Appraisers' Free Forum

I have an assignment of 2 executive homes with a 3800' runway and 2 hangers, 2 fuel tanks, etc. The valuation of the hangers is pretty straight-forward but the land/runway part of the property has me wondering how to treat it. It is private and it is paved and in fair condition. On the other hand, if you taxi too far south, you fall into the drink of a small lake. I need to put a number on the land value for the portion that is runway - about 20 acres. Any suggestions. This is a small town with few commercial land sales but typically ag land is selling for $3500/acre and immediately developable ground might bring $5000-6000 an acre. There are some abandoned poultry barns on the subject but they contribute nothing significant.

I am not expecting to find good sales data, so I will probably rely upon the cost app. so I want to value the land. Commerial rate? Premium over it? Over-improvement??

Sorry, Terrel, I've got no idea how to do this. The only suggestion I can think of is that you might find sales of similar properties in the Monkey Island area... not sure any have sold, but I know that some exist down there.

Only other idea I have is to add the cost approach from the concrete to the land value... but, where you would get the depreciation I haven't a clue.

Sounds like a HBU problem.

Put aside the runway for now. If you value the runway with the CA, you'll get use value anyway. If you've seen no runways offered for sale, then there probably isn't a local market for one, and thus no MV.

Is there demand for residential tracts with a lake view? Looks like there are several possible tracts along the SE shore of the lake. This looks like the HBU may be for S/D development, depending on local market characteristics.

You might try http://www.trade-a-plane.com for listings of airpark properties; there may be a few private airfields offered in their classified section.

My thought process is that the runway is commercial land. The hangars would be obsolete if there were no runway, so their value is contingent upon the runway. I did find a report of a hangar and a nearby sale and the report is prepared by some appraisers from the area that I have never heard of. But it looks really good and is well supported. The large homes are nice but dated and development along the lake is restricted by the city that owns the lake except this guy owned the city pretty much and did whatever he wanted. A buyer would unlikely be allowed to develop if there was a demand and there isn't one. There is an apartment complex nearby that is about to go under and a subdivision full of rent to owners who are falling out like flies.

Nifty challenge. I agree with Jim that you default to the H&BU to answer some pretty basic questions. The financial analysis that is incorporated into the feasibility section should tell you what the demand is for this sort of thing "as is." I wouldn't be surprised to find that the demand is so low for residential runways that some other use the highest financial one and the runway may actually detract form the value. In a much more mundane example, we find here that swimming pools are considered a functional problem here that lowers value.

You may have to go regional, as Jim suggests, to find any runway demand at all. You are doing the thing, but what commercial application does a private runway have? Direct flights to Bogotá?

Your market reseach will tell you if it's an overimprovement. If there are no other similar properties, it apparently exceeds market demand.

As far as valuing the underlying land, consider what the HBU or actual use of the land would be sans the pavement. Would it be commercial development land, ag land, or excess residential land? My guess is it is nothing more than excess residential land.

I once appraised a property that had an airplane hangar and another one with a helipad/copter storage building. The one with a hangar was adjacent to a small airstrip. They were both sales, neither had significant contribution from the aviation influence.

My grandpa's farm used to have a grass runway and a hangar. Both are used for ag purposes today. A residential property in my market had a runway (part of it was actually an easement). The buyers of that property removed all remnants of the runway and it's mowed like the rest of the lawn.

Your market may be different. Around here, it seems to be a major overimprovement.

There you go Ter. Work a consensus out of all of that.

Here is a link that I came across in another forum

https://www.hangartrader.com/search.php