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Parker relied on the replacement-cost, market-data, and
capitalization-of-earnings approaches in appraising the value of
the Property at $420,000 as of March 31, 1987. In appraising the
Property at $490,000, Aguilar used the replacement-cost and
capitalization-of-earnings approaches, but opted against using
the market-data approach. Petitioners maintain that their
experts have established a reasonable range of values for the
Property and that the purchase price of $425,000 falls within
that range.
Parker's report was prepared in August 1994. For the
replacement-cost approach, Parker estimated the value of the
underlying land to be $125,000 (rounded), using 6 vacant land
sales as comparables ($1.40 per square foot times 89,380 square
feet). He then estimated the 1987 reproduction cost new of the
buildings and other improvements at $610,616. Accrued
depreciation (incurable physical deterioration and external
obsolescence) was estimated at $303,673, for an estimated
depreciated cost of the improvements of $306,943. Thus, his
estimate of value under this approach was $432,000 (rounded).
For the market-data approach, Parker analyzed 3 sales of
automobile agencies in Lafayette. The sales were adjusted to
account for physical characteristics. He estimated the value to
be $420,000 under this approach.
Finally, using 4 lease comparables (including leases of
Improved Sales Nos. 1, 2, and 3 entered into after the purchases
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