No tenant equals no rent, and specialized improvements may or may not garner the same rent premium in the marketplace as generic improvements, which could result in superadequacy
and/or negative leverage.
Put another way, the cost premium of NZE may reflect some level of either superadequacy
or functional obsolescence.
Adjustments for physical characteristics are typically made for plant design, fuel type, unit size, shutdown units, capacity factor, heat rate, plant condition, age, superadequacy
, functional utility, and remaining license life.
Perfect match, and a great way to do away with the whole concept of functional obsolescence or superadequacy
It is easy to get too fancy and outsmart oneself with complicated ways to measure obsolescence and superadequacy
This is the foundation of the concept of functional obsolescence and superadequacy
in security-enhanced construction is a concern for many building owners as well.
A final word of caution: Appraisers should be aware of the potential of superadequacy
in green construction and that buyers in some markets will not pay the full cost of the item already in the building, prompting an adjustment.
13] The Appraisal of Real Estate also includes a more precise definition of functional obsolescence as a "loss in value that may be caused by a deficiency or a superadequacy
As thicker floors are considered to be a superadequacy
for the typical warehouse user, the extra floor thickness is not considered in adjustments used in the sales comparison or income approaches.
Many special-purpose, single-tenant retail properties are built with functional superadequacy
, one type of functional obsolescence, has been addressed at this stage of the process, since the design, materials, and equipment selected are the most cost-effective.