When appraising the land to be acquired pursuant to the potential acquisition of property for right-of-way projects it is important to utilize the correct unit of value. If the correct unit of value is not utilized it can result in the property being undervalued, which could lead to a too low initial offer to the property owner. A too low initial offer can result in higher fees and costs for the condemning authority seeking to acquire property for a particular project.

I have seen too often where the a per square foot value of land was used in an appraisal when that was not the correct way to value the land for a particular property. For instance, a property that has a highest and best use for residential development should not be valued in that way, as the most likely purchaser of that type of property is a developer who is going to value the property based on how many units they can develop. Another example, is the valuation of a property improved with a retail gasoline facility, where the value is mostly in the land and not the improvements. That type of property should not be the value based on improvements including the land, but the value of the land including the improvements.

It is important that the correct unit of value is utilized in order to ensure that an appraisal contains the correct valuation of the property. To fail to do this can have serious ramifications for the acquisition of parcels for a right-of-way project. Incorrectly appraising property for a right-of-way project can result in budgetary issues for the acquisition program, which can result in shortfalls for acquiring all of the parcels needed for a particular project.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.

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What do you consider to be the most important issue today in regard to the valuation of residential real estate as relates to acquisition of property for right of way projects?
In answering this question it would be easy to say that rising interest rates, and the pressure that interest rates place on demand, which impacts value, is the most important issue today impacting the valuation of residential real estate, but I think the issue that is going to have the most long term impact on residential real estate values in Florida is the cost of insurance. Anything that impacts the cost of residential real estate will have an impact on value, and long term I think the greatest rise in cost impacting residential real estate is insurance.

The cost of residential property insurance continues to rise as a result of various issues including some of the storms that have hit Florida over the last several years, the aging of residential condominium stock, and the increase in flooding in various coastal areas within the state. In some places residential insurance is potentially so expensive that it is not in line with the value of the housing stock in those areas. It is important to note that if you have a mortgage on your property insurance is going to be required.

As the cost of insurance becomes more and more expensive the number of potential buyers decreases. When demand decreases there is typically a downward pressure on price. If we are not able to remedy the ever increasing cost of residential property insurance it will most likely have an impact on the affordability of residential real estate, which can also have an impact on local tax revenue, some of which is needed for right of way projects.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.

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As part of many road widening projects there is a change in grade, as the crown of the road is raised as part of necessary drainage modifications pursuant to the proposed widening and expansion of travel lanes.  This elevation of the road will often have a corresponding impact on the grade differential of the travel lanes and properties adjoining those travel lanes.  As a result of these changes in grade differential between the travel lanes and adjoining properties, access to those properties can be impacted pursuant to the creation of a non-functional grade differential to the adjoining properties.    

As has been discussed in previous Blogs, not all properties are the same, which holds true when you are considering acceptable grade differentials to a specific property.  A property that primarily experiences  passenger vehicle traffic typically requires different driveway grade differentials then properties that primarily experience delivery vehicle traffic, which can differ depending on the type of delivery vehicle that primarily utilizes a particular property.  When you are planning the design and potential parcels needed for a project it is important to analyze these differences.

In most cases grade differentials are resolved by harmonizing the new lanes into the adjoining properties until a functional grade differential is achieved.  Although this sounds like a low impact  process, that is not always the case.  Depending on the grade differential that needs to be harmonized it may be necessary to go several yards into the property that is being harmonized, which could cause impacts both temporary (landscaping and use of property areas) and permanent (internal circulation and loss of parking) in nature.  Once again failure to consider these potential impacts early on in the project planning and design process can result in project delays and increased acquisition costs.  Just as you shouldn’t overlook other impacts that may result from a particular project you shouldn’t fail to consider the potential impacts of necessary harmonization to specific properties as part of your projects.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.

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In my last Blog I discussed the importance of fully considering access, as part of analyzing properties to be acquired for proposed Right of Way projects. There are other variables that also should be considered when determining how acquisitions may impact certain properties. Failure to consider these variables may result in much higher acquisition costs and potential business damages.

Too often when analyzing the cost of Right of Way to be acquired for a certain project what we see is not actually the true value of what is being acquired. In this time of changing demand for retail property “Post Covid”, and recertification requirements for certain residential properties “Post Surfside Building Collapse”  the improvements that exist on a particular piece of property may not represent the true value of a property. In determining what the market dictates the Highest and Best Use to be for a particular piece of property all of the market valuation evidence (sales of improved property and vacant land) must be considered.

A great example of how the value of improved properties has changed is in regard to retail centers. As the manner in which consumers purchased property changed during Covid some “Brick and Mortar” retail centers no longer met the demand of the market. When those properties become “functionally obsolete” the value of those properties as improved may no longer exceed the value of property as vacant. This same change in market demand has also occurred in regard to high rise residential buildings both due to the implementation of new building recertification requirements following the collapse of the residential tower in Surfside, Florida, and because the market for various types of residential improvements has changed.  

Failure to consider these changes may result in an incorrect valuation of property that you are seeking to acquire for a particular project.  It is important to analyze property not just as currently improved, but also as vacant land. This complete approach to valuing real property is the only true way of understanding the value of property. Remember to not let the improvements fool you.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.  

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The two variables that I would like to focus on in this writing are drainage and landscaping.  Both items must be paid attention to when seeking to acquire land from improved properties.  Drainage needs to be maintained, so that neither the property or the adjoining roadway experience improper drainage, and depending on the jurisdiction where the property is located there may be strict rules regarding the required landscaping.

It is important to understand how drainage works on the property from which you are seeking to acquire land.  Where are the drainage improvements located, what type of drainage system is being used, where are the critical drainage points (high and low areas of the property).  If you don’t understand all of these things in regard to the drainage system of a particular property you will potentially fail to understand the true cost in regard to improvements and potential cures of acquiring the necessary land from various properties needed for your project.

This is also true when it comes to landscaping and greenspace requirements.  Many jurisdictions have strict rules regarding landscaping and greenspace that may require the full or almost complete replacement of landscaping that is impacted by a taking.  If you don’t understand these requirements when first analyzing the acquisition requirements of a particular project you may end up with much higher costs than originally anticipated.  Forgetting these variables is a mistake that could impact the viability of your project.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.  

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Acquiring Right of Way From Commercial Properties – Access, Access, Access

We have all heard the term Location, Location, Location in the context of valuing real property. In the same realm of importance as location is access. A major part of what gives commercial property value, whether it be a retail gasoline site, a shopping center, or a distribution warehouse property is access. It is essential as right of way professionals that we fully analyze the properties within the parameters of our proposed projects with access in mind.

What type of vehicles need to access the properties? How do those vehicles access those properties? Where do the vehicles need to go once they access a property? In the context of these questions is the project being designed in such a way that functional access will be maintained to the properties within the corridor of the project. These important design considerations should include not only driveways but internal circulation.

If we fail to consider these important aspects of functional access in the design of our right of way projects it can result in substantial increases in right of way costs (real estate and business damages), which can result in a proposed project not being feasible. Designing and Building better roads is essential, but it should not be done in a way that impacts the viability of properties along those roads. Remember Access, Access, Access as an essential part of your project analysis.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.

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Don’t Sit on Your Butt – The Answers are in the Field!

It is important to fully understand the property and the parcels that you will be acquiring for a particular project. You can’t do that sitting in your office. You need to go to the field. Walk the project with the whole team and understand the properties from which you are acquiring parcels. This may seem archaic in the days of Google Earth and other such search engines. However, the old ways are still the best ways when you are doing certain things. Whereas Google Earth may be a starting point, it does not necessarily provide all of the answers. Google Earth will show you what a property looks like from various angles, but it does not tell you the whole story.

The whole story is how you view a particular property. How does it operate? When are the parking spaces used? What are the circulation patterns? What does development look like on the adjoining properties? These are important questions that need to be answered in regards to how the property functions and what will be the impacts from the right of way taking.

This may seem like a time consuming way to learn about the properties that you are going to acquire, but in the long run this extra time could result in a significant savings for your client. If you miss something and lose the taking, or have to redraft your legal descriptions and parcel sketches, that will potentially cost a lot more money than spending a day in the field getting to truly understand the properties from which you are acquiring parcels.

To read the original blog post in the International Right of Way Association Sunshine Chapter No. 26 Florida, click here.

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