Estimating Market Value and Establishing Market Rent at Small Airports (2020) / Chapter Skim
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Pages 42-54
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From page 42... ...
42 5.1 Introduction The process and methodology for identifying appropriate airport and airport property characteristics play a vital role in an objective estimation of market value or establishment of market rent. As with any process or methodology, the details and the research approach are key aspects to a successful result.
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Airport and Property Characteristics 43 more difficult, as most locations throughout the United States possess an inadequate number of similar airports in the same market. As outlined in the NPIAS (2017–2021)
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44 Estimating Market Value and Establishing Market Rent at Small Airports only been recently defined. As stated in Compliance Guidance Letter 2018-3, Appraisal Standards for the Sale and Disposal of Federally Obligated Airport Property: major factors that should be used to identify comparable properties for estimating FMV [fair market value]
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From page 45... ...
Airport and Property Characteristics 45 characteristics may be deemed important, without an ability to attain or measure them, the employment of a consistent, repeatable process is prevented. Utilizing the results of the survey and considering availability and measurability, the following identifies those airport characteristics deemed most important in estimating market value and establishing market rent: • Airport classification and type of market – Airport classification -- indicates type of airport based on the NPIAS and General Aviation Airport Asset Study.
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46 Estimating Market Value and Establishing Market Rent at Small Airports mean that the established ranges may need to be expanded or certain airport characteristics may need to be eliminated. Effectively, the surrounding airports will dictate the adjustment to the ranges and characteristics in the effort to find those airports within a certain proximity (e.g., 25 miles, 50 miles, 100 miles)
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From page 47... ...
Airport and Property Characteristics 47 • Access – Airside -- quality of access to the airport infrastructure – Landside -- quality of access from the landside – Location -- prominence of location on the airport and proximity to aeronautical services • Additional considerations – Supply and demand -- strength of market and demand for use (e.g., waiting list and available supply characteristics) – Use limitations -- restrictions to the land (use, zoning, rules, development characteristics, noise and building restrictions, etc.)
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48 Estimating Market Value and Establishing Market Rent at Small Airports 5.4 Airport Property Improvement Characteristics Analyzing airport property improvement characteristics utilizes a similar process to the airport property land characteristics. However, the subject of the analysis shifts from land to improvements, resulting in new characteristics being deemed most appropriate.
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Airport and Property Characteristics 49 adjustments for non-quantifiable variables (i.e., condition, access, amenities) can be based on a scale of poor, fair, average, good, and excellent.
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50 Estimating Market Value and Establishing Market Rent at Small Airports Community Hangar Excellent Condition Community Hangar Poor Condition Storage Excellent Condition Storage Poor Condition Office Excellent Condition Office Poor Condition Figure 5-6. Variability in airport property improvements.
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Airport and Property Characteristics 51 – Employment and workforce -- indicate economic health of the market – Consumer Price Index -- indicates economic trends of the market (if available) – Type of market -- indicates type of purpose for consumers in the market (e.g., national, regional, local, rural, resort/destination, metropolitan area)
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52 Estimating Market Value and Establishing Market Rent at Small Airports Airport/Facility Directory AirportIQ 5010 AirNav Airport Directory Figure 5-7. Available resources on airport characteristics.
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From page 53... ...
Airport and Property Characteristics 53 AirportIQ 5010 The advanced search feature of AirportIQ 5010 provides an underlying basis to analyze airports within identified categories. Searches can be conducted based on a combination of or any one of the following: • Ownership (e.g., identify publicly owned comparable airports only)
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From page 54... ...
54 Estimating Market Value and Establishing Market Rent at Small Airports 5.7 Methodology for Identifying Similar Airport Properties After identifying the comparable and competitive airports that will serve as a basis for estimating market value or establishing market rent, it is imperative to identify the airport property improvement characteristics and land characteristics that will be analyzed. But to understand and identify these characteristics pertinent to the current situation, the airport sponsor, airport management, or airport property managers can initiate the research process to identify similar airport properties at the comparable and competitive airports.
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