Volume
27,
Number 3, 2005 of the Journal of Real Estate Research
Parcel Size, Location
and Commercial Land Values
Professor Karl L. Guntermann
College of business
Arizona State University
P. O. Box 874706
Tempe, AZ 85287
E-Mail: Karl.Guntermann@asu.edu |
Professor Gareth Thomas
Department of Economics
College of Business
Arizona State University
P. O. Box
E Mail: Gareth.Thomas@asu.edu |
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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