MicroSolve Commercial

MicroSolve Commercial
Edgar Clodfelter APAS, LLC Chris Miele NEMRC

Workshop Aims to Give some Practical Understanding -Not a class on using MVS Commercial system. Commercial System is a Black Box from M&S -Installation and setup is important -Simple and easy to use -Keep it simple -Approach is similar to calculator method

System Overview Marshall & Swift Commercial Estimator Relational database consisting of a series of tables linked by the Parcel ID. Allows a record to have as many components as needed.

Parcel Data come primarily from NEMRC System. Zip Code Determines Local Multiplier Used by M&S Neighborhood is used for Land Calculations

Land Calculations in Commercial same as Residential Site Improvements in Commercial same as Residential

Section Data describes the Building/Buildings area(s). There can be many uses or occupancies within a section.

Components describe the characteristics of the structure.

Additions allow for additional value for items not included in the Cost system.

Basement information allows for additional value on portions of the building below grade.

Final Values are stored in the Valuation section.

Multiple Pictures can be linked to each record.

Information about the property can be stored in the Notes section.

Records are moved into Commercial CAMA System by selecting Cama File C R - Residential C - Commercial O – Condominium N - No Cama File Three separate databases

Caution: Just because a property is classified or categorized as commercial does not mean it should be valued in the commercial system.

Need to decide if building is really a commercial style. Houses converted to Offices Garages Low quality steel buildings Are there considerations making a building suited to residential database? Outbuildings - garages, sheds Concerns about excessive value Need for greater control of value Multiple dwellings/buildings

Three Approaches to Value 1. Cost Approach Indication of value that is the sum of estimated land value and estimated depreciated cost of the building and other improvements. V = LV + IV (CN – D) 2. Market Approach Valuation procedure based on prices paid in actual market transactions used to determine most probable sale price of property being appraised. Income Approach Converts anticipated benefits (dollars) to be derived from ownership into a value estimate.

Cost Approach and Value Replacement Cost Total cost of building construction required to: Replace the subject building. Substitute with like or equal utility. Using current standards of materials and design Reproduction Cost Total cost of building construction to replace with actual replica of salient characteristics or components. Newer buildings replacement approximates reproduction. Use segregated cost method for older buildings Actual replacement may not be available or desirable. Principle of Substitution Economic principle that the price of a commodity tends to be no higher than the price of a substitute having equal utility without undue delay.

Cost Approach and Value Marshall and Swift Cost Approach is based on end costs of buildings to the buyer or owner. Costs are averages of detailed estimates of actual costs breakdowns and total end costs of actual construction projects. – Completed from surveys of construction jobs. Elements of cost include: Direct Costs (labor, materials, equipment, fees and charges) Indirect Costs (overhead, permits, financing, selling expenses) Profit.

Cost Approach and Value Cost Approach Based on cost of production. Applicable for new or proposed construction. Applicable for unique or special purpose properties. Represents the highest and best use of the site. Cost is an avenue to market value. The goal is not Cost, but Market

Marshall and Swift Concepts

Marshall and Swift Methods and Terms Calculator Method – (Used with commercial estimator) Based on concept of cost per increment of floor area. Areas or buildings are defined by a section or multiple sections. Sections are defined by the use of the building, or occupancy. Example – Restaurant, Health Club, Bank, Office, Service Station. Within each occupancy are sqft refinements or components. Example – Exterior Wall, Heating/Cooling, Elevator, Mezzanine. Buildings are classified by Occupancy, and grouped into Sections. Segregated Method – (Not used with commercial estimator) Computes total cost by successively adding the costs of all components of the building. The method is specific and detailed.

Section Information

The following factors are included: Total Floor Area (sq. ft.) * Stories per Section * Stories per Building Perimeter (linear feet) Shape * -Use either Perimeter or Shape. Base Date – Base date of cost tables Building Adj. A dollar amount reflecting unusual conditions. Fireproof A logical field: enter T or F. Year Built Effective Age (years) * Use either YB or Effective Age. Depreciation % Physical Functional Economic * Required Field SECTION: BUILDING DATA Building Data consists of: Size and shape data, including the total floor area, number of stories and perimeter or shape. Age data, including effective age, base date and a special age adjustment value. Depreciation data. Occupancy data, including the building's occupancy (use), class of construction, story height and cost rank (quality).

Section Single Section: Can be one building with one section. Example:

Section

Section Section Example One Building - One Section Small Satellite Bank Building Simple Example One Section One Occupancy-Bank Two Additions

Section Section Example - 2 One Building - Two Sections Office Building and Apartment Example Breakout Two Sections Three Occupancies- Offices, Apt. Basement Finish Alternative Breakout Three Sections Four Occupancies

Section Section Example - 3 Two Buildings – Two Sections on same Property Manufacturing Building Restaurant Building with Retail and apartment. More Complex Example Two Sections, Two Buildings Section Occupancies Section 2 – 3 Occupancies

Section Fields Total Floor Area (Required) The total floor area of a section is the total area on all floors based on the building's exterior dimensions. Example: The entry for 24,525 square feet is: Total Floor Area (sq. ft.) 24525 No Commas

Section Fields Number of Stories Estimate with One Section: If estimate has only one section, enter its number of stories in “Number of Stories: Section” only. Example: The entry for a building with 3 stories, entered as a single section, is: Number of Stories: Section _3___ Building ____

Vertically Sectioned Building: If you vertically section a building, enter the number of stories in each section under “Number of Stories: Section.” Example: A building that is part 6 stories and part 3 stories can be vertically sectioned as follows: The entries for this building are: Section 1 Story/Section __6__ Building ____ Section 2: Story/Section __3__ Building ____

Horizontally Section Buildings: If you horizontally section a building, enter the number of stories in each section under “Number of Stories: Section,” and the total number of stories in the building under “Number of Stories: Building.” Example: A building that has a one-story bank on the first floor (20' story height), and five stories of offices on the second through sixth stories (10' story height), is sectioned horizontally as follows: The entries for the Building are: Section 1: Stories/Section __1__ Building __6__ Section 2: Stories/ Section __5__Building __6__

Perimeter or Shape Perimeter: The total linear feet of wall that encloses the floor area (based on exterior dimensions). If the perimeter varies in a multistory building, enter the average perimeter. Can enter perimeter or shape. It is best to enter the perimeter. Example: If a 10-story building has a perimeter of 660 feet on the first floor and 500 feet on the other 9 floors, the average perimeter is: Shape: If you do not know the perimeter, you can enter one of the following shapes: 1=Square 2=Rectangular or Slightly Irregular 3=Irregular 4=Very Irregular

Depreciation Depreciation (determined by the system) is calculated based on age or effective age, rank, occupancy and class. There is no field for Condition. This calculation does not include either abnormal or excessive functional depreciation, or any external obsolescence. System documentation regarding base date and effective age has changed. Base date is now the base date of the cost tables in use. Definitions Depreciation is loss in value due to any cause. Depreciation is divided into three general categories, as discussed below. 1. Physical depreciation is loss in value due to physical deterioration. Curable – Short lived items (Flooring, Paint) Incurable – Long lived items, require major construction to replace (Foundations, Heating systems) 2. Functional obsolescence is loss in value due to lack of utility or desirability of part or all of the property. - Many older buildings suffer from functional obsolescence. - Lack of Elevators, Adequate Wiring 3. External, locational or economic obsolescence is loss in value due to causes outside the property and independent of it.

Depreciation Effective age of a property is its age as compared with other properties performing like functions. It is the actual age less the age which has been taken off by updating the building through improvements or structural reconstruction, and removing functional inadequacies. It is the age reflective of the true remaining life for the property, after consideration of the typical life expectancy of buildings of its class and its usage. It is a matter of judgment, taking all factors, current and those anticipated, into consideration. M&S Life Expectancy Tables Occupancy Class A B C D S Apartments 60 55 50 Home for Elderly 45 40 Market – Low Cost -- 35 30 Warehouse

Depreciation Example Retail/Office Building Class C , Average Quality Typical Life = 50 Years Electrical System Replaced 10 Yrs. Ago Heating system replaced 5 Yrs. Ago Roof repaired 8 Yrs. Ago Interior renovations 10 Yrs. Ago. Estimated Remaining Life = 40 Yrs Typical Building Life = 50 Years Estimated Remaining = 40 Years Effective Age = 10 Years What other form of obsolescence is associated with this building? Compare the two buildings Utility.

Depreciation Field Entered Uses Lookup Year Built Effective Age Yes Overall Depr No Age No Physical Depr

Depreciation Examples If Year Built or Effective Age is used Depreciation is called “Physical & Functional” If Overall Depr. Is used Depreciation is called “Physical & Functional” If “Phys Depr.” is used Depreciation is called “Physical” If use “Physical” and “Functional” both are displayed.

Occupancy Information

OCCUPANCY Occupancy, or building use : identifies the use or uses of the building as it was originally designed. For a building without an exact occupancy description choose the most similar type. If the designed use and the actual use differ, the design generally determines the cost used in calculating the basic replacement cost. Therefore, use the occupancy of the designed use to determine costs. Example – Curves (health clubs/exercise facility) are frequently located in converted retail space.

OCCUPANCY Must enter at least one occupancy in each section of the building. Must enter the percentage of the total floor area for each occupancy. Total percentage for all occupancies in the section must be 100%. Can enter as many occupancies in each section as you need. Occ Code Occ Name % Class Height Rank 50 Retail Store 40 D 10 2 34 Laundromat 60 14

Occupancy-related factors: (all required): Occupancy Type Select from the categorical list. Occupancy Percent Total of all occupancies in a section must be 100% Occupancy Class A, B, C, D, S Occupancy Rank Quality rating: 1-4 with 1 being low and 4 being excellent. Graduated ranks (e.g. 3.5) are possible. A low extreme of 0.5 and a high extreme of 5.0 are permitted. Occupancy Story Ht In feet.

Occupancy Codes in MicroSolve and M&S More than 150 CAMA Name M&S Code CAMA Name M&S Code Code Name Val NoData 51 ArtCrftsBl 355 1 Apartment 300 52 ClassrmsEl 356 2 Armory 301 53 CommonsEle 357 3 Auditorium 302 54 GymEleSecS 358 4 AutoShowRm 303 55 LectClssrm 359 5 Bank 304 56 MediaCntrE 360 6 Barn 305 57 ManualArts 361 7 BowlingAll 306 58 MultipurpB 362 8 ChurchWSun 308 59 PhysEdBldg 363 9 Church 309 60 SciClassrm 364 10 CityClub 310 61 EleSchoolE 365 11 Clubhouse 311 62 JrHghSchoo 366 12 Convalesce 313 63 ArtsCrftsB 367 13 CountryClu 314 64 ClassrmsCo 368 14 Creamery 315 65 CommonsCol 369 15 Dairy 316 66 GymCollege 370 16 DairySales 317 67 LectHallCo 371 17 DeptStore 318 68 LibrryColl 372 18 DiscountSt 319 69 TechTradeB 373 19 Dispensary 320 70 374 20 Dormitory 321 71 375 21 FireStnSta 322 72 SciBldgCol 376 22 FratBldg 323 73 CollegeEnt 377 23 FratHse 324 74 Stable 378 24 ServGrgObs 325 75 TheatersLi 379 25 StorGarage 326 76 TheatersCi 380 26 GovBldg 327 77 VetrnryHos 381 27 StorHangar 328 78 TobaccoBar 383 28 HangarMain 329 79 BarberShop 384 29 HomeForThe 330 80 MiniWareho 386 30 Hospital 331 81 TransWareh 387 31 Hotel 332 82 UndrgrndPa 388 32 IndManufac 334 83 EquipStorB 389 33 CorrFacili 335 84 LumberStor 390 34 Laundromat 336 85 MaterlStor 391

Occ Code Occ Name % Class Height Rank 50 Retail Store 40 D 10 2 34 Laundromat 60 14 % Occupancy Percent Example: Total of all occupancies in a section must be 100% Total SQFT = 7,000 Retail = 4,200 Laundromat = 2,800 Laundromat Percent = 2,800/7,000 = .40 or 40% Retail = 100 – 40 = 60%

Occ Code Occ Name % Class Height Rank 50 Retail Store 40 D 10 2 34 Laundromat 60 14 Class Class of Construction Divides buildings into basic cost groups by type of framing (supporting columns and beams), walls, floor and roof structures and fireproofing. A - Fireproof Structural Steel Frame B - Reinforced Concrete Frame C – Masonry Bearing Walls D - Wood or Steel Stud Framed Exterior Walls S - Metal Frame Walls

CLASS A: FIREPROOF STRUCTURAL STEEL FRAME Fireproofed structural steel frame, which may be welded, bolted or riveted together. The fireproofing may be masonry, poured concrete, plaster, sprayed fiber or any other method, which gives a high fire-resistance rating. Floor and roof are normally reinforced concrete on steel decking or formed slabs resting on the frame or poured to become integral with it. Exterior walls are curtain walls of masonry, concrete, steel studs and stucco, or one of the many types of panels of metal, glass, masonry or concrete. Interior partitions frequently are of masonry or gypsum block, although many movable and lightweight steel partitions are used.

CLASS B: REINFORCED CONCRETE FRAME Reinforced concrete frame in which the columns and beams can be either formed or precast concrete. Class B buildings are fire-resistant structures. Floors and roofs are formed or precast concrete slabs. Exterior walls are masonry or reinforced concrete curtain walls or any of the many types of wall panels of concrete, metal, glass or stone. In some class B buildings the walls may be partially load bearing. Interior partitions are often masonry, reinforced concrete or gypsum block. Many lightweight and movable partitions are used where structural walls are not needed.

CLASS C: MASONRY BEARING WALLS Masonry or reinforced concrete construction. The walls may be load-bearing, i.e., supporting roof and upper floor loads, or nonbearing with concrete, steel or wood columns, bents or arches supporting the load. Wood or steel joists or trusses support upper floors and roofs. Ground floors may be concrete slabs. Upper floors may be of concrete plank, steel deck or wood. Bearing walls are frequently strengthened by concrete bond beams and pilasters. Class C buildings are not fire-resistant structures.

CLASS D: WOOD- OR STEEL-FRAMED EXTERIOR WALLS Class D buildings are characterized by combustible construction. Exterior walls may be made up of closely spaced wood or steel studs as in the case of a typical frame house. Exterior walls may be wood siding, shingles, stucco, brick or stone veneer or some other type of material. Floors and roofs are supported on wood or steel joists or trusses. The floor may be a concrete slab on the ground.

CLASS S: METAL FRAME AND WALLS Incombustible construction and prefabricated structural members. They are not fire-resistant buildings. Exterior walls may be steel studs or an open-steel-skeleton frame with exterior coverings of prefabricated panels or sheet siding. Upper floors and roof are supported on steel joists or beams. Ground floors are typically concrete slabs.

Story Height Occ Code Occ Name % Class Height Rank 50 Retail Store 40 D 10 2 34 Laundromat 60 14 Height Story height is the vertical distance from the top of one floor to the top of the next floor. In a one-story building, measure story height from the floor surface to the roof eave. (Do not include parapets (extensions of the wall above the roofline) in story height.) Must enter a story height for each occupancy. (Different from manual)

Story Height Examples When using a single section, if the story heights vary in a multistory building, you can do any of the following: Example 1: One section – Two Occupancies – Different Heights Occ Code Occ Name % Class Height Rank 44 Post Office 33 D 18 2 5 Bank 67 10

Story Height Examples - Averaging Example 2: One section – One Occupancy – Different Heights Three Story Building – 1st Floor 18 Foot - 2nd 3rd Floors 10 Foot Each Occ Code Occ Name % Class Height Rank 5 Bank 100 D 12.67 2

Story Height Examples Example 3: One section – One Occupancy – Different Heights For unfinished attics, include half of the increased height of the attic area when computing average story height. Two Story Building – 10 Foot each Floor - 8 Foot Attic Area

Rank Occ Code Occ Name % Class Height Rank 50 Retail Store 40 D 10 2 34 Laundromat 60 14 1.5 Rank Rank refers to Quality . The quality scales against which most buildings and their parts must be rated are: Rank 1 - LOW COST Rank 2 – AVERAGE Rank 3 – GOOD Rank 4 – EXCELLENT Split grades are allowed

Rank Low (Rank 1) - These tend to be very plain buildings that conform to minimum building code requirements. Interiors are plain with little attention given to detail or finish. Typically, there are minimum mechanical and low-cost finishes throughout. Average (Rank 2) - These buildings are the most commonly found and meet building code requirements. There is some ornamentation on the exterior with interiors having some trim items. Lighting and plumbing are adequate to service the occupants of the building. Good (Rank 3) - These are generally well designed buildings. Exterior walls usually have a mix of ornamental finishes. Interior walls are nicely finished and there are good quality floor covers. Lighting and plumbing include better quality fixtures. Excellent (Rank 4) - Usually, these buildings are specially designed, have high-cost materials and exhibit excellent workmanship. Both exteriors and interiors have custom and ornamental features. Lighting and plumbing include high-cost fixtures.

Examples Using MVS Commercial Manual Examples Using MVS Commercial

Components

Components Building components include exterior walls, heating and cooling, elevators, sprinkler systems, fire alarms, mezzanines, balconies. In Marshall & Swift tables, many types of buildings (or occupancies) are assumed to have such components, and their cost is already included in the square foot rate. It is not necessary to enter components unless greater control, accuracy, or description is necessary. However, it is a good idea to break down components: Demonstrates a proper inspection was completed. Gives greater control for complex buildings. Underlying assumptions knowledge is limited.

Components Wall Type Select from the categorical list. Wall Percent Percentages must total 100. Wall Units Enter area in square feet. Wall Rank Range is from a low of 1 to a high of 4. Wall Units of Measure Choose Square Feet. Wall Other Units Leave blank. Wall Depreciation Enter a percentage if desired. Heat/Cool Type Heat/Cool Percent Heat/Cool Units Heat/Cool Rank Heat/Cool UOM Heat/Cool Other Units Heat/Cool Depreciation Component Type Select from the categorical list. See details in Part 2. Component Percent Percentages must total 100. Component Units Enter area in square feet or count. Component Rank Range is from a low of 1 to a high of 4. Component UOM Choose Square Feet or Units (i.e. count). Component Other Units See details in Part 2. Component Deprec Enter a percentage if desired.

Components – Wall Type Components: ExteriorWall Type Percent Units Grade UOM Depreciation 1 2 Type: Brick 1-Solid 3-Brick w/ Block Back Block: 8-Concrete 12- Textured 17 – Glass Concrete: 18-Formed 20- Precast Stone: 23- Rubble Veneer Pre-Engineered: 43- Metal Sandwich Panel Stud Walls: 56-Wood 57- Plywood 58-Hardboard 60- Metal 61-Vinyl 62-Shingles 65-Stucco 67-Brick Veneer 68- Block Veneer 72- Stresskin Panel Single Wall 73-Rustic Log 74-Metal on Wood 75-Metal Steel Grade (Rank): 1-Low 2- Average 3- Good 4- Excellent Units of Measure: 1- Square Feet 2- Units Units: Square Feet or Number Wall Type Select from the categorical list. Wall Percent Percentages must total 100. Wall Units Enter area in square feet. Not needed for Wall Type Wall Rank Range is from a low of 1 to a high of 4. Wall Units of Measure Choose Square Feet. Wall Other Units Leave blank. Wall Depreciation Enter a percentage if desired.

Wall Definitions Descriptions for exterior walls: (See back section of manual) MASONRY WALLS – CAMA Pre-Code MN (M&S Codes ) These walls are constructed entirely of masonry units (or concrete) which are bonded together with mortar or some other type of cementing material. CURTAIN WALLS – CAMA Pre-Code CW (M&S Codes ) These are non-bearing exterior walls supported by the structural frame of the building. These walls carry no load other than their own weight. The primary function of these walls is to protect the interior of the building from the weather. PRE‑ENGINEERED WALLS – CAMA Pre-Code PE (M&S Codes ) These walls are pre‑fabricated panels constructed with two sheets or “skins” (interior and exterior) bonded to a core material. STUD WALLS – CAMA Pre-Code SW (M&S Codes ) These walls are of wood or steel stud bearing wall construction. - When stresskin sandwich panel replaces the stud framing, use additive component Number 891. SINGLE WALL CONSTRUCTION – CAMA Pre-Code SN (M&S Codes ) Refers to a wall enclosure that is typically applied over an open skeleton prefabricated metal or wood pole framed building.

Components - Heating/Cooling Heating/Cooling Type Percent Units Grade UOM Depreciation 1 2 Type: 1-Electric 2-Elec. Wall 3-Forced Air 4-Hot Water 5-Hot Water Rad. 6-Space Heat 7-Steam 8-Steam No Boiler 9-Ventilation 10-Wall Furnace 11-Package Unit 12-Warm Cool Air 13-Hot Chill Water 14-Heat Pump 15-Floor Furnace 16-Ind Thru Wall 17-Complete HVAC 18- EvapCool 19-Refrig Cool 20- No HVAC Heat/Cool Type Select from the categorical list. Heat/Cool Percent Percentages must total 100.* Heat/Cool Units Enter area in square feet.* Heat/Cool Rank Range is from a low of 1 to a high of 4. Heat/Cool UOM Choose Square Feet. Heat/Cool Other Units Leave blank. Heat/Cool Depreciation Enter a percentage if desired. *Enter Units in SQFT OR Percent of Heating Area The commercial manual has a good description of each type.

Components - Other ComponentType Percent Units Grade UOM Depreciation 1 2 3 4 Type: 1-Elevator by Area 2-Passenger Elevator 3-Freight Elevator 5-Sprinklers 6-Dry Sprinklers 7- Wet Sprinklers 8-Mezzanine 9-Display Mezzanine 10-Office Mezzanine 11-Open Mezzanine 12- Storage Mezzanine 13-Malls Open 14-Malls Covered 15-Malls Enclosed 16-Malls Elevator 17-Balcony 18-Fire Alarm Component Type Select from the categorical list. See details in Part 2. Component Percent Percentages must total 100. Component Units Enter area in square feet or count. Component Rank Range is from a low of 1 to a high of 4. Component UOM Choose Square Feet or Units (i.e. count). Component Other Units See details in Part 2. Component Deprec Enter a percentage if desired.

Components – Summary Chart Component Type Units % HVAC Square feet of floor area served Percentage of total floor area served Exterior Walls N/A Percentage of total wall area Elevators (Square Foot Method) Elevators (Count Method) Number of elevators Sprinklers Mezzanines Square feet of mezzanine area Balconies Square feet of balcony area Malls Square feet of mall area Fire Alarm Systems Land Value (Site Value) Dollar amount Site Improvements

Additions Additions allow the inclusion of items to the report that are not available in the M&S CAMA program.

Additions Report Headings indicates where to print the addition in the report, using one of the following codes: Basic Basic Structure Cost - Depreciated Super Superstructure Cost - Depreciated Bsmnt Basement Cost Extra Extras Depr Depreciation (prints as negative) Tot Bldg Total Value Added to Building – Not Depreciated Examples: Porches or Decks Tanks Canopy Storage Buildings

Basement : Basement information parallels that in the Section, Occupancy, and Components for the building as a whole. Basements frequently have separate uses and occupancies. Basement section allows for specifying specific uses. Basement: Basement Levels:______________________ Basement Perimeter: ______________________ Basement Shape: ______________________ 1-Appx Sq 2- Sl Irr 3- Irregular 4- Very Irregular Basement Occupancy Class Type Area Depth Grade Depreciation 1 2 Occupancy: See Codes Class: A,B,C,D,S Type: 1-Finished 2- Semi Finished 3-Unfinished 4-Display 5-Office 6-Parking 7-Residential BasementComponent Type Units Grade UOM Depreciation 1 2

Basement Basement Levels Enter number of levels. Basement Perimeter Basement Shape R One or the other is required if levels are specified. Basement Occupancy Types are the same as for sections. Bsmt Occ Class Class – A, B, C, D, or S – need not be the same as section class, though usually it is. Bsmt Occ Type Options are: Finished, Resident Units, Parking, Semifinished, Display, Laboratory, Unfinished, Storage, Classroom Bsmt Occ Area In square feet. Bsmt Occ Depth In feet – parallel to story height. Bsmt Occ Rank Quality rating: 1-4 with 1 being low and 4 being excellent. Graduated ranks (e.g. 3.5) are possible. A low extreme of 0.5 and a high extreme of 5.0 are permitted. Bsmt Occ Deprec. Depreciation is not required. Bsmt Component Type Options as in above-ground section components; heat/cool is not available as an option. Bsmt Comp Percent Percentages must total 100. Bsmt Comp Units Enter square feet. Bsmt Comp Rank Bsmt Comp Other UOM Choose Square Feet or Units (i.e. count). Bsmt Comp Other Units See details in Part 2. Bsmt Comp Deprec. Enter a percentage.

Basement – Cost Report 05 Cost Value = 1,850,000

Examples

Examples Example Retail/Apartments Story Brick Building 1 Section – 2 Occupancies – Unfinished Basement 10,557 SQFT

Examples Example Light Manufacturing Story Metal Building with Office 1 Section – 2 Occupancies -with Components and Additions 16,637 SQFT

Examples Example Motel Story Wood Structure 1 Section - 2 Occupancies 3,200 SQFT

Examples Example New Office Building Story Brick Building 1 Section – 1 Occupancy – Elevator and Sprinklers 52,824 SQFT

Examples Example Fitness Center Story Precast Panels 1 Section – 2 Occupancies – Finished Basement Area 25,154 SQFT

Examples Example Warehouse Building with Office Story 1 Section – 1 Occupancy – Runs Income System 18,512 SQFT

Examples Example Manufacturing Plant Buildings 3 Sections – 4 Occupancies 63,256 SQFT

Examples Example Lumber Yard Main Buildings with 7 Lumber Sheds 3 Sections Occupancies - 56,642 SQFT

Examples Example Marriott Hotel House 1 Sections – 1 Occupancy – 3 Additions SQFT

Record to Enter – and 14 16 ‘ Height – Equip. Shed Office SQFT = 2,250 – 26% Full Basement Partial FNA Garage SQFT = 6,300 – 74% Total SQFT = 8,550 Class S - Stud Metal Siding EFF Age – 30 Porch Addition = 200 Sqft Equip Bldg SQFT 2 = 3,200 Class D - Stud Wood Siding EFF Age - 20 10 ‘ Height – Office 20 ‘ Height – Service Repair Garage

Calculation Errors

Calculation Errors Commercial CAMA system produces Calculation Errors for missing data that is required for completion of cost calculation. The key is to be organized in your layout of the record, especially if multiple sections, occupancies , and components are involved.

Calculation Error Sample -1 The Most Common One

Calculation Error Sample -2

Land Cost System Error – Missing NBHD Code

Income Approach

Income Approach Income producing properties should be valued using the income approach to substantiate value. Use the commercial cost approach to approximate the income approach value. Income approach does not have to be elaborate. Must be able to “talk the talk.” Example of industrial plant in Ludlow.

Income Approach Apartment Sales Town Owner SaleDate SalePrice Units $/Unit SQFT $/SQFT Middlebury Stone City 10/25/2004 410000 8 51250 5112 80 Scout Property 3/1/2005 260000 7 37143 4788 54 Vergennes LewisburgLLC 4-Oct 212500 4 53125 3554 60 Perron 5-Jan 227000 56750 3230 70 Industrial Town SaleDate SalePrice Acres SQFT Type $/Sqft Bennington Listing $995,000 7.84 28875 $34.45 Swanton $2,250,000 13.69 85000 $26.47 Essex Jct $2,950,000 18.32 77280 $38.17 Morrisonville 10/6/04 $425,000 4.10 32064 $13.00 Middlebury 3/6/30 $725,275 4.65 11580 Comm/Indust $62.63 11/21/03 $555,000 4.28 8320 Industrial/Light $66.00 Small Industrial (Less than 25,000) $60/Sqft Large Industrial $ /Sqft Rents $3.50 / Sqft

Income Approach Retail Sales Town SaleDate SalePrice Acres SQFT Type $/SQFT Middlebury 10/4/04 $217,500 0.16 1896 Retail $114.00 12/17/04 $415,000 0.04 4400 $94.00 Bristol 12/1/04 $180,000 1.17 5547 $32.00 Barre City 6/17/02 $275,000 0.48 6000 $45.00 5/15/01 $340,000 0.49 7422 $45.80 Rutland City 11/3/03 $675,000 Unknown 10000 $67.50 6/9/99 $604,000 0.15 10728 Retail/Apt $56.00 4/14/05 $618,300 4.15 10182 Lumber/Retail $60.72 $281,700 0.70 4938 Lumber/Warehse $57.00 Vergennes 11/3/04 $207,000 0.03 2316 2 Apt/Retail $90.00 $215,000 0.07 6471 2 Apt/2Retail Typical Value Approximately $50/Square Foot Typical Value DownTown Approximately $100/Square Foot Core Rents $15 First Floor $12 Upper Floor $6 Below Grade Outlying Rents $10 25 Percent Expenses 10 Percent Overall Cap Rate

Income Approach PROPERTY IDENTIFICATION PARCEL ID JO NAME Leader Evaporator PROP. DESC. Wharehouse Sale Price 1,600,000 10/2005 NEIGHBORHOOD 2 LAND - COST $ ,900 RESIDUAL LAND: $ BLDG - COST $ ,588,259 VALUE-COST $ ,882,200 OR /SF VALUE-INCOME $ ,898,780 FINAL VALUE VALUE/UNIT: INCOME/EXPENSE INFORMATION NET LEASABLE 78,172 SF UNIT OF UNITS OR ECONOMIC USE COMPARISON SIZE/SF RENT/UNIT RENT ROOMS $/RENT/DAY - EFFICIENCY UNITS $/RENT/MO. 1-BEDROOM UNITS 2-BEDROOM UNITS 3-BEDROOM UNITS Manufacturing $/SF/YR. $ $ ,145 TOTAL SF TOTAL INCOME TOTAL UNITS VAC. & CR. LOSS 5.0% EXPENSE % 25.0% CAP. RATE 11.00% TAX LOAD INCOME APPROACH VALUE INDICATIONS INCOME APPROACH SUMMARY - ECONOMIC RENT GROSS INCOME 100.0% $ ,657 EFF. GROSS INCOME $ ,488 95.0% EXPENSES (TOTAL) $ ,622 NET INCOME $ ,866 75.0% OAR CAP 11.0% RESIDUAL. LAND: VALUE INDICATION INDICATED VALUE:

Income Approach

Conclusions and Summary

NEMRC/MicroSolve Commercial System has made improvements. Still multiple versions in existence across the State. It is simple to use, but can value complex properties. There is no cookbook to appraising property. Must understand the market and market conditions to value commercial property. Cost is a means to MARKET VALUE.

MicroSolve Commercial

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