Building appraisal information for Bulldog Studios/Old high school building.

On Friday, I received an email from the Bulldog Studios Tenants Association that included notes from the Beacon City School District meeting of last week detailing the appraisal of the old high school building, and the process by which that amount had been reached:

Dear Friends and Fellow
Tenants,
Hank Dutch, Peter Iannarelli, Susan
Magnus, and
Alison Moritsugu took notes at the recent Board of Education
workshop regarding
the appraisal of the old high school. Dr. Jean Parr
has the appraisal
document available for review in her office if you are
interested in checking
the accuracy of our notes or learning more about the
appraisal. To the
best of our recollection, these are the
figures...
APPRAISER: Valuation Consultants,
Inc., Newburgh,
NY
CONSIDERATIONS:
-Scale: The building is large (122,000 sq. ft.) in
relationship to 2.5 acre lot size.
-Location: The
building is in a residential neighborhood.
-Mechanical issues: Old heating system.
-Condition: Portions of building are semi-below grade and
less
desirable.
-Layout: Formerly a school, a large
portion of the
building cannot be leased due to layout. Possible to lease
approximately 64,000
sq. ft. or about 53-55% of the
building.
-Vacancy: 30% of the building is currently
leased.
-Expenses: Higher expense ratio when
compared to other
buildings of similar size. Estimated $500,000 in
annual expenses (this
includes $80,000 in estimated property taxes).
DETERMINING MARKET
VALUE:
1. SALES
COMPARISON APPROACH: Compare to other
comparable buildings sold in the
area to determine market value. The
buildings used for comparison were on
the market from 18-24 months. 3 were
vacant, 1 was 30%
leased:
-Broadway Elementary School, Newburgh.
Located
on a major intersection with superior parking.
-Bank of NY Headquarters. Large open interior spaces
similar to 211 Fishkill and 30% leased.
-Other
schools in Chester and Rhinebeck. Both
schools on larger parcels.
Based on this approach, 211 Fishkill is valued at 3
million.
2. INCOME APPROACH: Use current
rental income or
future potential rental income to determine market
value.
A) CURRENT RENTAL INCOME Current rents
are within
range of market rates. At present, 30% of the building is
leased. Based on
this approach and using current rent roll, 211 Fishkill is
valued at 1.5
million
B) POTENTIAL RENTAL
INCOME (STABILIZED RENT ROLL)
Allow 3-4 years to fully rent building,
keeping rents level during this time to
make leasing attractive and draw new
tenants. Assumes lower floors, which are
semi-below grade and less
desirable, would rent for $11.5 annually and upper
floors $14.25 annually.
Increase rents once building is fully occupied.

Based on this approach and a stabilized rent roll, 211
Fishkill
is valued at 2.3 or 2.4 million."