Evaluating special purpose properties can be difficult and complex, an example of a special use property is airport properties. Airport properties require the same
appraisal process as any other property, but the difference is that airport land does not sell very often (Cole). Predominantly airport valuation services are used to figure out the market rent; which consist of master plan updates, new airport development, negotiation for new leases and renegotiation of existing leases (Cole). Most airport sites have a highest and best use for aviation, but it is still something to factor when evaluating the land.
appraisal process as any other property, but the difference is that airport land does not sell very often (Cole). Predominantly airport valuation services are used to figure out the market rent; which consist of master plan updates, new airport development, negotiation for new leases and renegotiation of existing leases (Cole). Most airport sites have a highest and best use for aviation, but it is still something to factor when evaluating the land. Normal market conditions are considered when determining the value of an aviation site as well as the airport needs to be considered in its highest and best use. Airport properties have three distinct areas on which their evaluations are based on; physical, locational, and economic climate (Cole). "Physical properties to aviation sites that should be considered when appraising is the runway length, number of runways, navigational aids, and controlled versus non-controlled airspace" (Cole). "Locational things to consider are proximity's to the business center, alternative transportation, other competing airports, and the demographics or population base" (Cole). "Finally the economic climate consists of the number and types of based aircraft's, number of operations and type of traffic, and the different passenger enplanements" (Cole). There are many elements to consider when appraising special use properties and these are no different.
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ts difficult to put a set value on airports, because their value changes so frequently between each other. But aviation land are still compared with other comparable airports to determine the right value of the site. Like earlier stated by Stephen Cole of Southwest Appraisal who specializes in aviation appraisals, he said that determining the value of the airport properties is its market rent. Airport Director Eric Menger said monthly rentals range from $417 to $1,200 depending on size in the Florida area (Jones).
ts difficult to put a set value on airports, because their value changes so frequently between each other. But aviation land are still compared with other comparable airports to determine the right value of the site. Like earlier stated by Stephen Cole of Southwest Appraisal who specializes in aviation appraisals, he said that determining the value of the airport properties is its market rent. Airport Director Eric Menger said monthly rentals range from $417 to $1,200 depending on size in the Florida area (Jones). Airport & Aviation Appraisals, Inc. explain that determining if the the airport is either for "wholesale" value or "retail" value. "An example of a wholesale user is the fixed base operation (FBO). The best example of a retail user is the corporate flight department" (Airport & Aviation, Inc.). Retail users also do not have to mark-up goods and services to generate a profit margin (Airport & Aviation, Inc.). FBO's are the primary provider of services to general aviation aircraft's and airports. "The most profitable FBO's consistently have real estate-related expenses at or below 5% of annual gross sales" (Airport & Aviation Appraisals, Inc.). Maintenance activities generally produce the biggest profits for airports (Airport & Aviation Appraisals, Inc.).
To conclude, airports and aviation sites are part of the special use properties because they're very unique type properties. Aviation land is not always easy to appraise because they don't sell often and require lots of research to appraise. To appraise airports you have to use comparables and adjust accordingly. Also, you need to use market rent to compare different airports. Highest and best use has to be considered as well because if there is a better use of the land then the airport should be changed. In addition, determining whether the land is best used for "wholesale" or "retail" value is equally significant (Airport & Aviation Appraisals, Inc.). There three elements to look at when appraising aviation sites; physical, locational, and economic climate (Cole).Airport & Aviation Appraisals, Inc. "One Airport Value Will Not Fit All Airport Tenants." http://www.airportappraisals.com/includes/articles/Article-Value.pdf
Airport & Aviation Appraisals, Inc. "Renting The Farm: How FBO's (Or Lose) Money With Airport Real Estate." http://www.airportappraisals.com/includes/articles/Article-FBORental.pdf
Cole, Steven. "Market Rent Analysis for Airport Owned Properties." http://www.swaa.biz/airport.htm
Jones, Elliott. "Indian River property appraiser drops bid to tax Vero Airport." (2010).
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