- 53 -
See Amerada Hess Corp. v. Commissioner, 517 F.2d 75, 83 (3d Cir.
1975), revg. on other grounds White Farm Equip. Co. v. Commissioner,
61 T.C. 189 (1973). The fact that a seller may aim to sell shares of
various classes of stock issued by a single corporation does not
necessarily mean that blockage will occur when the total shares to be
sold are greater than the demand for shares of one class but less
than the demand for shares of all classes. The same rationale
applies to the sale of real estate. The mere fact that many parcels
of real estate are marketed contemporaneously does not mean that a
discount for market absorption applies to any or all parcels. Vacant
land, for example, is different than residential rental property,
which, in turn, is different than commercial rental property. The
market for vacant land, therefore, may not be affected directly by
whether multiple parcels of residential and/or commercial rental
property are also on the market. The same is not necessarily true
when the parcels of real estate are the same general type, for
example, multiple parcels of commercial rental property. Properties
of the same general type will compete against each other when they
are in the same market. To the extent that the market cannot absorb
all parcels of one type of property, the value for a single parcel as
set by the market without competition from similar parcels will
usually be driven down.17 See Amerada Hess Corp. v. Commissioner,
17 In certain cases, the price may be driven up because the
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