Commercial big-box retail: a guide to market-based valuation

| September 12, 2017

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This IAAO position paper provides guidance for the valuation of big-box retail properties. Over the last several years, issues involving these properties and theories about how to value them, such as the dark store theory, have resulted in great debate within both the appraisal and legal communities. Even though this paper concentrates on arriving at the market value of the fee simple interest of these properties, it provides guidance regardless of the specific law of a jurisdiction. This analysis focuses on big-box retail stores from 50,000 to 200,000-plus square feet; however, the market trend for big-box retail is shifting to both smaller and larger stores. For example, one major retailer has six different prototype stores varying from 15,000 to 260,000 square feet, depending on the characteristics of the trade area. The concepts discussed in this paper apply to single-tenant retail stores of any size and also to other property types.

Spotlight

Landmark Group

Landmark Group is one of the largest, most successful retail and hospitality conglomerate in the Middle East, Africa and India. Founded in 1973, the Group encourages entrepreneurship which in turn has pioneered leading homegrown brands that are market leaders in their categories and are known to deliver exceptional value to customers. In the last four years, the Group has doubled its store count, and now has over 55,000 employees and operates over 2,300 outlets across 22 countries.

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Spotlight

Landmark Group

Landmark Group is one of the largest, most successful retail and hospitality conglomerate in the Middle East, Africa and India. Founded in 1973, the Group encourages entrepreneurship which in turn has pioneered leading homegrown brands that are market leaders in their categories and are known to deliver exceptional value to customers. In the last four years, the Group has doubled its store count, and now has over 55,000 employees and operates over 2,300 outlets across 22 countries.

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