Real Estate Valuation & Consulting Services

Vintage movie theater’s fate uncertain after appraisal

Theater

A suburban Illinois movie theater built in 1952 is a far cry from today’s state-of-the-art digital multiplexes and may be better off on the cutting-room floor, says Chuck Argianas, MAI, president of Argianas & Associates Inc.

Argianas recommends the theater be redeveloped based on HBU considerations. Bringing the building up to code could be prohibitively expensive, however.

“It hasn’t been updated for many years,” Argianas says. “The facility and the equipment are obsolete by today’s standards. Our firm has appraised dozens of theaters like this across the United States, and it’s clear that it would take a lot of work to make it economically viable.”

The original theater featured a single screen and was later modified for two screens. Its vintage reel-to-reel film equipment and sound system limit the type of movies the theater can screen. The concession stand is also dated and insufficient for modern needs. Meanwhile, the restrooms are too small, the roof needs to be replaced, the mechanical systems are in poor shape, and the building lacks modern fire protection.

“You’re not going to make much money with only two screens, and small venues are not easily adaptable for alternative uses,” Argianas says. “That said, we’ve seen creative operators with reasonable visionary skills find ways to put these properties back into service.”

It’s unclear what the theater’s fate is. Market demand, demographics and cultural trends will play a starring role in the outcome. 

Bank counts on the seasoned team at Argianas & Associates

Chicago from Downtown Evanston

When a large commercial bank needed immediate valuations for 16 properties, it sought help from industry veteran Argianas & Associates Inc. The firm not only completed the work with limited information, but it also met the bank’s tight deadline.

Limited-scope appraisals are best left to established, licensed commercial property appraisers who have the knowledge and experience needed to provide reasonable and credible property values. Anyone else may make costly miscalculations.

“Banks need to hire the best, most experienced people possible because they understand market nuances,” says Chuck Argianas, MAI, president of Argianas & Associates. “Our staff has years of experience and there is no learning curve. 

“Many appraisers won’t take on this type of work due to the margin for error working with limited information,” he continues. “It’s understood, however, that you’re doing the best with what you’ve got.”

The properties included medical buildings, industrial warehouses, car dealerships, fast-food restaurants, rental apartments and a church. The appraisers at Argianas & Associates took “highest and best use,” or “HBU,” into account, assessing the most profitable use for the properties as vacant and as improved.

“Economics, zoning changes, demand and other factors affect HBU,” Argianas says. “Properties developed for a particular use may be worth more if they’re repurposed.”

With Argianas & Associates at the helm, the bank’s executives knew they could take the appraisals to the bank – literally. 

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