Uniqueness from the point of view of the appraiser
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“UNIQUENESS” FROM THE POINT OF VIEW OF THE APPRAISER”. Henry J. Wise, MAI, CBA, BVAL. Bowers v. Fulton County. “Owner was entitled to recover damage to all species of property, including real and personal, corporeal and incorporeal property.”

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Uniqueness from the point of view of the appraiser


Henry J. Wise, MAI, CBA, BVAL

Pritchett, Ball & Wise, Inc.

Bowers v fulton county
Bowers v. Fulton County

  • “Owner was entitled to recover damage to all species of property, including real and personal, corporeal and incorporeal property.”

  • Court requires the property be “unique” before a business owner could have an opportunity to be compensated for the damage to his business.

Pritchett, Ball & Wise, Inc.

Department of transportation v 2 734 acres of land
Department of Transportation v. 2.734 Acres of Land

  • Where the real estate itself has a unique value to the owner such that fair market value does not represent just and adequate compensation. This issue of uniqueness applies whether or not there is damage to a business.

  • When the property is generally not of a type generally bought or sold in the open market.

  • Where the entire property has been taken or when the business cannot continue to operate on the remaining property, and when the property must be duplicated for the business to survive and if there is no substantially comparable property within the area.

Pritchett, Ball & Wise, Inc.

Problems of understanding
Problems of Understanding

  • Closely associated with the fact that market value is typically the required standard of value

  • Value-in-exchange is typically the premise of value that the condemning authority appraisers, the attorneys and the condemning authorities best understand and market value is the value on which they focus their attention.

Pritchett, Ball & Wise, Inc.

Market value means
Market Value Means

  • Willing buyer and seller, no duress

  • Economic motivation

  • Both parties equally well informed and/or well advised

  • Reasonable exposure to the market

  • Transaction for cash or terms equivalent to cash

Pritchett, Ball & Wise, Inc.


  • Value-in-use is the premise of value and investment value is the standard of value that the business owner – condemnee focuses on.

  • Investment value is the value of a specific property to a specific owner, and is based on the owner’s criteria, not the criteria of the impersonal market.

Pritchett, Ball & Wise, Inc.


  • Why is it that for some property types properties are not typically bought and sold as real estate (as most of us understand the concept)?

  • Why may the property be worth more to this specific owner/tenant than to the market of typically motivated buyers and sellers?

  • Why is it that a property can not be duplicated in its immediate market area?

Pritchett, Ball & Wise, Inc.

Building i reception area
Building I- Reception Area

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Reception area continued
Reception Area, Continued

Pritchett, Ball & Wise, Inc.

Class b office space
Class B Office Space

  • Plain vanilla, functional space

  • If building were to be condemned, necessary to relocate

  • Inconvenience

  • Expense

  • Business not uniquely related to our real estate, therefore, business not likely to be damaged due to relocation

Pritchett, Ball & Wise, Inc.

Compare with flight safety international
Compare with Flight Safety, International

  • FSI space was 15’ high on the outside, but 25’ high on the inside

  • FSI had dug out 10’ deep pits under about 8,000 sq. ft. of their space to install their flight simulators

  • A pilot can be certified to fly the MD80 and L1011 without ever having been in the actual airplane

Pritchett, Ball & Wise, Inc.

Simulators in building
Simulators in Building

Pritchett, Ball & Wise, Inc.

World s biggest computer game
World’s Biggest computer Game

Pritchett, Ball & Wise, Inc.

Compare with fsi continued
Compare with FSI, continued

  • FAA must certify the installation of the simulators and just the approval process takes three months.

  • Each day that a single simulator was out-of-service, the bottom line loss to the business was in excess of $80,000.

Pritchett, Ball & Wise, Inc.

The convenience store c store
The Convenience Store (C-Store)

  • C-Store an appraiser’s nightmare

  • Appraiser has only three analytical tools

    • Income Approach

    • Sales Comparison (market) Approach

    • Cost Approach

Pritchett, Ball & Wise, Inc.

C store rent
C-store “Rent”

  • A function of the relationship between the jobber or wholesaler (brand distributor) and the retailer based on the volume of fuel sales.

  • Often “rent” is controlled by the Petroleum Marketing Practices Act (PMPA).

  • Only rarely can an appraiser show evidence that there is a third-party relationship between the owner of the real estate and the operator of the C-store business.

  • Hard to develop a reliable income approach to valuing the C-store real estate.

Pritchett, Ball & Wise, Inc.

Sales comparison or market approach
Sales Comparison or Market Approach

  • Sales present several problems

  • If sold as an “open store” there is almost always an element of business value in the transaction.

  • If sold as a closed store, it is hard to know if the real property still meets the unique characteristics of a C-store.

  • Hard to find appropriate unit of comparison for a C-store.

Pritchett, Ball & Wise, Inc.

A co branded c store
A Co-branded C-store

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Typical 2 700 sf store behind canopy
Typical 2,700 SF Store behind Canopy

Pritchett, Ball & Wise, Inc.

900 sf kiosk store in center of canopy
900 SF Kiosk Store in Center of Canopy

Pritchett, Ball & Wise, Inc.

Assume each sold for 1 000 000 what do you use as a unit of comparison

  • 4,200 SF Store, $ 238/SF

  • 2,700 SF Store, $ 370/SF

  • 900 SF Store, $1,111/SF

Pritchett, Ball & Wise, Inc.

Unique relationship between the real estate and the business bp c store site selection criteria
Unique Relationship Between the Real Estate and the Business; BP C-Store Site Selection Criteria:

  • Size, the site must have between 1.2 and 1.5 acres of land

  • The accessible traffic count must be in excess of 30,000 cars per day (cpd), 24-hour count.

  • The preferred site is at an intersection, past the light and on the right to avoid cuing problems.

  • There should be a daytime population of 10,000.

  • Prefer sites that are some distance from a hypermarketer (Kroger, Cosco, etc.)

Pritchett, Ball & Wise, Inc.

Questions Business; BP C-Store Site Selection Criteria:

  • How likely are these criteria to be met by multiple sites at the same intersection?

  • How often is it that the C-store can relocate to an equally desirable alternative facility in its same market area?

Pritchett, Ball & Wise, Inc.

Fast food restaurants
Fast Food Restaurants Business; BP C-Store Site Selection Criteria:

  • Fast Food Restaurants are easier real estate appraisals than are C-stores

  • Landlord and Tenant are more often different parties, so an income approach is more likely to be possible

  • $/SF is more likely to be a useful unit of comparison, so a sales comparisonapproach is more likely to be possible

Pritchett, Ball & Wise, Inc.

But the street and the site are very closely tied


    • Traffic count of 20,000 cpd accessible to the site

    • Mix of office and retail in the immediate trade area to make up a sufficient daytime population during the morning and noon day-parts (each worker = about 5 households)

    • Average household income of $30,000

    • 30,000 sf site for Mrs. Winners, 1-acre for Arby’s.

Pritchett, Ball & Wise, Inc.

Examples of business uniquely related to the real estate
Examples of Business Uniquely Related to the Real Estate Business; BP C-Store Site Selection Criteria:

  • Veterinary Practice

  • Nursing Home

Pritchett, Ball & Wise, Inc.

Summary Business; BP C-Store Site Selection Criteria:

  • The issue of uniqueness is a function of the occupant’s special needs for the real property that the business occupies.

  • Just and Adequate Compensation must Recognize the investment value standard of value and the value-in-use premise of value, not fair market value as the standard of value and value-in-exchange as the premise of value.

Pritchett, Ball & Wise, Inc.