Keywords

economic obsolescence, special-purpose properties

Abstract

This article proposes a new technique, based on utilization rates, for estimating economic obsolescence in the appraisal of industrial special-purpose properties. A utilization-based measure, which explicitly considers the operating leverage of the facility, allows for proper calculation of the obsolescence. Theoretically correct valuation principles underlie the proposed utilization methodology. The technique uses inputs that are reasonably available to an appraiser, thus providing a practical application of the proposed methodology.

Original Publication Citation

R.G. Crawford, B.A. Slade. "Appraising Industrial Special-Purpose Property", The Appraisal Journal Volume LXIX, No.2, Issue April 21, Pages 161-173, 4, 21.