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Complete a sales comparison approach using the following information and data:

  • In your adjustment grid on the following page, round all adjustments to the nearest percentage.
  • Include a + or – to indicate the direction of each adjustment.
  • Make the market conditions adjustment first and independent of all other adjustments.
  • At the end, add together the location/physical adjustments because they are cumulative (don’t forget to consider the direction of adjustments).
  • Not all items will require adjustment.
  • Remember, comparables are adjusted to the subject, so a superior characteristic would be adjusted downward, and an inferior characteristic would be adjusted upward.

Subject property:

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312,000 SF warehouse

Sales A-D are all warehouses.

Market conditions adjustment

  • Market conditions adjustments are applied before all the other adjustments, after which you should calculate a semi-adjusted $/SF before proceeding with the location/physical adjustments.
  • Market conditions were stable from late 2019 until July 2020, when market conditions improved 30% due to demand for warehouse space for e-commerce. These conditions still exist today, in October 2021. Sales that took place prior to July 2020 sold during inferior market conditions.

Location adjustment

  • Whitestown is considered to be 10% superior to Indianapolis.
  • Greenwood is considered to be 15% inferior to Whitestown.
  • Plainfield is considered to be 10% inferior to Whitestown.

Size adjustment

  • Buildings in this market require a 1.5% adjustment per 10,000 SF of difference. Smaller buildings are considered superior, and larger buildings are considered inferior.

Age/condition adjustment

  • An adjustment for age is 2% per year of difference. Older buildings are considered inferior, and newer buildings are considered superior.

Remember the market conditions adjustment is performed prior to location/physical adjustments. Location/physical adjustments are added up and can net each other out.

Last, present the range of adjusted $/SF and the indicated range of values in whole dollars, rounded to the nearest $10,000 for the subject building.

Your answer: SHOW ALL ADJUSTMENTS AS PERCENTAGE WITH + or – TO INDICATE DIRECTION OF ADJUSTMENT.

Subject

Sale A

Sale B

Sale C

Sale D

Date of sale

Date of value: October 2021

April 2021

November 2019

June 2020

July 2021

Location

Indianapolis

Whitestown

Greenwood

Indianapolis

Plainfield

Size

312,000 SF

255,000 SF

359,000 SF

470,000 SF

212,000 SF

Effective Age

8 years

2 years

1 year

14 years

10 years

Sale Price

N/A

$26,775,000

$21,181,000

$18,800,000

$17,596,000

Sale Price/SF

N/A

$105

$59

$40

$83

Transactional Adjustments

Market conditions

N/A

Semi-Adjusted $/SF (Sale price/SF after market conditions adjustment)

N/A

Location/Physical Adjustments

Location

N/A

Size

N/A

Age

N/A

Net physical/location adjustments

N/A

Adjusted $/SF

N/A

Resulting (low to high) range of $/SF values for subject:

Resulting (low to high) range of whole dollar values for subject:
 
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