Patric H. Hendershott () (Centre for Property Research, University of Aberdeen Business School, Edward Wright Building, ABERDEEN AB24 3QY) Bryan D. MacGregor () (Centre for Property Research, University of Aberdeen Business School, Edward Wright Building, ABERDEEN AB24 3QY)
Abstract
The concept of a peak in value or a "100% location" is so well established in real estate that there is no reference to the term in recent real estate principles and appraisal texts. However, the land value section in appraisals of a regional shopping center did not apply the concept when adjusting comparables for location, which resulted in a substantial underestimation of site value. A regression model that included a distance variable to control for location produced a value estimate that was more than double the values in the appraisals. The empirical results illustrate that the subject site represented a distinct peak in land value as well as reemphasizing the importance of making careful location adjustments in situations where there is a distinct peak in land value.
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Volume (Year): 27 (2005) Issue (Month): 4 () Pages: 445-475 Download reference. The following formats are available: HTML,
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Handle: RePEc:jre:issued:v:27:n:4:2005:p:445-475
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