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of the Redwood City Fox indicated by the comparable sales
approach was $135.00 per gross square foot, for a total of
$3,288,330, which they rounded to $3,300,000 (24,358 square feet
times $135.00 per square foot).
3. Replacement Cost Approach--Retail/Office
Under the replacement cost approach for the retail/office
space, Mitten/Reynolds started with the cost estimate contained
in the Adamson report, which they adjusted by adding non-
construction costs and an entrepreneurial incentive. Based on
their determination that the physical condition of the
retail/office space was “very good”, Mitten and Reynold estimated
all forms of depreciation to amount to 25 percent of the total
replacement cost. Under the replacement cost approach,
Mitten/Reynolds valued the retail/office space at $1,800,000
(rounded), computed as follows:
Total Construction Cost $1,587,040
Non-Construction Items
Design 111,093
Permits, etc. 50,000
Occupancy 40,000
Financing 106,199
Out of Pocket Replacement Cost1,894,332
Entrepreneurial Incentive (5%)94,717
Total Replacement Cost 1,989,049
Depreciation (25%) 497,262
Depreciated Replacement Cost 1,491,787
Land Value Allocation 309,000
Value $1,800,787
4. Comparable Sales--Retail/Office
Under the comparable sales approach, Mitten/Reynolds chose
the sales of 6 small commercial properties located in the
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