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Appraisers should give highest and best use the same degree of attention that they give the measurement of value for special purpose properties. Some properties have unrealized potential for other uses in addition to the special purpose. The maximally productive criterion of highest and best use demands the consideration of alternative uses in a valuation assignment. Appraisers should account for the concepts of value in use, and uses and contribution in their analysis of the highest and best use of a special purpose property. Integrating unrealized potential uses with the special purpose will result in a more complete evaluation of approximate true market value.
Real estate appraisers continually face the challenge of valuing unique property characteristics. One example is the valuation of a special purpose property. The purpose of this paper is to illustrate an appraisal methodology used to value a special purpose property which has an unrealized potential for another use. To illustrate some important considerations, we offer a sample appraisal for a parcel of improvements and land which is the current location for a radio station facility and its 200-foot broadcast tower. While the appraisal of a broadcast tower is hardly unique, the appraisal problem is that the property is located in a business district on a main thoroughfare and has frontal access. Thus, in addition to its current use, the property may also be utilized for another commercial purpose. The valuation calls for integrating the concepts of highest and best use, special purpose properties, contribution, and value in use. Uses and value in use should receive the same analytical effort as the measurement of value and description of the property. A close look at physical adaptability and economic demand is warranted.
PROPERTY CLASSIFICATION
The first step in the valuation process is to identify whether the use of the site for housing a radio station broadcast antenna tower represents a highest and best use of the site. The four criteria for highest and best use are legally permissible, physically possible, financially feasible, and maximally productive.
For this property, the criterion of legally permissible carries a special meaning. Construction of a broadcast tower requires approval of agencies such as the Federal Aviation Administration (to avoid conflicts with airport flight patterns). The approvals create...