Valuation of Impaired Property

July 2007

Citation:

ELR 10562

Issue

Author

Ronald Throupe, John A. Kilpatrick, Bill Mundy, and Will Spiess

Editors' Summary: Determining the value of a parcel of real estate that has been contaminated is a challenge addressed by various disciplines. In this Article, Ronald Throupe, John A. Kilpatrick, Bill Mundy, and Will Spiess focus on the appraisal model of valuation and address the three primary approaches to property appraisal: market, cost, and income capitalization. They provide background to the valuation of contaminated property, covering theory and methodology used by appraisers. They then evaluate methods such as case studies, surveys, regression, and depreciation analysis, and conclude with some cautionary tales and recommendations.

Ronald Throupe is a Senior Analyst and Director of Operations at Greenfield Advisors and an adjunct faculty member at the University of Illinois. John A. Kilpatrick is the Managing Member of Greenfield Advisors, a Member of the Faculty of Valuation of the Royal Institution of Chartered Surveyors (United Kingdom), and a nationally certified instructor of appraisal standards at the Uniformed Standards of Professional Appraisal Practice. Bill Mundy is the founder of Greenfield Advisors, where he still works as Senior Analyst, and a Fellow of the Weimer School of Advanced Studies in Real Estate and Land Economics. Will Spiess is a Senior Analyst at Greenfield Advisors. [Editors' Note: This Article appears in the book When Bad Things Happen to Good Property, by Robert A. Simons, Ph.D., published in 2005 by ELI. The book can be ordered by either calling ELI at 800-433-5120 or logging on to the ELI website at http://www.eli.org.]

Valuation of Impaired Property

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Valuation of Impaired Property