Laserfiche WebLink
ADDENDA <br /> APPRAISAL DEFINITIONS <br /> Absolute net (bond) lease. A lease in which the tenant is responsible for payment of all expenses <br /> including but not limited to real estate taxes, insurance, maintenance, utilities, janitorial and structural <br /> repairs. The intent of this lease type is that the landlord absorbs no expenses relating to the operation or <br /> repair of the leased space. <br /> Aggregate of retail values (ARV). The sum of the appraised values of the individual units in a <br /> subdivision, as if all of the units were completed and available for retail sale, as of the date of the <br /> appraisal. The sum of the retail sales includes an allowance for lot premiums, if applicable, but excludes <br /> all allowances for carrying costs. <br /> Appraisal. (Noun) The act or process of developing an opinion of value. (Adjective) Of or pertaining to <br /> appraising and related functions such as appraisal practice or appraisal services. <br /> Client. The party or parties who engages an appraiser (by employment or contract) in a specific <br /> assignment. <br /> Discounted cash flow (DCF) analysis. The procedure in which a discount rate is applied to a set of <br /> projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and <br /> duration of the income streams as well as the quantity and timing of the reversion and discounts each to <br /> its present value at a specified yield rate. DCF analysis can be applied with any yield capitalization <br /> technique and may be performed on either a lease-by-lease or aggregate basis. <br /> Effective rent. The rental rate net of financial concessions such as periods of no rent during the lease <br /> term; may be calculated on a discounted basis, reflecting the time value of money, or on a simple, <br /> straight-line basis. <br /> Extraordinary assumption. An assumption, directly related to a specific assignment, which, if found to <br /> be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact <br /> otherwise uncertain information about physical, legal, or economic characteristics of the subject property; <br /> or about conditions external to the property such as market conditions or trends; or about the integrity of <br /> data used in an analysis. An extraordinary assumption may be used in an assignment only if: <br /> • It is required to properly develop credible opinions and conclusions; <br /> • The appraiser has a reasonable basis for the extraordinary assumption; <br /> • Use of the extraordinary assumption results in a credible analysis; and <br /> ■ The appraiser complies with the disclosure requirements set forth in USPAP for <br /> extraordinary assumptions. <br /> Fee simple estate. Absolute ownership unencumbered by any other interest or estate, subject only to <br /> the limitations imposed by the governmental powers of taxation, eminent domain, police power, and <br /> escheat. <br /> Floor area ratio (FAR). The relationship between the above-ground floor area of a building, as <br /> described by the building code, and the area of the plot on which it stands; in planning and zoning, often <br /> expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice <br /> the total land area. See also land-to-building ratio. <br /> Full service lease. A lease in which the landlord is responsible for payment of all expenses pertaining to <br /> real estate taxes, insurance, maintenance, all utilities and janitorial. <br /> Clobus, McLemore & Duke, Inc. <br />