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Parcel Size, Location and Commercial Land Values

Author

Listed:
  • Karl L. Guntermann

    (College of business, Arizona State University, P. O. Box 874706, Tempe, AZ 85287)

  • Gareth Thomas

    (Department of Economics, College of Business, Arizona State University, P. O. Box)

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.

Suggested Citation

  • Karl L. Guntermann & Gareth Thomas, 2005. "Parcel Size, Location and Commercial Land Values," Journal of Real Estate Research, American Real Estate Society, vol. 27(3), pages 343-354.
    • Handle: RePEc:jre:issued:v:27:n:3:2005:p:343-354
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    Citations

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    Cited by:

    1. Jonathan Wiley & Douglas Walker, 2011. "Casino Revenues and Retail Property Values: The Detroit Case," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 99-114, January.
    2. Nichols, Joseph B. & Oliner, Stephen D. & Mulhall, Michael R., 2013. "Swings in commercial and residential land prices in the United States," Journal of Urban Economics, Elsevier, vol. 73(1), pages 57-76.
    3. Maria Trojanek & Marcin Anholcer & Audrius Banaitis & Radoslaw Trojanek, 2018. "A Generalised Model of Ground Lease Pricing," Sustainability, MDPI, vol. 10(9), pages 1-21, September.
    4. Michael R. Mulhall & Joseph B. Nichols & Stephen D. Oliner, 2010. "Commercial and residential land prices across the United States," Finance and Economics Discussion Series 2010-16, Board of Governors of the Federal Reserve System (U.S.).

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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