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Re: Skyscrapers and LVT

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  • Joe Casey
    Site Value, the basis for LVT is the market value of the the intangibles associated with a specific site. These intangibles (whatever they are) can be
    Message 1 of 1 , Sep 4, 2012
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      Site Value, the basis for LVT is the market value of the the intangibles associated with a specific site.  These intangibles  (whatever they are) can be divided, limited, destroyed, or enhanced by any means such as zoning, leasing, access to utilities, and surrounding community and to site specific factors such a suitability of ground for various uses, and subsurface rights.  A 100 year lease is itself a form of real estate the value of which is to be taxed by SVT. I have seen 100 year land leases written in the 1920s payable in gold bullion that made the land Fee Simple Deed nearly worthless but the leasehold of very high value for many years.  As the lease ages, the present discounted value of the leasehold changes with the market interest rate and the diminishing term of the lease. The fee simple deed is valued at total site value less the value of the leasehold.  Adjoining identical properties would be valued the same no matter what improvements are there on.
      Condominiums and cooperative apartments are subject to the terms of their creating contract.  The unit owners may own a share of the site, the owners association may own the site, or a developer may hold the site and lease it to the homeowners association.  The terms of liquidation should be addressed in the contract.   
      Joe Casey

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