A Charming and Challenging Appraisal

Appraising a Downtown Suburban Historic Development

When it comes to an appraisal, the word “challenging” may overwhelm some, but not the team at Argianas and Associates. We love nothing more than a complicated assignment, especially when it is disguised as a charming development in our own backyard.

This complex appraisal came in the form of a quaint downtown suburban historic development. The property was the first “planned shopping center” in the United States and is listed in the National Register of Historic Places. The development was bursting with character but had one feature that was less than charming when it came to a standard appraisal process.

A picture-perfect property

With a unique property comes unique features, and this one was no different – a unique mixed-use property sat nestled in a Central Business District. Seven buildings are sited on three separate parcels of land, separated by a central park area with a fountain owned by the City. At the time of its construction, this property was truly a one-of-a-kind development in that area. So one-of-a-kind that there was not one single comparable property. A fact that was mind-boggling to an appraiser, but only increased the appeal of the property to tenants. The Argianas team knew that their expert ability to find and manage data would be the key to success in this appraisal.

Charmed by strategy

The Argianas team chose to tackle this appraisal with the Income Capitalization Approach, a key method for valuing income-producing properties of all types. Tenant contract terms and conditions were collected including details as to individual lease agreements and historical operating expense statements. We also measured market demand, with all of our findings formulated and entered into Argus software. From there, a microanalysis of the property was completed, resulting in own income and expenses projections for the property over the next five years. Finally, we processed our Cash Flow Before Debt Service (EBITA) into a single present value figure.

Although initially considered a challenge, the Argianas team simplified their efforts on a step-by-step / multi-tiered process. The process began with obtaining public records and identifying additional sources, interviewing market buyers and sellers, analyzing demographic information and analyzing the market. With meticulous analyzation, the lending institution knew they could trust the Argianas team with this challenging – yet charming – assignment.

If you’ve got a challenging assignment and are looking for experts to take it on, call Argianas & Associates at 630.390.0113. We’ll use our skills and knowledge to give you an accurate appraisal you can trust. Learn more about commercial appraisals and join our mailing list to receive our e-newsletter featuring case studies, industry events and news.