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and the problem is compounded if depreciation exists in more than
one form (e.g., physical, functional, and economic obsolescence).
The income approach estimates value based upon future
benefits (cash-flow) to be derived from the ownership of a
property. This approach is most applicable to income-producing-
type properties as it involves estimating gross income and then
deducting estimated vacancy, losses, and expenses to compute net
income. This net income is processed into an indication of value
by using several different methods and techniques to determine
the proper capitalization and/or discount rate.
In their reports, both experts used all three methods to
value the Litton building. In their reports, both experts used
the sales comparison method to value the 11.656 acres. In his
report, Mr. Cantrell used a "development approach", which is
equivalent to the income approach, to value the parcel of 30.3
acres. In his report, Dr. Friedman used the sales comparison
method to value the parcel of 30.3 acres. In their reports, both
experts used the sales comparison method and the cost approach to
value the Bates Center. Both experts agree that the income
approach was not applicable to determining the value of the Bates
Center.
The sales comparison method was the methodology most
important to both experts in valuing the gifted Litton property.
The sales comparison method was the methodology most important to
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