Below is an article from the latest National Valbridge newsletter featuring our Director of Multifamily Valuation, Daniel Kann, MAI: Sherlock Holmes could very well have become an income-property appraiser. Valbridge professionals act as detectives with every market and feasibility study they perform. Most often the mystery is to deduce the highest and best use of a property; in other words, the use that would produce the highest net return on investment. Valbridge's Daniel Kann, MAI, a multifamily valuation expert, undertook such an exercise when he performed a market and feasibility study for the owner of a 14-acre suburban site. His analysis began by determining what was physically possible for the site, what uses were permitted under zoning laws and deed restrictions, and what was economically feasible. Then his examination got really interesting. To estimate demand for different potential product types, he analyzed employment and income data, other demographic information, and existing and future inventory and supply in various stages of production. He studied market occupancy, projected absorption, and estimated sales prices and asking rents for various multifamily options. Daniel and his team evaluated 31 comparable properties in addition to the overall market, and analyzed the option of holding the site for future development versus developing it immediately. The market and feasibility study concluded that the area in which the site is located could not support additional rental housing. In fact, depending on the timing of additional phases at other developments, the market could become even more overbuilt — with increased vacancy, declining asking rents and additional concessions necessary to capture tenants. Rather, the analysis revealed, a for-sale residential use would be maximally profitable. The target market: professionals and empty nesters without children who have a higher median household income. The highest-return on investment type: a patio/villa home project. Daniel’s study illuminated even more, including the optimal mix of floor plans and unit sizes. Sherlock Holmes couldn’t have produced a more revealing result.
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Another year is coming to an end and Thanksgiving is only days away. We have been reflecting on this incredible year and the many ways we are thankful. One of the biggest things we are thankful for is you, our clients and friends of the firm. Thank you for trusting in our firm, and for allowing us to be part of your decision making. Without you our success for over 37 years simply would not have been possible. Because of you this year we were able to share our knowledge with numerous student and professional groups; share our story through social media; launch a Kansas City quarterly market statistics newsletter; serve in our industry and the Kansas City community; celebrate small business; enhance our culture; welcome a new MAI; and recognize one of our own as an Industrial Emerging Leader.
THANK YOU for fueling our passion for commercial real estate and our drive to continually improve our craft. Most of all THANK YOU for the impact you have in each and every one of our lives, and for letting us be a part of yours. We wish you a very happy Thanksgiving spent with friends and family! Sincerely, All of us at Valbridge Property Advisors |
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