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4. Comparable Sales Approach--Retail/Office
Under the comparable sales method for the retail/office
space, Carneghi looked at 5 sales of small office and commercial
buildings, 4 of which were located in Redwood City and 1 of which
was located in nearby Menlo Park. Using the net area square
footage as the unit of measurement, Carneghi found that the
comparables indicate a range of sales prices between $73.17 and
$144.55 per square foot. Carneghi adjusted the comparable sales
prices on the basis of date of sale, building age, size (both lot
and gross building area), quality, location, parking, conditions
of sale, and economic factors. Carneghi concluded that a unit
value of $90.00 per square foot was indicated for the
retail/office space of the Redwood City Fox. With 16,291 square
feet at $90.00 a square foot, Carneghi valued the retail/office
space under the comparable sales method at $1,470,000. This
value did not take into account the Jacobs lease.
5. Income Capitalization Method--Retail/Office Space
To calculate annual gross potential income under the income
capitalization approach, Carneghi used the income generated by
Jacobs’ lease (what he termed “contract income”) of the West
retail space (both ground floor and mezzanine) and the Second and
Third floor office spaces, to which he added his estimate of
market rent for the East retail space (both ground floor and
mezzanine). Carneghi did not use in his calculations the income
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