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resort and that the most likely buyer would be a single developer
or investor, who would continue to operate it as a resort.
Messrs. Monger and Griffin valued the Port Ludlow community in
the aggregate as opposed to in bulk (with the exception of the
developed lots). In other words, they summed the values of the
individual components, rather than determining the value of the
individual components as if offered and sold on the market to a
single buyer in one transaction.
In estimating the value of the developed lots, Messrs.
Monger and Griffin utilized a sales comparison, or market,
approach to arrive at the value of each lot. They then adjusted
the aggregate of these values to arrive at a bulk value. The
bulk value reflects the subject’s value if sold as a single
entity to one buyer in one transaction, and it reflects the
purchaser’s acceptance of the marketing risk and holding costs.
Messrs. Monger and Griffin assumed an absorption rate of 5 lots
per year for the first 2 years increasing gradually up to 25 lots
per year (for an overall average of 15 lots per year). They
deducted selling and holding costs equal to approximately 18.5
percent of sales from the aggregate value of the lots. Then, a
total discount of 22 percent (i.e., 12 percent attributable to
the time value of money and 10 percent expected profit) was
applied to arrive at the bulk value of the lots. Messrs. Monger
and Griffin arrived at a final bulk value of $400,000 for the
developed lots.
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