of floor area. • Areas or buildings are defined by a section or multiple sections. • Sections are defined by the use of the building, or occupancy. Example – Restaurant, Health Club, Bank, Office, Service Station. • Within each occupancy are sqft refinements or components. Example –Exterior Wall, Heating/Cooling, Elevator, Mezzanine. • Buildings are classified by Occupancy, and grouped into Sections. • Segregated Method – (Not used with commercial estimator) • Computes total cost by successively adding the costs of all components of the building. • The method is specific and detailed.

  25. MicroSolve Commercial • Section Information

  26. MicroSolve Commercial SECTION: BUILDING DATA • Building Data consists of: • Size and shape data, including the total floor area, number of stories and perimeter or shape. •  Age data, including effective age, base date and a special age adjustment value. •  Depreciation data.  • Occupancy data, including the building's occupancy (use), class of construction, story height and cost rank (quality). The following factors are included: Total Floor Area (sq. ft.) * Stories per Section *  Stories per Building   Perimeter (linear feet) Shape * -Use either Perimeter or Shape. Base Date – Base date of cost tables Building Adj.  A dollar amount reflecting unusual conditions. Fireproof A logical field: enter T or F. Year Built Effective Age (years) * Use either YB or Effective Age. Depreciation % Physical Functional Economic * Required Field 

  27. MicroSolve Commercial Section • Single Section:Can be one building with one section. Example:

  28. MicroSolve Commercial Section

  29. MicroSolve Commercial Section • Section Example • One Building - One Section • Small Satellite Bank Building • Simple Example • One Section • One Occupancy-Bank • Two Additions

  30. MicroSolve Commercial Section • Section Example - 2 • One Building - Two Sections • Office Building and Apartment • Example Breakout • Two Sections • Three Occupancies- Offices, Apt. • Basement Finish • Alternative Breakout • Three Sections • Four Occupancies

  31. MicroSolve Commercial Section • Section Example - 3 • Two Buildings – Two Sections on same Property • Manufacturing Building • Restaurant Building with Retail and apartment. • More Complex Example • Two Sections, Two Buildings • Section 1 - 2 Occupancies • Section 2 – 3 Occupancies

  32. Section Fields MicroSolve Commercial Total Floor Area (Required) • The total floor area of a section is the total area on all floors based on the building's exterior dimensions. • Example: The entry for 24,525 square feet is: Total Floor Area (sq. ft.) 24525 No Commas

  33. Section Fields MicroSolve Commercial • Number of Stories • Estimate with One Section: If estimate has only one section, enter its number of stories in “Number of Stories: Section” only. • Example: The entry for a building with 3 stories, entered as a single section, is: Number of Stories: Section _3___ Building ____

  34. MicroSolve Commercial • Vertically Sectioned Building: If you vertically section a building, enter the number of stories in each section under “Number of Stories: Section.” • Example: A building that is part 6 stories and part 3 stories can be vertically sectioned as follows: • The entries for this building are: Section 1 Story/Section __6__ Building ____ Section 2: Story/Section __3__ Building ____

  35. MicroSolve Commercial • Horizontally Section Buildings: If you horizontally section a building, enter the number of stories in each section under “Number of Stories: Section,” and the total number of stories in the building under “Number of Stories: Building.” • Example: A building that has a one-story bank on the first floor (20' story height), and five stories of offices on the second through sixth stories (10' story height), is sectioned horizontally as follows: • The entries for the Building are: Section 1: Stories/Section __1__ Building __6__ Section 2: Stories/ Section __5__Building __6__

  36. MicroSolve Commercial Perimeter or Shape • Perimeter: The total linear feet of wall that encloses the floor area (based on exterior dimensions). • If the perimeter varies in a multistory building, enter the average perimeter. • Can enter perimeter or shape. • It is best to enter the perimeter. • Example: If a 10-story building has a perimeter of 660 feet on the first floor and 500 feet on the other 9 floors, the average perimeter is: Shape: If you do not know the perimeter, you can enter one of the following shapes:

  37. Depreciation MicroSolve Commercial • Depreciation (determined by the system) is calculated based on age or effective age, rank, occupancy and class. • There is no field for Condition. • This calculation does not include either abnormal or excessive functional depreciation, or any external obsolescence. • System documentation regarding base date and effective age has changed. • Base date is now the base date of the cost tables in use. • Definitions • Depreciation is loss in value due to any cause. Depreciation is divided into three general categories, as discussed below. • 1. Physical depreciation is loss in value due to physical deterioration. • Curable – Short lived items (Flooring, Paint) • Incurable – Long lived items, require major construction to replace (Foundations, Heating systems) • 2. Functional obsolescence is loss in value due to lack of utility or desirability of part or all of the property. - Many older buildings suffer from functional obsolescence. - Lack of Elevators, Adequate Wiring • 3. External, locational or economic obsolescence is loss in value due to causes outside the property and independent of it.

  38. MicroSolve Commercial Depreciation • Effective age of a property is its age as compared with other properties performing like functions. • It is the actual age less the age which has been taken off by updating the building through improvements or structural reconstruction, and removing functional inadequacies. • It is the age reflective of the true remaining life for the property, after consideration of the typical life expectancy of buildings of its class and its usage. • It is a matter of judgment, taking all factors, current and those anticipated, into consideration. M&S Life Expectancy Tables

  39. Depreciation MicroSolve Commercial • Example • Retail/Office Building • Class C , Average Quality • Typical Life = 50 Years • Electrical System Replaced 10 Yrs. Ago • Heating system replaced 5 Yrs. Ago • Roof repaired 8 Yrs. Ago • Interior renovations 10 Yrs. Ago. • Estimated Remaining Life = 40 Yrs Typical Building Life = 50 Years Estimated Remaining = 40 Years Effective Age = 10 Years • What other form of obsolescence is associated with this building? • Compare the two buildings Utility.

  40. MicroSolve Commercial Depreciation

  41. Depreciation MicroSolve Commercial Examples • If Year Built or Effective Age is used Depreciation is called “Physical & Functional” • If Overall Depr. Is used Depreciation is called “Physical & Functional” • If “Phys Depr.” is used Depreciation is called “Physical” • If use “Physical” and “Functional” both are displayed.

  42. MicroSolve Commercial • Occupancy Information

  43. MicroSolve Commercial • OCCUPANCY • Occupancy, or building use : identifies the use or uses of the building as it was originally designed. • For a building without an exact occupancy description choose the most similar type. • If the designed use and the actual use differ, the design generally determines the cost used in calculating the basic replacement cost. Therefore, use the occupancy of the designed use to determine costs. • Example – Curves (health clubs/exercise facility) are frequently • located in converted retail space.

  44. MicroSolve Commercial • OCCUPANCY • Must enter at least one occupancy in each section of the building. • Must enter the percentage of the total floor area for each occupancy. • Total percentage for all occupancies in the section must be 100%. • Can enter as many occupancies in each section as you need.

  45. MicroSolve Commercial Occupancy-related factors: (all required):

  46. MicroSolve Commercial Occupancy Codes in MicroSolve and M&S More than 150

  47. MicroSolve Commercial %

  48. MicroSolve Commercial Class • Class of Construction • Divides buildings into basic cost groups by type of framing • (supporting columns and beams), walls, floor and roof structures • and fireproofing. • A - Fireproof Structural Steel Frame • B - Reinforced Concrete Frame • C – Masonry Bearing Walls • D - Wood or Steel Stud Framed Exterior Walls • S - Metal Frame Walls

  49. MicroSolve Commercial • CLASS A: FIREPROOF STRUCTURAL STEEL FRAME • Fireproofed structural steel frame, which may be welded, bolted or riveted together. • The fireproofing may be masonry, poured concrete, plaster, sprayed fiber or any other method, which gives a high fire-resistance rating. • Floor and roof are normally reinforced concrete on steel decking or formed slabs resting on the frame or poured to become integral with it. • Exterior walls are curtain walls of masonry, concrete, steel studs and stucco, or one of the many types of panels of metal, glass, masonry or concrete. • Interior partitions frequently are of masonry or gypsum block, although many movable and lightweight steel partitions are used.

  50. MicroSolve Commercial • CLASS B: REINFORCED CONCRETE FRAME • Reinforced concrete frame in which the columns and beams can be either formed or precast concrete. • Class B buildings are fire-resistant structures. • Floors and roofs are formed or precast concrete slabs. • Exterior walls are masonry or reinforced concrete curtain walls or any of the many types of wall panels of concrete, metal, glass or stone. In some class B buildings the walls may be partially load bearing. • Interior partitions are often masonry, reinforced concrete or gypsum block. Many lightweight and movable partitions are used where structural walls are not needed.