Assessors are challenged by the need to develop Fee Simple values for property that sells based on leases in place at the time of sale.

This workshop looks at background, terminology, and appraisal concepts for Fee Simple valuation, as well as suggested appraisal practice and possible solutions to resolving common issues that surface in the valuation of leased commercial property.

The workshop material includes information on the varying perspectives for Fee Simple in appraisal practice, USPAP, mass appraisal concepts and appraisal challenges. Build-to-suit properties and sale-leaseback transactions are also discussed. Several examples of effective rent and proper handling of tenant improvements are incorporated in the material.

Adjustment methods are provided for conditions of sale and property rights that allow the appraiser to arrive at an analysis price for commercial property sales that can be used to calibrate mass appraisal models, as well as apply in the three approaches to value.

The workshop includes three short case studies that involve 1031 exchanges, long-term/credit leases, and leased fee/leasehold property rights.