Deed - Civic Center - File 155, 1938 pt1

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However, this is often the case for special pur- pose properties for there is rarely -a market in the private.sector for such a property as the subject unless it is acquired for conversion to another use. In most cases where public build- ings are sold they are "dated" architecturally and are usually functionally obsolete for con- tinued use as a public building. These usually include such structures as fire houses, old city halls, post offices or old courthouses, usually relatively small structures. Such an example would be the former city hall in the City of Emeryville. Although this building has not been sold it has been leased for private offices. The appraiser has found no other municipal court buildings as new as the subject property that have sold on the open market. Therefore the appraiser's valuation approach has been limited primarily to the cost and in- come approaches. The income approach to value is, in the appraiser's opinion, a more meaningful method in this case for it assumes a knowledgable buyer would acquire the property for anticipated profit generated through building rental income. In order to realize this income potential from the property, certain alterations must be made to the improve- ments anc1%ot--the site. Further assumptions must also be made in this case for providing off- street parking or the equivalent in a discounted value (functional obsolescence). In analyzing property value from the income approach, the normal procedure is followed assuming the pro- perty is improved under the premise of highest and best use. This involves estimating an economic rent based not only upon competition in the city but also upon the quality and func- tional adequacy of the property a6ten temodeting. From this gross income estimate are deducted estimated expenditures, and the resulting net income is capitalized by an appropriate capital- ization rate. The resulting property value, land and improvements, must then be discounted