Part B – Problem Solving

Subject Property

The subject property has a modern and efficient commodity storage facility that has had recent renovations (14 years actual age; 10 years estimated effective age). Based on current market data, the current land value is $560,000. Replacement Cost New of the facility improvement is $2,620,000.

Market Data

Following is information about two local properties with similar commodity storage facility improvements that have sold recently. The properties had no other improvements.

Sale 1 sold recently for $1,830,000. Land value at the time of sale was $700,000. RCN

(Replacement Cost New) of the commodity storage facility improvements at the time of sale was $2,580,000. Actual age of the facility improvements at the time of sale was 12 years; the facility had some deferred maintenance and the estimated effective age was

14 years.

Sale 2 sold recently for $1,720,000. Land value at the time of sale was $440,000. RCN (Replacement Cost New) of the commodity storage facility improvements at the time of sale was $2,130,000. Actual age and effective age of the facility improvements at the time of sale was 10 years.

B-1. (4 Points each) What is the contributory value of the storage facility improvements for each sale property?

B-1.1 Sale 1: $-------

B-1.2: Sale 2: $-------

B-2. (4 Points each) What is the total accrued depreciation ($) for the storage facility improvements on each sale property?

B-2.1 Sale 1: $----

B-2.2 Sale 2: $------

B-3. (4 Points each) What is the annual depreciation ($/yr.) for the storage facility improvements on each sale property? (Round to the nearest whole dollar)

B-3.1 Sale 1: $-----

B-3.2 Sale 2: $------

B-4. (4 Points each) What is the annual depreciation rate (%/year) for the storage facility improvements on each sale property? (Round to 1 decimal place; i.e., for your answer 1.23% =1.2% and 0.0123 = 1.2%)

B-4.1 Sale 1:------%

B-4.2 Sale 2:------%

B-5. (4 Points) Based on the annual depreciation rates indicated in the previous problem, what is the appropriate annual depreciation rate (%) for the subject property storage facility improvements? (Round to 1 decimal place)

---------------%

B-6. (4 Points) Based on the depreciation rate conclusion from the previous problem, what is the indicated total economic life (years) for these improvements? (Round to the nearest whole year)

-------------Years

B-7. (4 Points) What is the annual depreciation ($/yr.) for the subject property storage facility improvements? (Round to the nearest whole dollar)

$--------------

B-8. (4 Points) What is the total accrued depreciation ($) for the subject property improvements? (Round to the nearest whole dollar)

$--------------

B-9. (4 Points) What is the depreciated value (same as contributory value) for the subject property improvements? (Round to the nearest whole dollar)

$----------------------

B-10. (4 Points) What is the indicated value of the subject property by the Cost Approach? (Round to the nearest $10,000)

$ ------------------