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vicinity of the Redwood City Fox. All the sales, except for one,
occurred prior to the valuation date of December 31, 1986. The
selected unit of comparison was price paid per square foot of
gross building area. The elements of comparison included seller
financing, date of sale, building size, physical condition,
parking, and location. After adjustment, Mitten/Reynolds
concluded that the value for the retail/office component of the
Redwood City Fox was $110.00 per gross square foot, for an
indicated value under the comparable sales approach of
$2,000,000, rounded (18,489 square feet times $110.00 per square
foot).
In summary, under the comparable sales approach,
Mitten/Reynolds concluded that the value of the Redwood City Fox
was $3,300,000 for the theater, $2,000,000, for the
retail/office, for a total of $5,300,000.
5. Income Capitalization--Retail/Office
Mitten/Reynolds concluded that the income capitalization
method was not appropriate for the theater.
With respect to the retail/office space, Mitten/Reynolds
examined the lease rates for 8 properties (lease comparables).
Seven of the lease comparables were rented on a fully serviced27
basis, while only one was on an unserviced basis. Consequently,
Mitten/Reynolds estimated the market rent of the Redwood City Fox
27 “Fully serviced”, in the context of commercial leases, is
one in which the landlord pays all operating expenses.
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