A 1,920-square-foot house is near Center City and is on a major traffic artery.

Question

A 1,920-square-foot house is near Center City and is on a major traffic artery. Nearby single-family properties have been rezoned for office use and the trend is in that direction. The site measures 100 x 200 feet. Its value is $4.50 per square foot for office use and $30,000 for residential use. The property as improved has a value of $65 per square foot of living area, including land and building.

What is the value of the site as though vacant and available for development to its highest and best use?

Explanation / Answer

Site's measurement = 100*200 = 20,000 square foot.

Value for office use = value per square foot*total square foot

= 4.5*20000 = $90,000

Value for residential use = $30,000

Both the above values are for the site as vacant and available for development.

The value of $65 is value after improvement including the building. This value is not for the vacant site.

So, value for the vacant site for development to its highest use = $90,000 (for office use, as earlier calculated)

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