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Without considering the Jacobs lease, Mansbach estimated the
following values for the retail/office component of the Redwood
City Fox:
Comparable Sales Approach: $983,850
Income Capitalization Approach: $930,000
Mansbach considered the comparable sales approach to be "weakened
by the lack of directly comparable properties, as none of the
properties had both commercial and office income potential, nor a
location within the immediate neighborhood." Consequently,
placing more emphasis on the income capitalization approach,
Mansbach estimated the value of the retail/office component of
the Redwood City Fox, as of December 31, 1986, and without
consideration of the Jacobs lease, to be $950,000.
Mansbach also determined a value for the retail/office
component of the Redwood City Fox under the income capitalization
approach incorporating the provisions of the Jacobs lease.
Mansbach found that the rentable area leased by Jacobs was 9,071
square feet. Mansbach excluded the 2,226 square feet of space on
the mezzanine floor from his calculations. Utilizing both his
estimated market rent and the contract rent paid by Jacobs,
Mansbach estimated potential gross income to be $71,019. From
this figure he again deducted 5 percent for a vacancy and
collection loss.
With respect to expenses, Mansbach noted that the Jacobs
lease was triple net, whereby Jacobs was responsible for his pro
rata share of expenses. Mansbach determined that the Jacobs
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