The borrower will contribute 10 percent (or possibly up to 20 percent when financing a special-purpose property
for a new business).
The court said that neither the location of the subject property, with its admittedly superior views of the Hudson River and New York City skyline, nor the unusual combination of uses qualified the property as a special-purpose property
for which the cost approach is appropriate.
M2 EQUITYBITES-November 24, 2015-Kennedy Funding Financial closes USD3m loan for Ohio special-purpose property
BANKING AND CREDIT NEWS-November 24, 2015-Kennedy Funding Financial closes USD3m loan for Ohio special-purpose property
If the current use of a special-purpose property
is physically, functionally or economically obsolete and no alternative uses are feasible, the highest and best use of the land might be realized by demolishing the structure and selling the remains for their scrap or salvage value, if possible."
Under SOP 5010 5(H), a special-purpose property
is defined as a limited-market property with a unique physical design, special construction materials or a layout that restricts its utility to the specific use for which it was built, largely conforming to the definition found in the Dictionary of Real Estate Appraisal, 5th Edition.
This is a valuable resource for locating an individual who has worked on a particular type of special-purpose property
, especially if nothing comes from a literature search.
Ron Throupe, PhD, MAI, Kay Zhang, and Xue Mao are the winners of the 2015 Armstrong/Kahn Award for their article, "What's So Special about Special-Purpose Property
?" published in the Summer 2015 issue of The Appraisal Journal.
In its discussion, the Minnesota Supreme Court stated that usually at least two methods of appraisal should be employed, but when valuing special-purpose property
, like Guardian's ethanol production plant, using solely the cost approach was acceptable.
The concept of a special-purpose property
is often confused with the concept of a special use or limited-market property.
Where a business valuation is required by the SBA, its requirements give real property appraisers the authority to include the required business valuation within a real estate appraisal when the SBA loan is being used to purchase a special-purpose property
. SBA policy states that the appraiser must be experienced in the particular industry.