PROPERTY EVALUATION (RESTRICTED REPORT)
determined land values, ignore the demand side of the market, and the relationships that underlie any existing relevance are subject to change. Any rule of thumb clearly should be utilized only if it can be shown empirically to have validity. Indeed, we have considered the inherent weaknesses of rules of thumb multiples, and that in some cases the fixed percentage methodology may fail to account for the “fixed” accessibility to a property. In other words, if an access easement takes 1,000 square feet of land, the marginal benefit of an additional 1,000 square foot easement would not be constant. However, in this case, it is our belief that the highest and best use of the land (as an add- on component to the abutting parcels) adds value to the properties in a linear manner. Overall, the fixed percentage approach has been applied, and our analysis follows.
Analysis of Subject Easement
In an easement valuation seminar presented by the American Institute of Real Estate appraisers, it is emphasized that “Easement value is based upon the appraiser’s understanding of the market’s perceptions of legal and physical impact of easement…”. The course outlines several viewpoints that should be considered for valuation. The chart that follows identifies these considerations, and highlights our opinion as to the impact of each consideration on the base-line rule of thumb ratio of 25%.
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